The Successful Investor Hotline – Friday, March 7, 2008

Article Excerpt

The markets rattled many investors this week with steep one-day drops. At times like this, it’s good to remember that even when a further decline lies ahead, high volatility generally signals that it’s “a good time to buy”, rather than “a good time to sell”. It’s also encouraging to see that despite the steep one-day drops, most major market indexes are still at or above the lows they hit in January. BANK OF MONTREAL $43.10, Toronto symbol BMO, fell over 10% this week after it announced writedowns of asset-backed securities and higher loan loss provisions. In its first fiscal quarter ended January 31, 2008, earnings fell 26.7% to $255 million or $0.47 a share from $348 million or $0.67 a share a year earlier. The latest earnings figure included a $324 million after-tax writedown of securities, plus a $38 million rise in loan loss provisions. If you exclude unusual items, earnings fell 8.3%. The bank warned that it faces roughly $500…