By Tom Bradley

I noted in my last Globe article that 2015 has been a wonderful learning experience for investors. Wonderful because despite all that's gone on, returns for diversified portfolios are still on the positive side of the ledger. It's usually the case that serious lessons only come when markets are in the dumper.

In a post last week, Salman outlined some lessons we're learned from the Valeant debacle. I've compiled a few more over the last few months.

Bonds are still a diversifier: In August, Canadian stocks were down 4%. U.S. stocks (measured by the S&P 500) were down 4%. Was anything up besides cash and T-bills? Well, no, but Government of Canada bonds were down only 1% for the month. Even with interest rates hovering around zero, government bonds are still a safe haven when investors are running for cover. As August demonstrated, however, they don't provide the cushion they used to.

Bouncing off the ceiling: As I noted in the Globe article, when we have market corrections like we had in August, young investors (i.e. defined as being younger than me) should be bouncing off the ceiling excited. They're at the stage in their lives when they're accumulating assets. Stocks are on sale. Their RRSP and TFSA contributions are buying more shares. It's my life's goal to get people to understand this.

It's hard being different: Going against the grain. Looking one way when everyone is looking the other way. Being a contrarian. It's easy for guys like me to talk about these things, but quite another to do it. Suncor, the Alberta-based energy company, is living this right now. While virtually all other oil companies are running for cover, Suncor is using its strong balance sheet to do some bargain hunting. It has already increased its interest in the Fort Hills oil sands project and is attempting to take over Canadian Oil Sands. But while doing it, they're getting few kudos. It's mostly "what are they doing?", or "it seems way too early". At the moment of truth, it's hard being a contrarian.

Lurking in the shadows: Through most of the spring and summer, the market commentary was focused on Greece, Greece and more Greece. But while the Mediterranean crisis was interesting on all kinds of levels, its likely impact on a diversified portfolio was limited. Meanwhile, there was little coverage at the time of what was happening in China, a country that can, and did, have a huge impact. As investors, we should never equate the amount of coverage with how important it is. The media is in the entertainment business, not the portfolio management business.   

For the last one, I can't resist going back to Valeant.

The 'Bigger-than-the-Banks' Hex: It's a very reliable rule of thumb. When a non-bank company moves to the top of the value chain on the S&P/TSX Composite Index, it's time to sell. As we've noted, Valeant was the most valuable company in Canada for a heartbeat before its precipitous fall. Potash Corp. was up there for a short time in 2008, as was Blackberry in 2007. And of course, Nortel blew past the banks on the way to dominating the index in 1999 and 2000. Enough said.