The market has been swinging wildly with the professionals utilizing the media to scare the smaller retail investor to unload while the market craters. Someone will be making a lot of money having purchased great companies at value prices. Keep your cool and watch as the opportunities unfold.
Financials: Many Canadian financials have hit or are very close to new 52 week lows. These corporations are much better capitalized than those in the US and are beginning to look very attractive with solid dividend payouts. Top of the list to watch include: Bank of Montreal (BMO), Scotia Bank (BNS), National (NA), Royal (RY) & TD. There will be an opportunity very soon (if not now) to pick these up at discount rates. Insurance companies are worth watching but offer a little less safety.
Resources: Energy, Agriculture & Mining stocks have all been hit hard as the media advises us of a world slowdown that will impact demand. Yes, demand could be impacted, but to what degree as the world’s population continues to grow, particularly the middle classes in the BRIC countries ? Keep a close watch on these great companies: Agrium (AGU), Canadian Natural Resources (CNQ), Potash (POT), Suncor (SU), Teck Resources (TCK.B). Canadian National (CNR) is a perfect compliment to this group.
Safety Plays: Telecoms have faired very well throughout the recent turbulence. BCE & Telus (T) offer rich and reasonably safe dividend yields.
Value Investing Theory: When the market is swooning, great companies’ stock prices fall in tandem with the worst of companies. However, don’t get too smart as the market might have further to drop. Good Luck.
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