Lately, it seems like the Canadian and U.S. stock markets have been going down 5-10% a day with the occasional relief rally. Since their all-time highs in February, the Canadian and U.S. stock markets have fallen about 30%. These kinds of market price action can be unsettling, especially for new investors.
However, let me reassure you that this is the golden opportunity to invest in stocks.
Now’s the time to invest.
When I say now, I mean over the next few months or even longer.
What’s weighing on stock markets?
What’s spooking the markets and investors is not so much the coronavirus itself, but the impact the attempts to combat the virus are having on the economy.
Many businesses are shut down. People are staying indoors, executing social distancing, and limiting social contact as much as possible.
We don’t know how long this will last for — probably until the curve flattens and when there’s a working vaccine. But we’re still in the very early stages of making one.
The curve has flattened in China, which is generally believed to be where the virus started. However, the total number of confirmed coronavirus cases continue to increase globally. In other words, it’s an exponential graph, and the flattening curve is nowhere in sight.
This is already a major blow to the global economies — the extensiveness of which no one knows.
Businesses will go bankrupt, and people will get laid off. And it spirals down from there.
Stocks to buy now: The golden opportunity
Thankfully, if you have been regularly saving, you now have the golden opportunity to become part-owners of wonderful businesses at basement prices.
At least over the next few months, you have the opportunity of locking in juicy yields from quality dividend stocks. Here’s a list and their yields as of writing:
- Royal Bank of Canada: 5.2%
- Toronto-Dominion Bank: 5.9%
- Brookfield Infrastructure Partners: 6.7%
- Fortis: 4%
- Brookfield Renewable Partners: 6%
- Enbridge: 9.2%
- TC Energy: 6.3%
- Brookfield Property Partners: 16%
- BCE: 6.4%
- TELUS: 5.4%
Let me warn you, though. Despite how enticing these high-yield dividend stocks look currently, they’ll likely trade lower over the next few months. However, no one will know when the market will bottom. So, it’s best to average into your positions over time.
For example, if you plan to invest $10,000 in one stock, opt to put in $2,000 or $2,500 each time at preset yield points. This is to prevent putting too much money in at a time when the sky seems like it’s falling on the markets.
Here are other quality dividend stocks that are more growth focused.
- Alimentation Couche-Tard
- Brookfield Asset Management
- Canadian National Railway
- Canadian Pacific Railway
- Interrent REIT
- Open Text
- Shopify
- TMX Group
Similarly, consider averaging into growth stocks at specific price ranges over time. Perhaps buy some now. And buy some more when it falls another 20% lower, and another 20% lower, etc.
The Foolish bottom line
This is a market crash. Now is the best time to invest in stocks. Over the next few months, perhaps, even longer, average into your best stock ideas.
Consider reviewing your stock shopping list after the market closes, so you have a clearer head to set the price ranges to buy at. Remember to diversify your portfolio so that you don’t put all eggs in one basket.
You’ll look back 10 years later and see this bear market as the golden opportunity to invest. What are your most high-conviction best ideas?
