Investors waiting around for that 10-20% correction may be waiting around a very long time, as it’s not guaranteed to strike this September 2021.
Although it is one of the toughest months to invest through, one must remember that staying on the sidelines due to arbitrary factors such as seasonality is timing the market. And one of the biggest mistakes any beginner investor can make is timing the markets rather than getting started investing as soon as possible.
Don’t wait for a correction: Inflation will penalize you!
With inflation on the rise, the upside risks (or opportunity costs of not being in the markets) have been elevated. For many of us who’ve never had to grapple with above-average levels of inflation, we’re entering uncharted territory.
Undoubtedly, inflation has been rather tame for many decades now. But those older investors who lived through the 1970s, an inflationary environment and its impact on one’s purchasing power are not to be taken lightly! Undoubtedly, wealth can erode if it’s not given a job to do!
So, if you’ve got $1,000 stashed in savings and want a place for it to grow whilst fighting off the effects of higher (3-6%) CPI numbers and the horrifying prospect of runaway (as opposed to transitory) inflation, you may wish to consider looking to following TSX stock, which still looks attractive as we head deeper into one of the most uneasy months (or seasons) of the year.
Now, I’m not predicting that it will be smooth sailing as summer turns to fall, while trading volumes and volatility look to pick up traction. Rather, I find that many TSX stocks out there are capable of trending higher, regardless of what the market does going over the coming months.
Suncor Energy: A bargain stock for September 2021?
If you want to get more value per invested dollar, sometimes you’ve got to go against the grain with a name that nobody else would dare touch. Suncor Energy is a stock that’s fallen drastically out of favour. The integrated energy company may be in an industry that millennials aren’t huge fans of. But the operating cash flow stream still looks resilient, with room to run should oil prices continue moving higher, giving the firm a reason to turn more of its shelved projects online.
It’s been a tough downturn for oil. But as oil prices continue marching higher, potentially above US$80 per barrel, I find it hard to believe that shares of Suncor will continue trading at around book value. That’s an incredible value given the considerable momentum behind oil prices right now.
Sure, Suncor stock will be far more volatile than the broader markets with a ridiculously high 2.02 beta. But with a 3.6% yield to smoothen out the choppy ride and a dirt-cheap valuation, I’d argue that Suncor is less likely to follow in the footsteps of the TSX come the next correction.
Suncor shares are oversold, unloved, underrated, and, in my opinion, severely undervalued this September 2021.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.