Beginner investors who are looking to get started investing should try their best not to time the day-to-day or even week-to-week moves by markets. Indeed, a lot can happen over the course of a few days or even a week. That said, pursuing short-term results (think a time horizon of less than a year) can lead you down the wrong path.
Though trading in and out stocks on a frequent basis may be attractive, it’s very hard to consistently obtain stellar results over time. Instead, new investors should take the route of the long-term investor. That way, you’ll be able to make the most out of compounding.
New investors: Simple investing is a great way to get started!
Undoubtedly, trading and the allure of quick profits may draw people into the stock market. But it can be a tricky game if you’re anything less than a seasoned investor. Instead of complicating matters, I think investing newbies should keep it as simple as possible. Stick with businesses you understand, rather than trying to find a reason to purchase a hot stock that’s on everyone’s radar at a given time.
In 2022, many new investors were punished by going down the route of the momentum investor or trader. Now that the sell-off appears to be winding down, new investors should heed the valuable lessons to be learned from the stock market plunge of 2022.
In this piece, we’ll consider one reasonably priced Canadian stock that I think is a perfect candidate to start an investment portfolio. Whether you’re looking to buy your first stock for your TFSA (Tax-Free Savings Account) or for something to add to your FHSA (First Home Savings Account), let’s have a look at potential names that may be rich with value.
BCE stock: A simple dividend stud
When it comes to telecom giant BCE (TSX:BCE), I believe there’s a lot more value than meets the eye. The stock currently trades at around 22.8 times trailing P/E. It’s not exactly a “cheap” company when comparing the stock against historical averages. That said, I do think BCE stock may have quite a bit of value at $64 and change per share.
When it comes to value, we’re talking about more than just the price or price-to-earnings (P/E) multiple. Of course, P/E ratios are a pretty good gauge of how pricy or cheap a stock is.
The stock boasts a 6.04% dividend yield, making the dividend far more bountiful than your bank’s savings account! It’s a well-covered payout and one that could be subject to growth over time. Of course, a healthy dividend ought to command a premium valuation. I think an argument could be made that BCE deserves more of a premium given the economy could slow considerably.
Even when stocks feel pressure from recessions, well-covered dividends are still scheduled to be paid. Of course, a dividend could always be reduced, but given BCE’s track record and the resilience of its cash flows, I’d argue the dividend is beyond safe, even if the yield swells above 6%.
