Looking at the TSX today, investors wouldn’t be blamed for wondering if a new bull market is on the way. After all, shares of the TSX today only grow higher, with some minor dips. But rather than push investors away, they are encouraged by thoughts that, perhaps, we’re due for overall growth!
Yet while a bull market is great, certainly, it’s also important to note another arguably better question.
What’s valuable?
A bull market, just like a bear market, is temporary. It comes and goes. Recessions do the same, and pretty much any other type of market movement.
That’s why long-term investing in value stocks has long been the answer to investing woes, including by investment gurus like Warren Buffett. Instead of wondering whether a bull market is coming, a better question then might be, “What’s still valuable on the TSX today?”
When looking at the market in this light, your view should shift. Instead of seeking out the next growth stock, look back at blue-chip companies. There are so many out there that remain bargains. Especially for long-term investors dying to sink their teeth into growth and dividends over decades.
When it comes to this line of thinking then, there’s one area every investor should look into. And that’s the Canadian banking system.
Buy big
The Big Six Banks offer a huge deal for long-term investors. Canadians enjoy an oligopoly of banks in this country, with fewer competitors leading to more cash in their provisions. In fact, there hasn’t been a banking crisis since 1847! That’s far longer than our American neighbours can claim.
It also means there’s far more safety. So sure, Canadian banks are trading downwards right now, but honestly they’ll return to normalcy. Just as they have decade after decade, recession after recession. Which is why now is the time to grab a deal.
Most of the Canadian banks are trading at a discount. If not in share price, certainly in terms of value. So you can’t really go wrong. Still, if you’re looking for major value, there is certainly one stock to consider.
BMO stock
Of all the banks out there, Bank of Montreal (TSX:BMO) might be the best option then. It offers a great deal with shares down 11% in the last year. Also noteworthy, it has performed the best of the banks in the last three turbulent years, with shares up 56% in that time!
Plus, BMO stock is growing, expanding in the United States through its acquisition of Bank of the West. So it certainly could provide more growth in returns over the next decade and beyond. It’s also the oldest of the banks, with a history that spans over 200 years! So if you’re looking for safety in numbers, BMO stock certainly has that in spades.
Finally, BMO stock has a strong dividend yield to grab hold of these days at 4.92% as of writing. That’s while it continues to trade at an attractive price-to-earnings ratio of 11.7%. So certainly consider BMO stock if you’re looking for a bargain, because it’s one of the value stocks that could surge for long-term investors.
