The worst thing you can do is panic-sell in the face of market volatility. Indeed, high rates and recession woes could drag markets into a correction. But as a long-term investor who seeks to build wealth for a rich retirement, it’s never a good idea to try to avoid corrections, as it’s virtually impossible to time a peak, perhaps with the exception of the 2020 COVID-19 market plunge.
In any case, the markets will continue to move in strange ways. Sometimes, good news is bad news, and vice-versa! With that, timing the market is mostly a waste of time. Instead, you can concentrate on buying pieces of businesses at discounts.
When the market waters are rough, the discounts tend to be a tad larger. And when stocks are in a correction or bear market, as the S&P 500 was in last year, steeper bargains can become more abundant. As an investor, you can safeguard your retirement by staying out of your own way! That means not overreacting to raw emotion — whether it be getting greedy in a year-long bull run or fearful after stocks have already fallen considerably from their highs.
In this piece, we’ll look at two steady Canadian dividend stocks that I think are great for all seasons. September tends to be a season of weakness. And September 2023 has been no exception. As we march into year’s end, a Santa Claus rally could be waiting around the corner.
As such, investors planning on exiting markets after the last few weeks of turbulence could be at risk of chasing (and buying stocks back at higher prices) going into the final quarter of the year.
Fortis
Fortis (TSX:FTS) stock has been a huge underperformer over the past year, now down around 2% over the timespan and off more than 14% from its 2022 all-time highs. Though Fortis stock has been feeling the pains of higher rates, I don’t think it’s wise to give up on the firm now that most of the rate-hike damage has already been in the books. At the end of the day, the business is still running as usual. With predictable cash flows and steady single-digit growth, Fortis stock remains a top bond proxy for long-term investors.
Yes, higher rates have made risk-free assets more attractive. But Fortis stock’s dividend has swollen by quite a bit, with shares now yielding an impressive 4.3% at writing. With an 18.7 times trailing price-to-earnings multiple and a mere 0.2 beta, which entails a low correction to the market averages, Fortis remains a great pick for those seeking to build wealth through the economy’s inevitable ups and downs.
Algonquin Power & Utilities
Algonquin Power & Utilities (TSX:AQN) used to be a green power play that rewarded investors with handsome dividends and capital gains. That all changed in 2022, when the stock suffered a historic implosion, with shares sinking to the single digits for the first time in many years.
Today, shares go for $9 and change. The dividend reduction has already weighed heavily, squeezing many income investors out of the name. Though dividend cuts can be unforgivable, I think there’s considerable value to be had in the name. The company seeks to sell its prized renewable assets, and I think it could fetch a good amount. Though Algonquin is no longer the play it used to be, I think it’s a mistake to overlook the shares, which now go for less than one times price to book.
