With the broader stock market dragging its feet into November, investors may wish to have another look at their stock shopping lists. Indeed, not everyone keeps a watchlist of stocks or REITs (real estate investment trusts) they plan to buy at a given price. However, after a brutal past two months of trading activity, I’d argue that now is as good a time as any to start one.
Indeed, it’s hard to even think about buying this dip if you’re a new investor who bought their first stock in the back half of 2021, right before stocks rolled over into 2022. When the clock struck midnight on the first day of 2022, it certainly seemed like things turned on a dime.
While it would be nice if stocks started rallying on the back of the new bull market in January 2024, I think investors should be prepared to roll with whatever the market throws at them next.
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Market selloff game plan (November 2023 edition)
That means not only staying invested but being ready to act if a set of bear-case scenarios pan out. Undoubtedly, a recession could happen, and it could be a bad one that sees rates rise even further from here.
Further, stagflation could also take hold and weigh heavily on investment returns. Indeed, these are some of the more bearish scenarios. However, you should be ready to power through such an environment. That means having cash ready to buy on dips and solid dividend payers to compensate you for hanging in for a sideways or down market.
Additionally, you should be prepared to thrive in a “middle-ground” sort of scenario, which, I believe, is most likely. That means a softish landing for the economy and rates that could stay elevated for longer. In any case, the point is that you should be prepared to deal with whatever the market throws your way. The good news is that it’s the long-term that really counts.
So, don’t pay too much attention to the market strategists who are so confident about what the economy will end up facing in the new year. It’s a better idea to be prepared for anything!
As the market dip continues on, consider Kinaxis (TSX: KXS) and Saputo (TSX: SAP).
Kinaxis
Kinaxis is a supply-chain management software developer that may be a way to play the rise of artificial intelligence (AI). Indeed, supply chain management solutions are an area where AI could really shine. And Kinaxis is open to innovating on that front.
Recently, the firm brought ProvisionAI to its global partner network. Indeed, it’s one of many moves that suggest Kinaxis is serious about AI. With a mere $3.73 billion market cap, Kinaxis has plenty of room to run as it looks to keep improving its platform.
At writing, shares look intriguing after slipping more than 37% from its all-time highs. Of course, tech is under pressure right now. So, be ready to keep nibbling on the way down.
Saputo
Saputo is a dairy company that’s incredibly boring compared to the likes of Kinaxis. Kinaxis stock has also been delivering weak results in recent years, now off 44% from its 2017 all-time high. Indeed, it’s been a multi-year funk for the Montreal-based firm.
Though there are minimal catalysts at this juncture, I think shares look modestly priced at 18.36 times trailing price to earnings. The 2.7% dividend yield is also a nice touch for deep-value investors with patience.
