If you’re worried about getting into the market right now, there is one phrase that should come up again and again. It’s not that you want to try timing the market, but you want time in the market. The more time in the market you have, the more time you have to see your shares grow.
So, how do you get started? Let’s look at some key strategies for investors to use on the TSX today.
Buying the best for a bargain
Right now is a great time to invest because some of the best companies on the TSX today trade at a significant discount to their normal performance levels. Companies that will fall during these cyclical periods are due to rise right back up. How do we know? They’ve done it before.
That’s why you want to look for companies that have been around for decades and decades. Even better, find companies that are household names in their sector. These are blue-chip companies that tend to offer not just share growth but dividends.
From there, you can find companies that have a long history of dividend increases, share increases, and strong financial performance. Yet you’ll want to then consider the stocks trading lower than their all-time highs.
Look to the aristocracy
It can be overwhelming to look at a huge list (and I do mean huge) of companies on the TSX today and try to decipher which company is going to be the one to recover quickly. This is why a great place to start is to narrow your focus to Canadian Dividend Aristocrats.
These are blue-chip companies, in many cases, and those that have increased their dividend for the last five years at least. Not all will be blue-chip stocks, however, which is why you’re going to want to narrow down those that have a long history of returns to look back on as well.
Once there, you should have a far narrower list. One that you can look at for signs of a discount. Don’t have as much time? Consider this stock on the TSX today.
Royal Bank stock
If you really don’t have the time and just want to get in on the market, it doesn’t really get better than Royal Bank of Canada (TSX:RY). Royal Bank stock remains the largest of the Big Six banks by market capitalization, and that’s about to get far larger.
Royal Bank stock managed to become the winner of acquiring HSBC, the seventh-largest bank in Canada. This will help the company expand its offerings even further across Canada, specifically with high-earning Canadians and newcomers to Canada.
Yet it remains a strong deal, with shares down 5% from 52-week highs. Those shares are then about to return to the highest share price we’ve seen in the last year, marking potentially the end of this bear market. And from there, history has told us Royal Bank stock isn’t going to turn back for the most part.
So, grab this blue-chip dividend stock while you can, with a discount coupled with a 4.1% dividend yield. And hold on long enough to see just what this stock can do.