The TSX today continues to trade higher than 52-week highs, yet shares have not beaten out records quite yet. However, shares of the TSX today are getting closer to that $22,213 share price achieved back in April 2022.
Just in the last few months alone, however, there has been some incredible growth. After bottoming out with the rest of the market on Oct. 27, 2023, shares are now up 12.6%. So, does that mean we’re in a bull market? And if so, what should investors do about it?
Are we in a bull market?
To be clear, there isn’t actually an official designation as to what makes a market a “bull market” — no governing body … nothing. And what’s more, there are multiple ways of determining whether we’ve entered a bull market in the first place.
Some say that if the TSX today were to rise over 20% above its most recent low, that means we’re in a bull market. Others suggest that the bull market is only achieved by hitting and surpassing a previously reached high.
But what about in the case of the TSX today? It fails on both accounts. A 12.6% rise since October means we’re out of luck on the bull market front, and we’re still short of reaching that all-time high. But the thing is, the S&P 500 is in a bull market. Shares have reached 52-week highs and, furthermore, have surpassed records. And that could mean we see one in Canada in the near future.
What everyday investors should know
The question is, does this even matter for the everyday investor looking to invest in their Tax-Free Savings Account (TFSA)? Of course, if the stock market is climbing, that’s definitely good news for those seeing their shares rise back from the ashes. Yet, should a bull market mean changing your overall investment strategy?
In that respect, definitely not. You’ve gone to your financial advisor and come up with a plan, and the key is that you want to stick to that plan. Over time, the market goes up, and investors can bank on that. However, trying to time the market based on bull or bear markets is a strategy that could set you up for failure on the TSX today.
In fact, if the TSX today climbs higher and higher during this high interest rate environment, it may cause another drop in the market. This could come from news that interest rates are holding longer or inflation remains higher. Institutions could trigger a selloff that investors will then be a part of as well.
Consider this instead
If inflation and interest rates continue to be sticky, consider what you’ve been doing in the past and move forward. Yet, if you’ve been waiting on the sidelines, that’s not the right call to be making right now, either.
What investors should do is look for value from blue-chip companies and exchange-traded funds (ETF) during risky periods. A valuable option these days might be a company such as TFI International (TSX: TFII) on the TSX today. The company is looking to spin out into two companies: its trucking business and its logistics business. This could create serious growth in the long term, though it offers value today.
Shares trade up 28% in the last year, though they dropped to $137 at their 52-week low. TFII stock is now working to get back to 52-week highs, and that could certainly happen during a bull market or, at the very least, when inflation and interest rates improve. Meanwhile, you can bring in a dividend of 2.15% as of writing — far higher than its five-year average of 1.5%!
So, don’t bank on a bull market. Instead, do the work. I promise it will certainly pay off for investors on the TSX today.
