There could be a lot to gain for value investors who choose to run with the bulls. Indeed, it didn’t take long for fear and dread of inflation and central bank commentary to turn to outright bullishness. With rate cuts (likely) on the way and continued euphoria surrounding generative AI and everything it seems to touch, there’s no telling just how high this market can run as the bull returns to the driver’s seat, at least in the American markets.
Here in Canada, the TSX Index is up around 18% from its lows hit back in September 2022. Just a few more good days (or one really good day) and the TSX Index could find itself in bull market territory (defined by some as a 20% rally off lows).
The bull market may be coming to Canada sooner than you think!
Indeed, it seems to be a given that the bull is on the way. With more value plays and opportunity to be had in the Canadian stocks markets, in my opinion, Canadian investors may wish to put their next $10,000 to work on an undervalued TSX play that can continue roaring higher alongside the bull.
There are many places to put new money to work. As market valuations get a tad extended, some may be inclined to bet on gold, silver, or even cryptocurrencies. With various meme coins and cryptocurrency products picking up traction once again, it’s hard to avoid the euphoric feeling on Wall and Bay Street. And with AI stocks continuing to blast off further by the day, it seems like you’d be foolish (that’s a lower-case “f”) to sit on the sidelines, right?
As the bubbles in the cryptocurrency markets burst and AI stocks (likely not a bubble) correct, perhaps violently at some point over the medium term, value investors stand to be less affected as they stay within their circles of competence.
Even sticking with value may not be enough to steer clear of market volatility, however. It takes a truly wide margin of safety to minimize your chances of losing money when worse comes to worst and markets are forced to deal with the bear again.
Stocks are still intriguing, especially in the Canadian markets
In any case, I think value stocks are a great place to look if you’re looking to invest $10,000 for the next 10 years or more.
At the end of the day, stocks beat gold, bonds, and savings over the extremely long term. So, if it is the long term that you’re looking to invest for, perhaps a dirt-cheap stock like Fortis (TSX:FTS) is enough to meet your needs.
The stock’s in a horrid rut, down around 13% in the past two years, thanks to higher rates and industry headwinds. With a 4.45% dividend yield, a low 0.17 beta (implying shares are less likely to be influenced by the TSX), and an historically low 17.2 times trailing price-to-earnings multiple, FTS stock looks like a deep value play hiding in plain sight.
