With the broader markets beginning to pick up speed, bears are bound to look to hold off before a much-needed or even long-overdue correction. Indeed, market pullbacks happen, and they tend to be glorious buying opportunities, especially if there’s a clear path for the bull market.
Indeed, doubt the bull market’s strength if you will, but investors should know that waiting for market corrections could cost you money if stocks proceed to gain more ground, then the next 10% dip will wipe out. Indeed, if stocks take 50 forward steps and make only 10 back, you would have been better off not timing the markets and waiting around for a 10% drop.
New investors: Taking market timing out of the equation
Dollar-cost averaging (DCA) just makes sense for many investors who don’t want to have to stress about the timing factor. It’s a strategy that entails buying portions of stock incrementally over time. Whether stocks dip, surge, or go sideways, you’ll add to a position when the time is right.
Though the effectiveness of DCA is up for debate, I think it’s a good way for beginners to understand themselves as an investor better while also taking some emotion out of the game. Indeed, with a DCA approach, you may be happy when a stock you own sells off. That’s just an opportunity to buy more shares at lower prices.
The more you think like this, the more likely you’ll be to score great value on every investment as you become an aggressive net buyer while others sell. With shareholders running scared, I think there’s an opportunity to snag a compelling discount. Though deep value plays may not entail quick gains, I view each stock as a great play to hold onto for the next four years.
TD Bank
TD Bank (TSX:TD) has probably induced anxiety in some shareholders. With the money-laundering woes continuing to concern many investors, many wonder what the fate of TD’s multi-year growth profile (specifically in the U.S.) will be when all’s said and done. There’s still a lot of regulatory discussion to be had. And though the financial hit has likely already been considered here, it’s the non-financial impact that I believe is the greatest unknown for investors.
Will TD be restricted from acquiring and growing south of the border? And what does that mean for growth through the next decade?
It’s hard to tell right now. Until TD gains clarity itself, investors will probably be left in the dark on that front. My guess is that once we have more news on the non-financial impact, the stock will rally, perhaps quickly, as the layers of uncertainty are peeled away like an onion.
Could the long-term impact have the potential to be brutal?
Yes, but I think TD stock will rally anyway. Sometimes, bad news can be taken well if it means less uncertainty surrounding a stock.
Bottom line
TD stock is too cheap, and I believe the latest quarter has been overlooked. It was a solid second quarter. Though there were many one-time things within it, I think investors should settle down and focus on the deep value. Seldom is TD this cheap compared to rivals. That screams “buying opportunity” in my books.
