With just under a month and a half left in the year, new Canadian investors might be wondering which stocks to stash on the watchlist for the new year. Undoubtedly, a new year being rung in also means another TFSA (Tax-Free Savings Account) contribution to start thinking about putting to work.
And while the broad markets seem choppier and less investable amid the barrage of negative headlines and bearish commentary from pundits, I think an environment like this is perfect to put new money into, especially since there’s a bit more fear after many months’ worth of enthusiasm for AI and the prospects of a big year-end market melt-up. While sentiment has taken a 180-degree reversal, I think investors should gather a list of value names that one might wish to pick up on continued weakness.
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The markets are sinking, but don’t be afraid to be a buyer
As always, it’s impossible to tell if the latest 4% or so fall in the S&P 500 will be limited to 4-5%, or if a full 10% correction will happen, or maybe even a drop of 20% or more (that’d put us into a bear market). If a bear market does happen, I think bargain hunters could be rewarded for their bravery on the way down.
Just don’t exhaust your cash reserves all in one go unless, of course, you see a bargain that’s too good to pass up on. Every once in a while, there’s a heavily discounted name that comes by your radar that you just have to scoop up, regardless of how much further the so-called experts on television envision the markets falling.
At the end of the day, markets are an unpredictable beast, and it’s better to ride out the waves than seek to avoid them. So, in this piece, we’ll check out a name to look forward to picking up as prices on top stocks begin to fall back down to earth for a change.
TD Bank
TD Bank (TSX: TD) stock was a major laggard last year, but this year, it’s one of the bigger leaders. The stock has remained quite resilient, but time will tell how long that will last. If shares begin to slip alongside the broad market, I’d look to take advantage of any pullbacks.
The big banks are flexing their muscles, and with TD shares little rattled, even amid market volatility, I’d look to keep adding to a position for the new year. As growth and tech implode, TD stock looks content to march higher, with shares currently at new highs just shy of $115 per share. Indeed, the momentum probably won’t be derailed by an upset tech sector.
Additionally, it’s TD Bank itself that I think stands to be a huge AI winner as it pursues various opportunities to boost margins and improve the banking experience. As AI becomes more involved with workflows, I see significant margin gains as TD Bank looks to become more tech-savvy. Between the fintechs and TD Bank, I’d have to go with the latter, given its ability to monetize its extensive client base and trim away at overhead costs across the board.
With shares still trading at less than 10 times trailing price to earnings, I’d not hesitate to be a net buyer as the company breaks the $200 billion market cap milestone, an exclusive club for Canadian firms! Finally, the 3.7% dividend yield is on solid ground and is likely to keep on growing year after year, as is to be expected from the dividend-growth juggernaut.
