The best time to start investing is as soon as humanly possible. Undoubtedly, way too many Canadians probably put off getting started investing because they don’t think they have enough capital to put to work.
Indeed, whether the sum is $400, $14,000 or something in between, there really isn’t one single figure that should cause one to at least think about getting started on their investment journeys.
Whether we’re talking about formulating a plan, starting a list of stocks for one’s radar, or educating oneself on all the aspects of evaluation and valuing individual companies, I’d argue that there is perhaps no better time than the present to put the building blocks in place.
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Just get started investing already!
With the cost of seemingly everything going up these days, it can feel like your excess cash in those high-interest savings accounts is just sitting around losing purchasing power. And with higher oil prices (WTI is near US$90, but could return past US$100 in no time if a worst-case scenario plays out), the threat of inflation is real. And, what’s more, there could be even more obscene price increases in the next couple of months and quarters.
Any way you look at it, investing in stocks is a great way to not only maintain purchasing power as the long-term effects of inflation weigh on your wealth, but it’s also a great way to get ahead.
In my humble opinion, there really is no perfect time to get started investing. And, in this piece, we’ll look at one reliable name that could make for a top starter stock, even with a limited sum. If you can get started with a brokerage that doesn’t have minimal deposits and offers lower trading commissions (maybe no commissions?), the following name might even make sense to buy with $400.
CIBC looks like a great bank pick-up
At this juncture, a name like CIBC (TSX: CM) looks like a great stock for a new investor. It has a fast-growing and still somewhat decent dividend yield, currently at 2.8% (it’s close to half of what it once was, though), as well as serious momentum behind it, with the name more than doubling to a 125% gain in two years.
Most importantly, though, CIBC shares look too cheap at 15 times trailing price-to-earnings (P/E), and while the bar has been set a bit higher this latest earnings season, I still think the combination of AI (operating efficiency driving opportunities) and strength in energy is a boon for corporate banking.
Of course, CIBC’s mortgage book looks far less risky today than a couple of years ago, when banks were in a rut. As the Canadian economy gets rolling along and the firm leverages its tech-savvy to gain even more share, I think it’s a source of strength.
While CIBC definitely isn’t anywhere close to being historically cheap, I do think that the $138 billion bank has what it takes to keep rising up the ranks.
Though time will tell how the Canadian bank rally ends, I do think that there might be less to fear about recent momentum, given the improvements going on behind the scenes. Whether you’re in it for the dividends or the appreciation, CIBC delivers on both fronts.
