It’s nice to think really long term, as market speculators flood into the broad stock markets in search of some sort of opportunity to make a quick buck. Indeed, trading is fun, and it can be profitable for those who get the timing right. However, for most new investors, it can be a stressful, money-losing proposition, especially if you’re not careful.
At the end of the day, I’d encourage market newcomers to go down the path of a long-term investor who’s thinking more in years and decades, rather than days and weeks. Of course, with the advent of low (and, in some cases, even no) commission trading and all the chit-chat over social media, it’s becoming harder to maintain a lengthy time horizon.
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Genuine long-term investing prevails
The draw of quick gains and stories of those who’ve made it rich getting big on the semi plays before they took off are sure to convince just about anyone to start chasing some of the high-momentum names, even as things get a bit more turbulent. The AI revolution might be the real deal, but that doesn’t mean the low-hanging fruit hasn’t already been grabbed. Personally, I’d much rather wait for a bit of a pullback before getting into the momentum trades. And I think there’s a good chance the pullback could be vicious, given that momentum tends to work in both directions.
Personally, I think dividend stocks could be the opportunity as the lights go out on parts of the tech sector. In this piece, we’ll look at two Canadian dividend payers that I think are worth holding, if not forever, perhaps for the next 10-50 years. Sure, five decades is a long time to hold a stock, but when you consider the generational wealth factor and the hefty passive income (that’s growing by the way) that will be flowing in every quarter, perhaps there’s no reason to sell at all, especially when the terrain gets a bit rockier.
Enbridge
Enbridge (TSX:ENB) stock is one of the names that income investors should feel comfortable hanging onto for really long periods of time. Even through bearish conditions, the pipeline giant has pulled through for dividend investors. Nowadays, the dividend yield sits at 5%, but with one of the more predictable cash flow streams out there, I think there’s no shame in paying a 26.8 times trailing price-to-earnings (P/E) — that’s a hefty premium compared to historical averages — for quality.
With shares of ENB finishing higher by 1.7% on a wobbly Wednesday for the S&P, I also view Enbridge as the ultimate defensive play as speculators panic-sell some of the riskier parts of the market. As the boom and bust go on, I’d much rather get paid to wait with one of the premier energy transport plays on the continent. With steady growth and one of the best dividend-growth histories on the TSX, the name’s worth stashing away, preferably for many decades.
If anything, I hope ENB shares retreat so that I can get more yield for a lower price. Maybe a 6% yield for under $70? That’d be great if you’re a long-term thinker!
Now, Enbridge isn’t perfect. It has gone through lengthy periods of trailing the TSX. Another rut is bound to happen at some point. But, for the most part, Enbridge keeps its dividend promise. And it has what it takes to keep growing that payout steadily over time. Good times or not, it doesn’t matter. This company is run by some very shareholder-friendly managers.
