I’d Buy This 1 Dividend Stock Before the Market Dips Again

Sun Life Financial (TSX:SLF) stands out as a great dividend play to buy before markets move into a volatile period.

Key Points
  • Keeping lots of cash can help you buy bargains in a downturn, but with inflation still around 3%, waiting on the sidelines can quietly erode your buying power.
  • Instead of trying to time a correction, keep investing through dollar-cost averaging and look for reasonably priced names like Sun Life, which is showing improving momentum with strength in Asia and wealth/asset management.

It feels incredibly prudent to hold more than your fair share of cash in this red-hot stock market, one that I’m sure you’ve heard is overdue for a correction. Indeed, when a stock market crash actually happens, you need cash on the sidelines to play and pick up the huge bargains that come to be as most others run in panic.

Of course, these cash-crunching stock market meltdowns don’t happen all that often. And while you wait for them, you’re timing the market and are vulnerable to losing ground (purchasing power of the dollar) to inflation, which remains a problem as of August 2026.

investor looks at volatility chart

Source: Getty Images

Inflation hasn’t vanished, so waiting for after a dip might come with its own share of risks

While inflation isn’t out of control, CPI has settled on the higher end of the “acceptable” range at around 3%, at least as of July. In my view, that’s not all that acceptable, especially if you’re continuing to get sticker shock everywhere you go because of inflation’s effects on prices over time.

Of course, 3% food inflation might seem mild, but after all the inflation Canadians have been through in the past four years or so, I’d argue that it’s a pinch of salt that continues to be poured into the wounds. Either way, investing in stocks is the best way to stay ahead of inflation, even as it fluctuates wildly based on energy prices.

In a 3% (and falling) era of inflation, I still think that timing the market isn’t the best way to go, even if valuations are getting up there in the market and a correction is getting overdue. In my humble opinion, dollar-cost averaging is the way to go, as investors look to play both sides of the equation while taking the timing factor out of investing.

In a fairly or mildly frothily priced stock market, I think picking and choosing modestly valued names could be a wise choice.

Sun Life Financial

Sun Life Financial (TSX: SLF) trades at 18.9 times trailing price to earnings (P/E), which seems fair for a premier life insurer that’s starting to make the most of the industry upswing. Has Sun Life been the best-performing insurer in the past couple of years? Most definitely not. The shares only recently woke up, gaining more than 21% in the past six months.

In my view, Sun Life is making up for lost time, with the domestic market and Asia starting to impress. With a strong Q2 in the books, I think it might be time to start buying the name on the way up, especially since the stage seems to be set for broad strength right across the board.

As Asian growth stays upbeat while wealth management flexes its muscles, I like the trajectory from here. While the insurers are no longer dirt-cheap bargains, I like them on strength, especially for investors looking for a winner with more room to win.

In my humble opinion, Sun Life’s asset management business may very well be one of the most underrated in the financial scene. In due time, I think Sun Life could play in the big leagues as the firm looks to make a bigger splash in private credit.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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