The market crash has set off the sell-off run, making it difficult for companies to maintain stock prices. So, what will Warren Buffett try to do amid this selling off trend?

One of Buffett’s quotes hint at the strategy that one should opt for when a huge sell-off has been going on. He said, “Be fearful when the markets are greedy and greedy when the markets are fearful.” In other words, consider this sell-off as a buying opportunity and look for some great long-term investment avenues.

With the ongoing sell-off and bearish market trends, some stocks look like great buying opportunities. I am going to discuss one such stock here.

BCE

BCE (TSX:BCE)(NYSE:BCE), formally known as Bell Canada Enterprise, is the largest telecommunication company in the country. BCE is not just a regular telecommunication enterprise that solely takes care of mobile telephony operations. The company is also covering fixed-line operations, internet services, radio, TV broadcasting, and print media with its 17 subsidiaries.

This pervasive and robust market footing across the entire country, with around 22 million recurrent customers, suggests that its stock will come out stronger from the current market depression. As Warren says, any buyer who is not using borrowed money and making a long-term investment can make the most of a sell-off wave.

BCE is also a good long-term option to consider in current sell-off for its diversified nature of operations in terms of technology. Like the majority of telecommunication companies, BCE doesn’t just rely on wire-based services to generate revenue. As of today, nearly 37% of BCE’s yearly revenue is coming from wireless operations.

The tradition of maintaining a good balance sheet is another reason BCE could be the right choice for long-term holding. The telecom giant has the market capitalization of over $50 billion and is expected to maintain its revenue at $18.5 billion in the current fiscal year.

The stock performance also suggests that the stock can come out from the current turmoil stronger. BCE stock has grown by over 40% since 2015. The dividend yield currently stands at 5.07%. If you had invested $10,000 in BCE stock five years ago, you would have brought home over $14,000 without re-investing the dividend payouts.

In short, BCE stock is a great buying opportunity in the ongoing sell-off. By unearthing such sound investment options during the bearish phase of the market, you can build a robust investment portfolio in the long run.

Conclusion

A market crash followed by a sell-off is not always bad news. In fact, it sometimes creates excellent stock-buying opportunities. Warren Buffett has established this practice in his long-celebrated investing career. You can also follow in his footsteps to make the most of the current sell-off spree.

The post Warren Buffett Will Try to Do This 1 Thing if the Sell-Off Continues appeared first on The Motley Fool Canada.

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As a result, markets all over the world crashed. Even though an extremely bearish market is not something investors want, it offers them an opportunity for the time ahead.

Buying the dip can turn out to be a winning investment strategy given that you are choosing your stocks carefully.

Here, I am going to discuss two dividend stocks that you can consider buying now to sell at a higher price in the future.

Fortis Inc.

Fortis Inc. (TSX:FTS)(NYSE:FTS) is an electric utility company that has been working in almost the entire North American Region. Based in Canada, the utility company has been operating energy infrastructure in the U.S., Central America as well as the Caribbean Islands.

Fortis shares have been trading low since mid-January. After the recent market crash, you can expect the stock to dip further. However, there’s a strong chances that the Fortis will recover from the current mayhem and register growth again.

The reason why Fortis can withstand the ongoing financial depression is its unique business blueprint. As a utility company with a large operational radius, Fortis never goes out of business and maintains a steady cash inflow.

During the 2008 recession, when most of the stocks and holdings fell by more than half the prices, Fortis managed to stop the drop at 15%.

The five-year capital project plan by Fortis hints at excellent future growth for the company. Fortis is going to invest over $18 billion in these projects that can increase its rate base around $38 billion in the next four years.

Fortis stock has witnessed the growth of 73.35% in the last five years, and this can continue with the successful execution of future capital projects.

Suncor Energy 

Suncor Energy (TSX:SU)(NYSE:SU) is an integrated energy company that primarily deals in oil sands. The company doesn’t just drill crude oil, but also runs four refineries and a network of over 1,500 Petro-Canada filling stations.

This holistic portfolio that covers upstream, midstream, downstream legs of the oil and gas sector makes Suncor Energy unique among other oil companies and less vulnerable to crude price fluctuations.

Regular oil producers drill crude and sell it as the final commodity. Falling oil prices severely affect such companies who just manage the one end of the supply chain.

In contrast, integrated oil companies like Suncor have the avenues to offset the profit cutbacks caused by the crude price drop. For instance, refinery margins rise when oil prices drop, and this is where Suncor can capitalize on the situation.

Since the beginning of the year, the Suncor Energy stock fell by around %15. You can consider buying the dip on this stock to sell it later for higher prices.

Conclusion

Dividend stocks don’t just offer a regular stream of additional income. You can also benefit from the overall growth of such stocks.

Today, when the entire market is experiencing depression, you should buy the dip on dividend stocks that are better expected to recover from the current plunge and can register high growth again.

The post 2 Dividend Stocks to Buy Low Now and Sell High Later appeared first on The Motley Fool Canada.

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Right now, one can’t predict when and where this downward spiral is going to stop. Assuming that the ongoing bearish trend stretches for some time, it could be a good opportunity for investors to find refuge in some cheap stocks.

When you invest in an already cheap stock, you automatically stave off the chances of huge drops. Also, a cheap stock that stands on a reliable business operation offers a long-term opportunity for growth.

Here, I am going to suggest these two stocks that might help you make the most of the crash.

Chesswood Group Ltd 

Chesswood Group Ltd (TSX:CHW) provides financial services, including leasing, to small and medium-sized businesses in both the US and Canada. The stock trades cheaply because investors are still not sure how the company is going to deal with its loan book.

However, the numbers Chesswood Group is registering indicate that it could be an excellent cheap stock buy for the long term, especially if the market continues to plunge lower. For starters, the stock has experienced over 15% growth in the last five years. With its low stock price, Chesswood Group is paying its investors a yield of 9.55%.

The moderate price-to-earnings ratio of 7.9 times for the next 12 months also indicates that the stock may not undergo individual market correction this year. The earnings per share dropped last year, but the forecast suggests that it could increase by 26.4% from 2019’s figures.

The most significant indicator of Chesswood Group’s stable growth and operations is its return on equity figures. The company has been steadily earning 15% ROE. If Chesswood manages to maintain its ROE profile, it could deal with its loan book.

Plaza Retail REIT

Plaza Retail REIT (TSX:PLZ.UN) is another cheap stock to buy if the market continues to sink. When the market crashed last Monday, the stock price of Plaza Retail REIT dropped only 0.24 cents. And interestingly, it has already started recovering from that dip.

This REIT has its business footprint across the eastern territory of the country with over 250 properties. This vast number of properties has helped Plaza Retail to register both good stock growth and pay healthy returns to its investors.

It has witnessed a 10.50% stock growth in the last year. Meanwhile, its payout stands at a yield of 6.17%. The trailing and forward P/E ratios also suggest that the stock can be a good option for long-term investment in a bearish market. There is a three multiple difference between P/E ratios, pointing toward a stable market outlook of the stock.

Conclusion

The ongoing market crash can continue to haunt investors given the uncertainty surrounding the coronavirus outbreak, its cure, and also dwindling oil prices. In these uncertain and bearish times, it is better to remain cautious and invest in cheap stocks of companies with dependable business operations.

The post If the Stock Market Crash Continues, Buy These 2 Cheap Stocks appeared first on The Motley Fool Canada.

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This market crash might have affected your pension/savings/investments as well. Instead of going all despaired and dejected, you should start work on re-building your pension. Here, I am going to suggest three ways that can help you in recovering from this hard blow.

Re-evaluate holdings

When a market crashes, it affects every type of investment in one way or the other. However, some options are more vulnerable to these drops. In the current context, oil stocks have become too risky for now. If you have invested in such stocks, it might be time to re-evaluate your holdings and invest somewhere else.

Decrease spending

It is also essential to decrease your spending to offset the effects of a market crash. You have many avenues to cut back costs as a retiree. You may no longer need the two cars, so think about selling one of them. Also, re-evaluate your insurance policy if your house is paid off and your kids have grown up. And make the most of senior discounts to keep your recurrent expenditures in check.

Buy dividend stocks

Holding a dividend stock can be a good strategy to hedge your bets against a market crash, mainly if it is a Dividend Aristocrat. A good dividend payout somewhere helps you in minimizing the effect of dropped stock prices. Also, Dividend Aristocrats have a better chance of recovering from the market crash than other stocks.

Toronto-Dominion Bank (TSX:TD)(NYSE:TD), one of the Big Five and the second-largest lender in the country, is an excellent example of a Dividend Aristocrat. Although experts think that Toronto-Dominion might struggle with the other four big Canadian banks this year, there are some sound reasons why it could be a relatively better dividend option on the TSX.

Toronto-Dominion’s outlook has improved in the last couple of years due to its expanding operations in the United States. It earned nearly 40% of its net revenue south of the border last year. This year can also bring good fortune to the bank from the U.S., as the country is expected to witness higher GDP growth than Canada.

Canada’s housing market is also expected to recover from the slumber. If that happens, it will also grow Toronto-Dominion’s earnings. The bank is currently paying its investors with a yield of 4.60%. The market crash has hit the stock price of Toronto-Dominion bank. However, it is still trading over $60 and already recovered from $57.38 of the Monday crash. Experts think that TD stock has seen the worst of the crash and might not drop any further.

Conclusion

You can’t stop the market crash, but you can save your pension by making smart decisions. Re-evaluate your holdings and take out money from the risky investments. Also, cut down your expenses and try to invest in dividend stocks with sound market footing and history of payouts.

The post Retirees: 3 Ways to Rebuild Your Pension after a Market Crash appeared first on The Motley Fool Canada.

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But this current market turbulence shouldn’t suppress your appetite for investing. Now is the perfect opportunity to buy potent dividend stocks while they’re still cheap.

Superior Plus Corp (TSX:SPB) and Magellan Aerospace Corporation (TSX:MAL) are two high-yield dividend stocks that dipped below $10 per share, offering a great discount buy opportunity.

Magellan Aerospace Corporation

With political tensions high and growing globally, it’s not surprising that the defense and aerospace industry has enjoyed a boom over the past few years.

Magellan Aerospace Corporation is a manufacturer and supplier of aero-engines and aerostructures assemblies for both the military and consumer market.

Based on rising demand, a growing space market as well as sound management decisions on the part of the company, Magellan Aerospace has more than doubled its earnings over the past five years.

Over the same period, the company has also kept increasing its yearly dividend yield.

With multi-year agreements in place with such prominent clients as the Canadian government and the Boeing Company, the prospect for this company look secure.

At the time of writing, its shares are being traded at $8.4, compared to last month when the valuation per share was $14.06.

With a forward P/E of just 5.79, its share is potentially being traded at far below the intrinsic value. Its current dividend yield stands at a superb 5%.

By investing today, investors are also likely to snag in huge upsides as the stock rebounds near its intrinsic value when market conditions normalize.

Superior Plus Corp

Superior Plus Crop is another great stock with a juicy dividend you can buy right now for a huge discount. The company is a leading distributor of propane in Canada and the six largest down south in the United States. Taken in total, the company has a customer base of more than one million.

The company also sells industrial chemicals such as sodium chlorate and sodium chlorite, with the segment representing 30% of its EBITDA. As a provider of necessary utilities for many industrial applications, the company promises stability and reliability.

At an astonishing 7.74%, the company offers a dividend yield that is more than double the TSX’s average. However, with a payout ratio that has remained below 60%, its high yield figure remains manageable.

Its stock is currently being traded at $8.81 at writing compared to last month, when it was $11.4. With a forward P/E of 11.01, its shares are relatively cheap.

Bottom line

Both of these stocks represent stable and reliable sources of passive income, and both represent businesses that are largely shielded from volatility in market trends.

Investors are thus bound to upsides to their investments over the long term.

Stay hungry. Stay foolish.

The post 2 High-Yield Dividend Stocks Dropped Under $10 During Massive Market Selloff appeared first on The Motley Fool Canada.

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However, you might be fearful of investing your hard-earned money right now. Markets were already struggling with fears of the impact of the coronavirus epidemic when oil prices crashed as a result of new tensions between the energy superpowers: Saudi Arabia and Russia.

The result was a mass panic sell-off on the day’s opening, causing one of the worst declines since the 2008 Great Recession.

Yet, there is always an opportunity to be found within the chaos if you know where to look. As the adage ”buy low, sell high” goes, now is the perfect time for millennials to invest in the stock market and benefit from tremendous upside as a result when the markets recover.

An opportunity of a lifetime

Volatility in stock prices over the short term is not uncommon. However, the past two weeks have witnessed an upheaval that’s without comparison in more than a decade. Yet, this is why there is no better time to invest than right now. Here’s why.

Over short periods, markets can often behave irrationally, with prices being highly volatile. This can result from all sorts of influences independent of market performances, such as external events, misinformation, and uncertainty.

However, over the longer-term period, an asset is likely to revert to its intrinsic value. This means that whenever this is a mass panic-selloff of stocks and prices plummet, you have the opportunity to buy stocks at a huge discount. This allows you to grow your earnings considerably as the stock returns closer to its real value as the market recovers from the panic.

Invest in Telus while it’s still cheap

If you want to cash in on the opportunity but don’t have a huge appetite for risk, consider investing in Telus (TSX:T)(NYSE:TU). This quintessential blue-chip stock has a lot going for it that makes it such a worthy recommendation.

Here are just a few highlights.

Safety. Services such as the internet, phone, and cable have largely become a staple in Canadian households. Regardless of market conditions, people’s demand for these services is likely to remain consistent.

As one of the largest telecommunication providers in the country, Telus’s performance is mostly shielded from the effects of profound volatility.

A Dividend Aristocrat. For 16 consecutive years, the company has been hiking its annual dividend it pays to its investors. Currently, a yearly target of 7-10% dividend growth until 2022 has been set by the company in light of its rising cash flow from its growing customer base.

Plenty of room to grow for the company as newer technologies such as 5G enter the Canadian market and trends such as the Internet of Things continue to gain pace.

Summary

At the time of writing, its stock is being traded at $48.1, a fair discount compared to just a month ago, where its value was at $54.88. Invest right now and take advantage of its juicy dividend yield of 4.63%.

The post Millennials: Why This Market Crash Is the Opportunity of a Lifetime appeared first on The Motley Fool Canada.

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To maintain the balance in the OAS ecosystem, the government has established an OAS tax recovery structure, commonly known as OAS clawback.

When a retired individual’s net annual income exceeds a threshold set by the CRA, they have to pay a certain amount of their OAS benefit back to the government.

For 2020, the threshold for OAS clawback is set at $79,054, and you have to pay 15% of the excess income back to the government.

Let’s suppose you have a net income of $85,910 for the 2020 OAS income year. Subtract the OSA threshold from your income. You need to pay 15% on that sum.

• $85,910-$75,910= $10,000
• 15% of $10,000= $1,500
• OAS clawback= $1,500 per year or $125 per month

If you are worried that the OAS clawback may bite into your income, you need to make smart decisions about its distribution and investment. Here, I recommend two measures.

Make early RRSP withdrawal

If you’re sure that your post-retirement annual income will cross the OAS threshold, make your RRSP withdrawal early to drop below the threshold.

However, you’ll have to make a trade-off here. To avoid OAS clawback, you have to give up the RRSP’s tax-deferral benefit. If OAS clawback is worth more than the RRSP tax deferral, proceed with the early withdrawal.

Make the most of your TFSA

The OAS clawback doesn’t apply to the TFSA growth. If you have a spread of non-registered investments and you sense that the returns from those gigs may trigger the OAS threshold, consider moving them in your TFSA.

Speaking of using TFSA to its full potential, it is always a good idea to put a growth stock in this tax-free environment. Brookfield Asset Management Inc. (TSX:BAM.A)(NYSE:BAM) is an entity that deals with asset management in real estate, infrastructure, private equity, as well as the renewable power sector.

The company has a substantial business footprint with its five subsidiaries across four continents. The company has been registering a significant increase in annual revenues for the last 15 years. Its multifaceted asset management portfolio helps it to maintain a steady income stream and cash inflow.

The company’s TSX performance also reflects its excellent financial performance. The BMA stock has experienced over 100% growth in the last five years. Brookfield’s growing operations in renewable energy and utilities indicate that this successful run can continue.

Experts have estimated that the revenue and earnings per share of Brookfield Asset Management can increase by 8.6% and 19.4% YoY, respectively.

Conclusion 

OAS clawback will only bite you if you don’t streamline and sort out your annual income intelligently. Early RRSP withdrawals and TFSA investments are effective ways to avoid that tax recovery payment. In order to grow TFSA investments with no tax consequences, consider a good growth stock for it.

The post OAS Clawback: 2 Ways to Avoid Getting Your OAS Taken Away appeared first on The Motley Fool Canada.

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The CRA categorically advises investors to avoid two things: over-contribution and overtrading.

Do not over-contribute

Everyone who opens a TFSA knows that overcontribution is a big no-no. However, many people still end up over-contributing and paying 1% every month on the excess TFSA amount to the CRA. While it is important to remember the maximum annual limit for TFSA contribution ($6,000 this year), you also need to be mindful of these two things to avoid over-contribution and its fallout.

• If you are withdrawing from your TFSA, you can contribute the same amount back to the account, but only in the following calendar year. If you withdraw and re-contribute in the same year and the sum of initial contribution and re-contribution exceeds the annual limit, you have to pay the taxes on the excess amount.
• If you are moving your TFSA from one financial institute to the other, always do it in the form of bonds and stocks instead of cash. If you do it in cash, it will be considered a withdrawal from the TFSA, and you can’t re-contribute it until next year.

Do not overtrade 

If you’ve started day trading in your TFSA, there’s a strong possibility that the CRA will catch you. The CRA’s mantra is pretty simple: an account that frequently trades stocks might harness taxable business income.

There is no definite number of trades that you can make in your TFSA in a particular time window. You need to exercise caution and refrain from acting like a day trader.

Make the most of your TFSA 

You may not mind paying to the CRA if your TFA is growing at a good pace. Holding some stocks can help you with growing your TFSA. Case in Point: TC Energy Corp. (TSX:TRP)(NYSE:TRP).

TC Energy is a Calgary-based energy company that operates in the U.S., Canada, and Mexico. It primarily manages natural gas and oil pipelines and power generation facilities.

The company has been handling 25% of the continent’s natural gas demand with its pipeline network. Moreover, it is shipping 590,000 barrels of crude oil across the length and breadth of North America every day. Having a core business firmly connected to utilities allow TC Energy to experience steady growth and profits.

In the last five years, TC Energy Corp. has experienced over 60% stock growth, and currently, it is paying a 4.51% dividend yield to its investors. If you had invested $10,000 in TC Energy five years ago, you would have taken over $16,000 home. The sales of TC Energy are expected to grow by 4.6% this year.

The strong balance sheet and continuous growth indicate that the stock can maintain its good streak in the next few years as well.

Bottom line

If you don’t want your TFSA to become tax-liable, always refrain from overtrading and over-contributing. Putting yielding stocks in your TFSA can also help you with that to some extent.

By having a stock in your TFSA that grows and pays good dividend payouts, you may not feel the need for overtrading.

The post Canada Revenue Agency Says To Avoid These 2 Big TFSA No-Nos appeared first on The Motley Fool Canada.

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Tax deduction on childcare expenses 

If you or your spouse has a child that is under 16 and depends on you, you are eligible to file for up to $8,000 tax deductions in the name of childcare. For children under the age of seven, you can get a full tax deduction of $8,000. However, it gets lowers when the child is between seven and 16 years. You can claim for up to $5,000 for children in this age bracket.

These are the maximum amounts. Otherwise, you can claim up to two-thirds of your annual income in tax-deductible childcare expenses.

Tax deduction on moving expenses

If you are relocating from one city to the other for a post-retirement gig, you can also claim for the tax deduction on moving expenses. Tax-deductible moving expenses cover a lot of costs. From vehicle/accommodation expenses during the moving to the cost of utility disconnection and hookups and title transfer cost of the new home, you can file a claim for tax deductions on all these overheads.

Invest tax savings in a reliable stock 

As mentioned earlier, a good retirement plan entails both tax savings and smart investments. Therefore, it is a good idea to funnel the tax savings into an investment. But as a retiree, you need to exercise caution and should invest in a venture that doesn’t involve too much risk.

Canadian National Railway (TSX:CNR)(NYSE:CNI) can prove to be an ideal stock option for those who want to keep their initial investments safe. Like utility companies, CNR also has a natural monopoly over rail transportation. No matter how much air and road shipping grow, rail will always be the backbone of goods transportation.

The CNR ships $250 billion worth of goods every year, and this includes grains, crude oil, and everything in between. The CNR stock is paying the dividend yield of 2.01%, which is not bad given that the stock has been maintaining its price around $80 for the last few years.

The five-year stock growth of 36.01% also indicates that putting the CNR stock in your RRSP could help you raise your initial investment. If you had invested $10,000 in CNR 10 years ago, it would have been grown into over $45,000, even without dividend re-investments.

There is only a single multiple difference between the forward and trailing P/E ratios of the CNR stock, suggesting that it has been consistent with its performance among the investors.

Conclusion 

Retirees can also benefit from tax deductions for childcare and moving expenses in some instances. You should see if you are eligible for these tax deductions before filing your returns. Also, don’t forget to invest your tax savings in something that is low risk and promises dividends.

The post Retirees: 2 Tax Deductions You Might Have Missed This Year appeared first on The Motley Fool Canada.

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Banks in Canada are also feeling the heat of the upcoming difficult financial times. Nearly every bank stock on the TSX has dipped in the last two to three months. For a long-term keeper, this is the time to invest in bank stocks, since they generally do well.

As a TSX investor, you should watch out for these three bank stocks in the coming days. If they dip any lower, consider adding any of these stocks to your portfolio.

Royal Bank of Canada

Royal Bank of Canada is the largest Canadian bank in terms of market capitalization. It is a Dividend Aristocrat and extremely popular among retirees and other long-term investors. What makes RY a hit among investors is its relatively safe banking practices and hefty dividend payouts.

Among the six largest Canadian banks, RY depends the least on the international market. This conservative approach helps the bank to feel the lesser shock of any financial turmoil unfolding on a global scale. The stock price of the RY dipped $7 in the last week of February. In the coming days, it could go below the psychological mark of $100. If that happens, you should consider buying it for long-term holding.

Toronto-Dominion Bank 

Toronto-Dominion Bank is another Canadian banking giant that is sitting on a market cap of over $120 billion. The bank has always been a good performer on the TSX. Its stock has also dipped lately due to the underwhelming fourth-quarter earnings and the factors mentioned above. The EPS of Toronto-Dominion Bank for the fourth quarter of 2019 hasn’t met the experts’ expectations.

Since November 2019, the price of TD stock is getting constantly hammered. As the bank is under earnings pressure and facing deteriorating credit ratios and mounting loan loss provisions, its stock becomes a good prospect for long-term holding.

Bank of Montreal 

Bank of Montreal is another stock option to consider for your “buy-the-dip” scheme. It has been paying its investors for more than 100 years. Right now, its dividend ratio stands at 4.60%. This investment bank of international repute is also experiencing the bearish wave that is sweeping across the market.

In the last year, BMO’s stock price has fallen by 7.24%. The forecast suggests that the bank may have to put up with a 3.8 % drop in year-to-year revenue in 2020. If the stock price keeps falling to below $85, which hasn’t happened since 2016, you should consider it for long-term holding.

Conclusion 

Experienced investors always consider a dip across the banking sector favourable for their portfolios. It allows them to buy stocks cheap and make the most of the market resurgence that happens eventually. As an investor, you should watch out for those three banking stocks. If these stocks continue to plummet, consider adding them to your portfolio.

The post 3 Bank Stocks to Buy if They Get Hammered Any Lower appeared first on The Motley Fool Canada.

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