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moneysense.ca, 15/06/06
What’s in your Shopping List?
Despite a vigorous rally today (TSX Composite Index was up 252 points or 2.3% and the S&P 500 went up 26 points or 2.1%), pretty much every equity market around the world is well off the recent highs. While the sharp slide is unnerving, a correction or a bear market provides many opportunities to find bargains. I don’t know if the markets are going to go up or down from here but many securities are cheaper now than they were just four to six weeks back. Here’s what is on my shopping list:
- Emerging Markets: The iShares MSCI Emerging Markets Index Fund (EEM) has fallen about 20% from its peak.
- Developed Markets: I already have some exposure to international stocks through the iShares MSCI EAFE Index Fund (EFA). It is off 11.5% from its highs, so this might be a good time to increase my exposure to this asset class.
- US Equities: I still think that large-cap, blue chip US growth equities are reasonably priced. The DJIA slipped 6% compared to an 11% correction in the TSX Composite.
- Selected Canadian Equities: Some Canadian blue chips are getting interesting. I would be interested in the Bank of Nova Scotia (TSX: BNS) below $42.
Warning: This or any other post on this blog is not a recommendation to buy or sell securities. It’s your money, so please do your own due diligence.
moneysense.ca, 15/06/06
I’m currently watching TD Bank very closely. If it breaks into the $55 range I will probably jump on it. Loblaws was also interesting earlier this week but I missed that one.
However, you might want to check out Bill Carrigan’s column in the Star this morning:
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1150408210721&call_pageid=970599109774&col=Columnist973792654645
He says that by the fall the market could be lower than where it is right now. A week or two ago he pretty much predicted the little stumble we have had over the last couple of weeks.
Of course this is only my opinion and anyone reading this should do their own homework and consult with their financial advisor before making any investment decision.
TD Bank is already one of my top holdings and it has fallen more than some of the other banks. I recently bought TransCanada Pipelines (TRP) when the yield was 4% on my buy price. The markets could very well go down from here, so getting the shopping list ready would help in picking up some bargains.
I recently bought BMO Bank of Montreal as their share price pulled back by 10% AND they increased their dividend by 27%. The resulting 4% dividend yield was too good to pass up! And this is from a value investor who almost never buys large cap stocks! I buy with at least a 5-yr outlook, though, so short term price pullbacks on stocks normally present me with buying opportunities. You just need to pick a price point that you are comfortable with buying and when it falls below that, then just pull the trigger and don’t worry about it if it falls a bit further than your target, as long as you have a fundamentally solid company.
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