© Reuters. Beginner Investors: 1 TSX Financial Stock to Buy and Hold Forever
It’s hard to be a long-term investor these days, with all the trading activity of the past few years. Who wouldn’t want to make a quick buck on a trade and get confetti for it in a trading app that someone like Charlie Munger – Warren Buffett’s right-hand man – might call a sort of “gaming parlor”? For beginners, the boundary between trading and investing should be known. Any investment horizon measured in weeks or months rather than years is not a long-term investment.
Indeed, volatility has not been traders’ friend this year. No one knows when the sell-off will end or if we’re in the early innings of a vicious bear market that could drag us to much lower levels on the S&P 500. Long-term investors can sleep more comfortably at night, as they don’t. need to achieve short-term goals.
They can also afford to take losses on paper because they know they technically don’t lose money until they hit the sell button. Stocks tend to rally over time (perhaps with the exception of the many tech bubbles that have burst this year), and novice investors may view any decline as an opportunity to supplement their favorite stocks in their long-term portfolios. term TFSA or RRSP.
The case for long-term thinking amid heightened volatility Even for long-term thinkers, it’s hard not to hit the sell button, especially when all you hear is negative in the big bucks. titles and on television. There’s no doubt you’ll hear the “r” word – recession – at least twice when you tune into your favorite professional TV show. You may even have a bearish expert urging caution. Indeed, it is difficult to find a bull on the street these days. But is that perhaps why now is a good time to start being a buyer of discontinued securities?
I would say that excessive bearish sentiment can be a sign that it’s time to put on your annoying hat. If you’re in it for the long haul (think the next five to 20 years), why not buy a stock that’s fallen 10-20% from its highs?
National Bank: A banking outsider to bet on! In this article, we’ll take a look at a TSX stock that newbie investors should feel good about buying, even in the face of a recession. Consider the shares of National bank of Canada (TSX: TSX:), which is currently trading at 9.9 times earnings over the past few months. As Canada’s sixth-largest bank, the financial company may not be getting the respect it deserves. The company has outperformed its peers during the 2020 coronavirus recession and may be poised to continue to hold its own as the 2022 or 2023 recession unfolds.
National Bank may be an outsider, but it can take a significant share as the bank seeks to expand west. Indeed, it is difficult to dethrone the banking behemoths, unless you offer a solid value proposition. By waiving trading commissions and investing heavily in technology, National Bank is a game to keep on your radar. New CEO Laurent Ferreira is an excellent manager who could help take the nearly $33 billion bank to the next level.
As rates rise, National Bank will benefit, and with such domestic banking exposure, I view the bank as less vulnerable to a US economic downturn. The 3.8% yield is ripe for picking and growing over the years.
The post Newbie Investors: 1 TSX Financial Stock to Buy and Hold Forever appeared first on The Motley Fool Canada.
Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has no position in the stocks mentioned.
This article first appeared on The Motley Fool