It Looks Like This Wild Stock Market Is Here to Stay

The stock market behaviour will remain crazy for a while with the lingering pandemic and a major political event. Meanwhile, expect the Jamieson Wellness stock to sustain its stride in the months to come.

| More on:

People should come to terms with the new life model and learn to coexist with the novel COVID-19. For example, the Japanese government is advocating a model on how to live and work while COVID-19 is still in our midst. The country is basing the model on the principles of rationality, science, and risk assessment.

In the same light, investors should expect the wild stock market to persist for an indefinite period. However, the uncertainty will not stem from COVID-19 alone, although it is still the preeminent threat. If you can’t accept the volatility, stay away from the market.

WHO warning

On July 13, 2020,  the World Health Organization (WHO) Chief Tedros Adhanom Ghebreyesus said, “If public health guidelines are not followed, the crisis will get worse and worse and worse.” The WHO chief is alluding to governments around the world that are bungling their response to the pandemic.

Some countries that were lifting lockdown measures are now witnessing a resurgence of COVID-19. It indicates that people do not follow the proven methods (physical distancing, handwashing and wearing masks) to reduce the risk of contracting the deadly virus.

Major political event

A major political event this year may affect global financial markets. The U.S. presidential elections will take place on Tuesday, November 3, 2020. Incumbent Donald Trump is the Republican candidate who is running for re-election. He will know his opponent after the Democratic party’s national convention on July 16, 2020.

Regarding the impact on stock markets, volatility is typically higher during election years than in non-election years. Markets often reprice the probability of the next administration’s policies. Interestingly, markets tend to react more positively post-election if a Republican president wins because they view the party’s policies as market-friendly.

Health is wealth

The stock market will be wild and woolly, but it doesn’t mean there won’t be investment opportunities. Jamieson Wellness (TSX:JWEL) should continue to skyrocket. The reason is apparent as this $1.39 billion company manufactures, distributes, and sells natural health products. Also, Health and wellness are the primary concerns today.

In Q1 2020 (quarter ended March 31, 2020), Jamieson’s revenue and adjusted net income grew by 16.5% (to $84.5 million) and 20.6% (to $7.8 million), respectively, versus Q1 2019. The revenue from Jamieson Brands surged by 24.5%, combined sales in Canada and international markets.

This consumer-defensive stock is outperforming the general market with its 37.5% year-to-date gain. The current stock price is $35.52, while the dividend yield is a modest 1.21%. Analysts covering the stock recommend a buy rating. They forecast the price to climb to $38 within a year.

Jamieson Wellness is not adjusting its business outlook for fiscal 2020. Management anticipates ending the year within a net revenue range of $364 to $376 million or growth of 5.5% to 9.0%.

Market influences

COVID-19 is the greatest enemy. As long as it is around, the virus can disrupt market behaviour at any time. The U.S. elections will add some tension. But one thing is certain: the world will not return to the old normal.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned.

More on Dividend Stocks

dividends can compound over time
Dividend Stocks

Want a 7% Yield? The 3 TSX Stocks to Buy Today

These TSX stocks are offering high yields of over 7%, making them attractive for investors seeking steady passive income.

Read more »

how to save money
Dividend Stocks

The Smartest Dividend Stocks to Buy With $200 Right Now

These smartest dividend stocks can consistently pay and increase their dividends in the coming years, irrespective of the macro uncertainty.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

3 Utility Stocks That Are Smart Buys for Canadians in November

These utility stocks benefit from regulated businesses and generate predictable cash flows that support higher dividend payouts.

Read more »

Start line on the highway
Dividend Stocks

Invest $10,000 in This Dividend Stock for $600 in Passive Income

Do you want to generate passive income? Forget the rental unit! This option will save you the mortgage yet still…

Read more »

Senior uses a laptop computer
Dividend Stocks

1 Reliable Dividend Stock for the Ultimate Retirement Income Stream

TD Bank (TSX:TD) shares are way too cheap with way too swollen a yield for retirees to pass up right…

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

Is Brookfield Infrastructure Partners a Buy for its 4.75% Yield?

Brookfield Infrastructure Partners (BIP) has a 4.75% dividend yield. Is it worth it?

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »