New TFSA (Tax-Free Savings Account) investors should stop trying to get the perfect entry point and look to inch into the market waters slowly and steadily over time. Indeed, it was a turbulent time to get started investing at the start of the year. With strong gains in the books for the biggest losers (mostly big-cap tech) in the first half, those left sitting on the sidelines may wish to wait even longer for some sort of near-term pullback.
Indeed, it’s always wise to be ready for the next market correction or bear market. However, being kept on the sidelines for too long can accompany the risk of missing out on gains. New investors should think about maximizing their time in the stock market, rather than timing the “best” entries or exits.
As the old saying goes, it’s more about time in the market, not timing the market!
As the S&P 500 approaches its all-time highs, new TFSA investors may wish to rotate into some of the value plays that haven’t seen their multiples swell by a considerable amount. In this piece, we’ll check out two simple, TFSA-worthy stocks that may have catalysts to finish the year at a much higher level, even if big tech has a big fall over the coming months.
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Cineplex: “Barbenheimer” could send shares above $10
Cineplex (TSX:CGX) stock has been a TSX dog for many years now. The pandemic seemed like the knockout blow, but years later, the company is still standing. And it may finally be ready to get back on its two feet, thanks in part to an incredibly hot summer movie lineup. Barbenheimer weekend (the release of Barbie and Christopher Nolan’s Oppenheimer) is upon us, and it could breathe new life into movie theatre companies.
Of course, Hollywood writers’ and actors’ strikes could bring forth pressure in the near future. But at this juncture, I do think investors may be underestimating the tailwind of hit summer blockbusters and their ability to encourage people to get out to see a film again.
At $9 per share, I do think the stock is looking too cheap for its own good.
CP Rail: Kansas City Southern merger hopes seem discounted by investors
Up next, we have shares of CP Rail (TSX:CP) or Canadian Pacific Kansas City (CPKC), which is up a modest 4% year to date. Undoubtedly, investors seem to have mixed feelings about the new CP Rail. The $99 billion rail juggernaut has an impressive and extensive network, but it will take time to bring out the best in the new assets brought aboard.
If you’re a TFSA investor with 5-10 years to invest, I’d argue the current valuation is an incredible deal. The stock goes for a modest 26.6 times trailing price-to-earnings, with a 0.71% dividend yield. Though it will take some time, I am a fan of management’s abilities and their plans to bring out the best in its new rail network.
Though the dividend yield is small (under 1%), I expect the company’s focus on driving earnings and dividend growth could make the stock one of the market’s best dividend-growth gems.
