Canadian investors who’ve yet to put their 2023 TFSA (Tax-Free Savings Account) contribution (it was $6,500 for 2023) this year may wish to pick from the market wreckage after the last three months’ worth of selling. Indeed, investors may be a bit fearful this time around. But as we inch closer to the holidays and year’s end, we will be entering a period of seasonal strength.
Indeed, the Santa Claus rally could help give a much-needed lift to the slumping markets. And though there’s no guarantee that Santa Claus will be coming to town this year, I think it’s hard to argue that valuations are looking pretty reasonable this November.
Either way, 2024 is just two months away. And come the new year, Canadians will be able to top-up another contribution (it’s been raised to $7,000 for 2024!) to their TFSAs. Indeed, I think it’s better put invest in wonderful stocks for the long run, rather than waiting for the dust to settle and attempting to time a “bottom.”
So, if you’re looking for something to pick up with your long-term-focused TFSA retirement fund, I have a pair of names that look interesting at current levels.
First up, we have TD Bank (TSX:TD), which is fresh off its 52-week (and multi-year) lows of around $76 per share. Today, the stock goes for just shy of $78 and trades at 10.02 times trailing price to earnings (P/E), with a dividend yield of 4.96%. Indeed, TD isn’t the only bank that’s been dragged through the mud this autumn.
The broader bank scene is under pressure due to macro headwinds. At this pace, it seems like the pain will never end! In any case, I think a recession is mostly a given at current prices, as Canadians continue ditching the bank stocks due to their recent underperformance relative to the market averages. Doing so could be a mistake, though, especially at these valuations.
Though it’s hard to time a bottom, I’d not be afraid to initiate a position here for a long-term-focused TFSA. At the end of the day, TD is a robust bank that was built to survive even the worst downturns. Undoubtedly, the TD stock chart isn’t pretty. But if you’re looking to the next four years, I think it’s hard to look past the battered blue chip, which stands out as one of the best of the batch these days.
Up next, we have Berkshire Hathaway (NYSE:BRK.B), the legendary conglomerate headed by the great Warren Buffett. Indeed, Buffett has really adapted over the years, expanding his circle of confidence to encompass railways and technology.
As we move into the artificial intelligence age, it will be interesting to see how Berkshire looks to bet on the trend. Either way, you can be sure that Buffett and company will be all about getting value for their money.
As the firm navigates a rough patch in the economy, investors may wish to nibble away at any dips. Berkshire stock truly is one of those long-term holdings you can hang onto for decades at a time.
Shares of BRK.B are recovering from a recent dip into correction territory. At $343 and change, I view shares as ripe for buying going into year’s end.
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* Returns as of 10/10/23
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