The best Canadian stock to buy in October 2021
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Don’t let the recent barrage of volatility derail your long-term investment plans, as many of the best Canadian stocks have become all the more attractive after a rocky start to October 2021. Indeed, September and October are dreaded times to be an investor, and this year gave us a 5% correction. Will it be prolonged before investors hit their bill ahead of a possible Santa Claus rally? Only time will tell, but investors should not take the pleas of market strategists as gospel.
Choppy start to October 2021 could prove to be this year’s best buying opportunity
Far too many strategists are bearish in the markets right now. While there are real risks that could propel us into a bear market, I would say such extreme scenarios are unlikely. But does that mean you shouldn’t be preparing for it? Definitely not. You should always prepare for the worst.
Having said that, you should not position your portfolio in such a way that you stand to lose if a bearish scenario does not occur. Without a doubt, you could miss out on any winnings by being a wallflower, stuck on the sidelines with too much money. Plus, with inflation likely to stay high for a few more quarters, your purchasing power is about to take a hit. While you won’t lose money playing it safe and accumulating money, while waiting for a 20% drop, your wealth will lose power at a faster rate.
Inflation increases the upside risks of holding cash and bonds
Inflation is transitory. At least that’s what the US Fed believes. But what does that mean? And why is President Jerome Powell “frustrated” with the rate of inflation, which is not expected to go away in early 2022? Is inflation transient insofar as it will moderate and fall back to 2% in the coming months? Or is it the next few quarters? What if inflation stayed high for years, like in the 1970s?
We all feel the pain of inflation these days. And unfortunately, no one knows with any degree of precision when it will pull back and what the implications for the stock market will be. Either way, investors should view the recent 5% drop as a buying opportunity to put more money to work. Like it or not, we may not hit that official 10% correction, as many expect this year or even over the next 18 months, given the lack of investment alternatives. that can generate a fairly decent return.
Algonquin: A leading Canadian title to play defensively in the short term and offensive in the long term
For many young people today, the connections are no longer worth the trouble. But that doesn’t mean that young investors should take more risk in the stock markets. Algonquin Power & Utilities (TSX: AQN) (NYSE: AQN) is just one of many dividend-growing stocks that have recently plunged into high-value territory amid COVID pressures.
Without a doubt, Algonquin’s juicy initial yield of 4.7% is worth reclaiming the stock on its last dip. But its low valuation makes it one of the cheapest green energy games on the market. TSX Index these days.
While the headwinds of COVID may have a slight impact on longer-term growth prospects, the stock price is already valued with nothing but negativity in mind. Given the deep secular tailwinds in the green energy space and the premium that should accompany high quality utility assets, Algonquin has no business that trades below 14 times earnings. Fresh from a decline of nearly 19%, the low-volatility stock, which has a beta of 0.38 over five years, looks like a magnificent way to dampen the volatility that will come with unexplored waters on the horizon. .