Category Archives: Growth Investing

Stock Market is High: Time to Stop Buying Stocks?

The stock market is trading near its all-time high. Morningstar revealed that of the 682 U.S. stocks that its equity analysts cover, “only 5(!) have 5 stars, while 83 receive a single star.”

For those who are not familiar with Morningstar’s star system, 5 stars represent super undervalued while 1 star represents super overvalued. 

The Volatility Index, the “Fear Gauge” or “Fear Index” is a 30-day forward-looking measure of the volatility of the market. The lower the VIX is at, the less fear or more complacent the market is and vice versa. The Volatility Index also suggests there’s little fear in the stock market right now. 

Source: Stockcharts – Volatility Index

Although Morningstar covers less than 20% of the stocks on the U.S. market, its coverage includes many prominent names across different industries.

Should investors stop buying stocks in a high market? As the stock market has ascended to new heights, it has become more difficult to find value, but they do exist if you look for it.

Read More

A Canadian Dividend Aristocrat in the Making?!

A Canadian Dividend Aristocrat typically refers to a TSX stock that has increased its dividend for at least five years. Ever wonder what a Canadian Dividend Aristocrat must be like before it actually becomes one?

Let’s rewind a bit. The stock must pay its first dividend and after that, be able to continue increasing its dividend year after year. Therefore, it should generate stable (ideally growing) earnings. 

I believe I have a stock here that is a Canadian Dividend Aristocrat in the making. However, I’m probably way ahead in this thinking because it’ll likely take years before it will pay its first dividend.

Why do I hold shares of this stock now if it pays no dividend? …because if I’m right, this stock is going to give me a whole lot of capital gains before it initiates a dividend. 

Right now, this small-cap stock has better places to allocate its capital. It was no April Fool’s joke when it announced another acquisition on Thursday, which drove the stock price 13% higher. 

Source: Yahoo Finance – TSX:CTS’s April 1, 2021 price action
Read More

5 Key Stocks to Invest in 2020 and Beyond

Let’s cut to the chase. Here are the four types of stocks that you’ll want to be invested in 2020 and beyond. 

Rome, Italy. Image by Andrea Spallanzani from Pixabay

Tech stocks: e-commerce, cloud

Too many businesses have been impacted by the COVID-19 pandemic — some more so than others. Restaurants, tourism, and retailers have been more greatly impacted. On the contrary, the tech space has outperformed, as most tech companies operate in a growing pie. 

Particularly, you’ll want to invest in tech stocks that have exposure to e-commerce, cloud, or growing markets. Many of these stocks don’t pay a dividend, but investors should consider them for growth. 

Here are some examples: Alibaba (NYSE:BABA), Alphabet (NASDAQ:GOOGL)(NASDAQ:GOOG), Amazon (NASDAQ:AMZN), JD.com(NASDAQ:JD), Microsoft (NASDAQ:MSFT), Tencent (TCEHY), etc. They have greatly outperformed the U.S. stock market in different time frames, but the chart below shows the past five years.

Chart
Data by YCharts

Healthcare stocks

Healthcare is also another growth area you’ll want to stay invested in. There’s the megatrend of an aging population.  Additionally, healthy people want to stay healthy and sick people cannot go on without their drugs or medical devices. 

The most conservative investors would look into adding Johnson & Johnson (NYSE:JNJ) opportunistically as a core holding. Bristol-Myers (NYSE:BMY) is another quality dividend payer. JNJ yields 2.6%, while BMY yields 2.9%.

Abbott Labs (NYSE:ABT) and Medtronic (NYSE:MDT) are also A-grade healthcare stocks to consider on dips. 

Read More