The Financial Post reports in its Tuesday edition that timing the market is a tricky business. Guest columnist Ted Rechtshaffen writes that to do it properly, you need to get three things right: You need to buy in at the right time, sell at the right time and then reinvest your funds at a good time.
Mr. Rechtshaffen says it's an easy bet that markets go up over the long term, so it is much better to be invested for the long term as opposed to trying to be right three times in a row on timing.
There are companies that are now yielding 4.5 per cent or more per year, while trading at low valuations, even though they made more money in 2018 than any time in their history.
For instance, Bank of Nova Scotia has been the worst performer of the Big Six banks over the past two years. One of the reasons that this is important is that historically when a big bank underperforms it tends to play catch up. Scotiabank is definitely different than its peers from an international strategy standpoint, but it made two big Canadian acquisitions in 2018 with MD Management and Jarislowsky Fraser. It currently pays a 5-per-cent dividend and is trading at 9.8 times its forward earnings. It looks a cheap price to pay for 5 per cent.
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