With the market decline today, almost every stock on our list would look like a buy based on past earnings. But of course fear could push stocks lower as the market anticipates that fear will also hamper the economy.
Investors with cash may want to slowly add to positions. Perhaps very slowly.
I notice the Canadian Western preferred share CWB.PR.D down around $20. (From about $25 on Friday). That seems attractive. Banks will continue to accrue interest on loans even if people are staying home. But the worry is loan losses. And the fear appears to be loan losses tied to the big drop in oil prices today. CWB has always had a strong record on loan losses but big losses are always possible. I nibbled on a bit of CWB and CWB.PR.D today.
Equity investing has never been for the faint of heart and times like this periodically remind of that. Our perceptions of how much of our portfolios to risk in equities changes during these times.
Coincidentally today, March 9, is the anniversary of the bottom of the market in 2009. The S&P 500 bottomed at 666 that day. From there we had huge gains for the past 11 years, with a few notable pullbacks and now this very notable pullback. We are at 2784 on the S&P at the moment. The financial crisis losses were horrendous to live through but eventually brought buying opportunities and those who rode it out did okay and ultimately much better than okay.
This crisis too will past but no one knows how deep the decline will be.