RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Back in Canadian stocks are looking more attractive than their US counterparts. The last time I've seen valuations this attractive was right around the GfC. I think stocks are being set up for a nice rebound once the next bull market begins. Unfortunately, contrary to what some are saying, I don't think we're in a new bull market with interest rates at these levels. There could be further pain ahead so invest wisely.
my best advice:
1) Reduce your debt.
Pay down your mortgage, credit card bills, etc. if your credit card is charging you 20%, do you think you're going to get that in the stock market? I don't think so. If your mortgage is 6.5% interest, any prepayment towards your mortgage will give you a 6.5% after tax return on your investment. If you invest in the stock market you need to accept a certain amount of risk and you still may not achieve a 6.5% after tax return.
2) t-bills/cash
Short term cash can give you a 5-5.5% nominal return on your money which currently exceeds the inflation rate. This is a good deal which gives you versatility without duration risks. Keep some cash on the sidelines for when shtf.
3) Gold/Silver
Central banks have destroyed the purchasing power of the dollar. Why not hedge some of that with gold and silver? If you believe inflation will be higher than the previous decade, then gold and silver may not be a bad bet.
4) Recession resistant stocks
I would avoid any company with large amounts of debt or is not generating positive fcf. A utility company such as Hammond Power Solutions is a great example of a quality low risk company that has fared well recently.
5) Do not invest in:
- companies that have a great concept but do not generate cash or revenue.
- companies that consistently increase debt or raise equity for financing. These companies usually have no moat or don't generate enough cash to pay the bills.
- companies that have no revenue diversification. If a pharmaceutical company relies on a magic pill to provide returns then you should think twice before investing.
That's about it for now.