Warren Buffett is a name that’s become synonymous with great investment ideas. It’s clear why. The billionaire finance guru came from nothing and is now arguably one of the best investors of the last century. Yet when it comes to some of his investment ideas, they can be quite simple.
Today, I’m going to give you the top mistakes to avoid, especially as Canadians continue to trade in a volatile market. Let’s get right to it.
Buffett: Avoid these dumb mistakes
When it comes to investing, it really comes down to humans being way too human. We go with our gut. We make emotional decisions. Ultimately, we stay away from data, wondering if we’re in the wrong and everyone else is in the right.
Yet Warren Buffett, again and again, states to avoid these types of mistakes. First, he states often that investors need to push fear and greed aside to make smart investment choices. Don’t be fearful that your stock might fall if you’ve done the research and worked with an advisor. Trust your research and hold long term.
But it goes further than that as well. Investors might see a pessimistic market and sell or an optimistic one and buy. Instead, stick to the data that will help you identify opportunities. Speaking of opportunities, though, there is also the fear of missing out (FOMO) in the investment world. We all know the one person who purchased a top growth stock at $1. But there’s a reason these stick out; it’s because it’s pure luck and chance — unless you have insider information.
Finally, don’t fall for the trap of panic and euphoria. You see shares dropping and sell in a panic, worried it will drop further and you’ll miss the opportunity to get out. Yet there’s just as importantly the chance to buy in a euphoric position, with shares at all-time highs leading to more purchases instead of waiting on a dip.
Instead, stick to the data. These are companies, not humans, and should be treated as such. This is why now we’re going to look at a company that investors can look into further.
Bank on it
Perhaps one of the best opportunities during a downfall is through Canadian banking institutions. There hasn’t been a banking crisis since 1840, providing investors with a strong option to get in when shares drop and all but guarantee a recovery.
That’s the case with Canadian Imperial Bank of Commerce (TSX:CM) right now. CM stock has been around for decades, going through multiple recessions and coming out strong on the other side. This comes from provisions for loan losses, of which it continues to use even now.
Granted, it’s been a difficult few years with a volatile market on top of a pandemic. Even so, the bank will persevere, as it has recession after recession. And right now, CM stock is a steal, trading down 8% in the last year but still up 50% in the last decade.
Plus, CM stock offers a solid dividend yield of 6.14%, one of the highest of the banks right now. Finally, it trades at just 11.11 times earnings, which is lower than its peers at this point as well. While the stock may take longer to rebound than the other banks with its exposure to housing, it still has a long-term growth path ahead of it for investors to consider.
Bottom line
So, don’t be fearful of the financial institutions trading down; instead, get in on the action. These are great deals that offer superior dividends for investors these days. Buy now, and you could have a portfolio that even Warren Buffett would drool over.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
