While it is painful to experience sharp losses, market downturns are typically a very good time to shop for stocks. In the market lows of 2002 or 2003, you could have blindly picked up a group of stocks and still made a decent profit. I have no idea if the sharp sell-off last week is a dip, a long-awaited market correction (I can’t recall if we even got a 10% correction in the current bull market) or the initial roar of a bear market but I do know that I have a shopping list ready:
- RioCan REIT (TSX: REI.UN): We don’t have any REITs in our portfolios and I’ve been watching them for a while now. RioCan is the largest public REIT in Canada and I would like to establish a position at the right price. REITs began correcting even before the equities market and RioCan is down by about 15% from its recent peak and would be interesting at around $20.
- Emerging Markets (VWO): Our emerging market exposure is about 2% but our allocation target for this asset class is 5%. Despite the recent sell-off, VWO is just 5% off the recent highs. Emerging markets would have to fall a lot more before I would be interested.
- TD Bank (TSX: TD): I first bought TD Bank many years ago and have periodically added to our holdings. TD is now trading slightly above $68, well off the recent high of $74. Still, as we have a slightly larger exposure to Canadian equities than our plan calls for, I’ll probably hold off on increasing our position. I am not planning to add to our other bank holding (BNS) because it is already at a higher percentage of our total portfolio.
Do you have your shopping list ready? If you do, which stocks are on it?