Don’t wait for some kind of broad market pullback to put your latest TFSA (Tax-Free Savings Account) contribution of $7,000 to work in stocks or other investments. Indeed, it’s not hard to imagine that many folks still have yet to deploy their 2024 TFSA contributions in stocks, perhaps parking the funds in those so-called “high-yield” savings accounts until Mr. Market serves up a slightly better entry point.
Indeed, it certainly has been a long time since we’ve felt the full force of a market correction (that’s defined as a 10% fall). The most we’ve had is a mini-correction of around 5% (of course, this is an informal definition!). And though such bumps in the road have felt painful, given we’ve all gotten so used to markets moving higher on a week-to-week or month-to-month basis, I still think that any modest dips, either rate-induced or otherwise, should be viewed as a chance to put some money to work in stocks that may be trading at discounts to their true worth.
It’s easy to put off new stock buys for your TFSA.
Either way, if your TFSA cash hoard is growing and you’re still on the sidelines over pundit predictions and commentary (Jamie Dimon was the latest to warn of stock valuations, which he described as “kind of inflated”), I do think putting a portion to work on value names on your watchlist can make sense. And for the many stocks that won’t give you so much as a correction to jump in, I’d say it can’t hurt to initiate a “starter position,” whether that’s 10% of your desired full position, 25%, or more.
Provided you keep your commissions in check (let’s say 1% or less per trade), I think a dollar-cost averaging approach (DCA) is far better than sitting and waiting for the stock market to crash, correct, or crumble. With the so-called AI boom more than two years old, we may very well start seeing the serious economic benefits trickle in to propel the broader economy.
Restaurant Brands International
Restaurant Brands International (TSX:QSR) is a cheap and easy way to expose your portfolio to four cherished quick-serve restaurant brands. Whether you’re a fan of Burger King, Popeye’s Louisiana Kitchen, Firehouse Subs, or the great Tim Hortons, the quadruple threat of chains, I believe, has the ability to power decades worth of fairly predictable, low-tech growth. Indeed, the firm can afford to expand worldwide while keeping enough capital on the sidelines in case an M&A opportunity arises. Personally, I’d be even more bullish if QSR were to make a big move this year, with so many fast-food firms seemingly in a rough spot after a relatively harsh 2024 for the industry.
While the “value menu” wars could heat up, I like the set-up for QSR stock after sliding 14.4% in the past year. Indeed, the market may not give you a chance to buy a correction, but with QSR shares, the bear remains in the driver’s seat. At 15.2 times trailing price-to-earnings (P/E), with a 3.8% dividend yield, I view the underrated low-tech growth gem as severely undervalued at $87 and change. In my view, the latest slide in the name is completely overdone.
Also, it’s noteworthy that QSR has all the makings of a long-term dividend hero, with a dividend that has room to grow at a steady pace over the next decade. Of all the dividend growers with yields close to 4%, QSR stock has to be one of my favourites. So, if you’ve got uninvested TFSA cash, perhaps QSR is worth watching in 2025. In short, QSR is a 2024 laggard that could become one of the bigger winners for 2025 and the latter half of the 2020s!