Given the mess in the financial sector, would anyone say that NOW is a good time to take a buy and hold position in a canadian bank. In specific I'm looking at CIBC (CM), whose stock has been nearly halved. Seems to have stabilized and is left with a lot of room to grow and recoup losses. Not to mention a little extra dividend income along the way. Any opinions?
Cibc is the worst canadian bank. Look at RBC, Scotia or TD. But why invest in banks really, are you a sovereign fund?
This is why 95% of traders fail. Who cares if it's a Canadian bank. If you're investing for the long term - diversify. Don't just pick one stock you think will go up.
RY is the best of breed, but has more sluggish price action. I've owned TD for over 4 years @ $42 in my long term account. When the TSE and the Canadian banks rally, TD moves hard. Nice yield of 3.3%. I tried to sell it @ $75.92 and missed the exit intraday by 8 cents. If it pulls back to the $50's, I'll probably add to the position.
I'm personally considering taking a position in T.HFD (double beta inverse Canadian financial sector). A bit tricky to time this well, particularly with a large down day Feb 29th, but the overall Canadian bank sector is not looking very good right now, and I don't see this substantially changing for at least 6-12 months. Royal Bank just paused their typically bi-annual dividend increases, I could see other banks potentially doing the same. BMO is struggling with their recent write-offs. Original poster already mentioned CIBC. ABCP plan is apparently now delayed until mid-April. In short, these companies will all be excellent long-term investments at some point, but I don't really feel that now is the time.
last summer i liked a combination of long TD and short cibc. td focuses more on retail opperations while cibc typically takes on more risky activities. imo a long short strategy might still be the best if you want to play canadian banks. the write downs are far from over.