Why I’m Investing In Canadian Banks
You’ve certainly heard of the recent bank troubles in America. 3 banks have collapsed so far in March 2023 and this has created a ripple effect through the stock market. Most stocks have been on shaky ground since the banks have failed, and the financial sectors both in America and Canada have been hit hard.
In March, CIBC stock has dropped 8.68%, RBC stock has dropped 8.14%, TD has dropped 14% (they have a large US exposure), BMO dropped 10% Scotiabank dropped 8% and National Bank dropped just under 8%.
Some of the smaller banks I like have been hit even harder because the perception is that they are in a weaker financial position to weather the financial storm. Two of my favourites are EQB — down 14% and Canadian Western Bank also down 14%.
I’m a Buyer
Last week I started slowly trickling in cash, mostly to Canadian Banks and financials. I am a firm believer that this downturn is an opportunity for those who are in a good financial position and have cash on the sidelines. Accurately calling the bottom is not possible, so I won’t even try. I will simply continue to incrementally deploy cash into solid Canadian names and collect my dividends until this all blows over.
