Investing in March 2023: 1 Stock I’d Buy and One other I’m Steering Clear of

Tough sledding ought to be expected by Canadian investors trying to put latest money into the stock market in March 2023. January was hot, February was cold, and it’s a mystery as to what the ultimate month of the quarter will see. With renewed worries weighing, I’d not look to overreact either way.

As Warren Buffett said in his latest annual letter to shareholders, “near-term economic and market forecasts are lower than useless.” While I’m sure market strategists and people attempting to time the market’s next move are smart, I don’t think any amount of wits can predict how Mr. Market will behave next month and even next 12 months. He’s unpredictable by nature. That’s why timing markets is a silly (that’s a lower-case f) move, especially for those who’ve got money to place to work and value in your crosshairs!

Don’t ignore Warren Buffett’s words of wisdom

I feel Warren Buffett’s annual letters are wealthy with wisdom. Nowadays, with market volatility within the air, there is no such thing as a shortage of near-term forecasts calling for a considerable decline in stock values.

Indeed, markets have already surrendered an enormous chunk of the year-to-date gains. Based on momentum, then sure, it will appear to be there’s more pain ahead. Nonetheless, for those who’ve been within the investing game for long enough, you already know that things can activate a dime and in a rush.

That’s why it’s such a foul idea to take motion in response to latest developments that other investors have already had ample opportunity to digest.

On this piece, we’ll try one stock to purchase and one to carry off on, as recession headwinds begin to make an appearance.

A TSX stock I’d buy now: Dollarama

First, we’ll have a look at the stock I’d buy going into March 2023. Dollarama (TSX:DOL) is a reduction retailer that’s done incredibly well over the past 12 months of inflation and economic jitters. As a well-run defensive, Dollarama has a possibility to proceed its growth, at the same time as other economically sensitive firms take successful to the chin.

The stock is 7% off its January highs and appears like a compelling pick-up for investors who need to do well regardless of the economic pain which may be up ahead.

At 30.5 times trailing price to earnings (P/E), you’re paying up for the retailer. Nonetheless, I feel it’s a premium price price paying for, given Dollarama’s one in every of few corporations on the market that may turn the inflationary environment in its favour. Sure, Dollarama’s recent margins would have been higher without the recent inflation. Nonetheless, when it comes to firms that may offset inflation’s pressures, Dollarama should receive top grades.

Up ahead, Dollarama is prepared to boost prices. And I even have a sense customers won’t resist by opting to indicate elsewhere. At the top of the day, it’s tough to beat Dollarama’s value proposition.

And one I’d avoid: Manga International

Magna International (TSX:MG) is an auto-part maker that’s incredibly well run. Despite this, it’s a cyclical business that may feel the economic bumps within the road way more than firms like Dollarama. Magna stock has sold off considerably, with shares down greater than 41% from their highs. Still, the stock still seems a bit wealthy at 27.3 times trailing P/E, as higher costs take a bite out of margins, while demand stays a large query mark amid macro uncertainties.

The firm recently announced its expansion plans for Ontario. Though Magna is setting itself up for an incredible post-recession, I fear that the stock can have more room to the downside before, because the autos take successful.

Conclusion

Timing markets and making a fast buck within the short term may be very hard. As an alternative, investors should invest with the long term in mind. It’s this horizon where self-guided investors, such as you and me, can have an edge, or, on the very least, aren’t in a spot to lose within the unforgiving game of near-term trading.

At this juncture, Dollarama stock looks like a prudent bet, while Magna could also be a reputation to think about on an extra pullback.

The post Investing in March 2023: 1 Stock I’d Buy and One other I’m Steering Clear of appeared first on The Motley Idiot Canada.

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Idiot contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Idiot recommends Magna International. The Motley Idiot has a disclosure policy.