When the TSX hits an all-time excessive, the pure response for a lot of buyers is to hesitate. It appears like exhibiting as much as the occasion after everybody else is already dancing. However the reality is, an all-time excessive is a standard a part of a long-term market’s life cycle, not a purple flag that you just’ve missed the boat. In reality, for disciplined buyers, new highs usually sign energy, not hazard. The secret is to have a look at why the index is at document ranges, and what sort of investor you’re. These elements matter greater than the quantity flashing on the display.
What occurred?
Let’s begin with context. The TSX immediately trades at nearly 30,500 factors, the very best degree in its historical past. Because the 2020 crash, company earnings have surged, inflation has boosted nominal revenues, and several other main sectors have re-rated larger as the worldwide financial system stabilized. So, is the TSX costly proper now? Not significantly. On a ahead price-to-earnings (P/E) foundation, the index trades round 15 instances anticipated earnings. That’s solely barely above its 10-year common and nicely beneath U.S. indices just like the S&P 500.
One other factor to recollect is that all-time highs occur extra usually than folks assume. Prior to now 40 years, the TSX has hit new data a whole lot of instances, usually proper earlier than going larger once more. Traditionally, when you’d solely invested when the market wasn’t at a document, you’d have missed most of its long-term positive factors. Nonetheless, that doesn’t imply you must throw warning out the window. When markets sit at highs, volatility threat will increase. Buyers turn out to be extra delicate to dangerous information. For those who’re investing new cash, it’s clever to mood your timing relatively than attempting to select the precise high or backside. A dollar-cost averaging technique helps easy out value fluctuations.
For long-term buyers, the query isn’t “Is it too late?” however “How lengthy am I keen to remain invested?” Over a one-year interval, market timing issues so much. Over 10 years, it issues nearly by no means. Historical past reveals that when you put money into the TSX at any level and maintain for no less than seven years, your odds of a constructive complete return exceed 90%, even if you purchase at a market peak. That’s as a result of dividends present regular revenue and cushion volatility, whereas earnings development compounds beneath.
Think about BNS
When markets are sitting close to document highs, it’s simple to imagine the bargains are gone. However Financial institution of Nova Scotia (TSX:BNS) proves that even in an costly market, there are nonetheless high quality dividend shares buying and selling at reductions. Scotiabank shares lagged for a while, however are actually again at 2022 ranges. But it nonetheless appears to be like attractively priced, buying and selling at 17 instances earnings, with a 4.82% dividend yield.
Scotiabank stays robust due to its place as a world banking powerhouse with roughly $1.4 trillion in property. Its attain throughout Latin America offers it a development profile that units it aside from its friends. Latest earnings present why it nonetheless deserves consideration. In its third quarter of 2025, Scotiabank reported internet revenue of $2.53 billion, up from $1.9 billion a 12 months earlier than.
From a macro perspective, Scotiabank is positioned nicely for a rate-cutting atmosphere. Decrease borrowing prices will stimulate credit score development, cut back delinquency charges, and broaden wealth-management exercise. In the meantime, its Latin American footprint may benefit from robust commodity cycles and U.S. commerce diversification. Even when the TSX as a complete pauses or consolidates after hitting document highs, Scotiabank’s mixture of a excessive yield, low a number of, and bettering fundamentals makes it the type of inventory that may quietly outperform whereas others tread water.
Silly takeaway
All instructed, whereas the TSX might look absolutely valued, Scotiabank doesn’t. When everybody’s speaking about how costly the market appears to be like, that is precisely the type of reliable, undervalued dividend inventory that quietly proves them fallacious.
