Investment Q&A

We think bank stocks serve as good core holdings in a long-term investment portfolio. A large reason for the banks underperforming of late is high interest rates and general recession concerns. While banks do benefit from higher interest income, there is also the reduction in consumer loans and capital markets activity (non-interest income) resulting in less growth. As rates decline banks will be able to benefit from non-interest income while also potentially reversing provisions for credit losses if consumers service debt payments at a better rate than forecasted. For these reasons, our outlook along with the consensus is quite positive for financials and banks, and they are also a (generally) safe investment.

While there is more growth potential in tech names, these companies also have premium valuations due to the recent run-up in tech and high investor sentiment. AI tailwinds have been a catalyst for the market and we expect them to continue fuelling future growth for at least the short-mid term. We can't really compare TD and GOOG but if one wanted growth and no dividends we would certainly side with GOOG.