The financial sectors in both Canada and the United States has seen a marked retreat in recent months as investors attempt to quantify what the ultimate economic impact the coronavirus will have on the health of the domestic and global banking systems.
In this article, I’m going to discuss why, in this context, Bank of America (NYSE:BAC) could be an interesting buy today for long-term investors.
Large financial institutions like Bank of America tend to rally hard post-recession, so picking up shares of these behemoths when the going gets tough has proven to be a very profitable strategy. With most analysts and financial experts agreeing that a financial crisis the likes of which we saw proliferate in 2008 is unlikely to unfold this time around.
Those who were brave and bought the dip during the period of volatility we experienced in March may be handsomely rewarded.
The future remains uncertain, and loan loss provisions remain elevated for all banks (Bank of America doesn’t get a pass here). However, lenders like Bank of America have the size and scale to ride this storm out and give long-term investors the best shot at both weathering the storm and coming back strong when the economy returns to normal.
I would recommend investors keep U.S. lenders like Bank of America on your watch list during times like these and look for another attractive entry point like the one we saw in March.
Invest wisely, my friends
