When the TSX hits an all-time high, the natural reaction of many investors is to hesitate. It feels like you show up at the party after everyone else is already dancing. But the truth is that a record high is a normal part of the life cycle of a long-term market, not a sign that you’ve missed the boat. For disciplined investors, new highs often signal strength, not danger. The key is to look at it Why the index is at record levels, and what type of investor you are. These factors are more important than the number flashing on the screen.
What happened?
Let’s start with the context. The TSX today trades at almost 30,500, the highest level in its history. Since the 2020 crash, corporate profits have soared, inflation has pushed up nominal incomes, and several major sectors have returned to higher valuations as the global economy stabilized. So, is the TSX expensive right now? Not special. On a forward price-to-earnings (P/E) basis, the index trades at approximately 15 times expected earnings. That is only slightly above the ten-year average and well below American indices such as the S&P 500.
Another thing to remember is that record highs are more common than people think. Over the past 40 years, the TSX has hit new all-time highs hundreds of times, often right before heading higher again. Historically, if you had only invested when the market wasn’t hitting a record, you would have missed out on most of the long-term gains. Still, that doesn’t mean you should throw caution out the window. When markets are at a high, volatility risk increases. Investors are becoming more sensitive to bad news. When investing new money, it’s wise to temper your timing rather than trying to pick the exact top or bottom. A dollar-cost averaging strategy helps smooth out price swings.
For long-term investors, the question is not “Is it too late?” but “How long am I willing to stay invested?” Over a period of one year, market timing is very important. In ten years it will hardly matter anymore. History shows that if you invest in the TSX at any point and hold it for at least seven years, your chances of a positive total return are greater than 90%, even if you buy at a market peak. That’s because dividends provide stable income and dampen volatility, while worsening earnings growth.
Consider BNS
When markets are near record highs, it’s easy to assume the bargains are gone. But Bank of Nova Scotia (TSX:BNS) proves that even in an expensive market, there are still quality dividend stocks trading at discounts. Scotiabank shares lagged for some time, but are now back to 2022 levels. Yet it still looks attractively priced, with a share price of 17 times earnings and a dividend yield of 4.82%.
Scotiabank remains strong thanks to its position as an international banking power with approximately $1.4 trillion in assets. Its reach across Latin America gives it a growth profile that sets it apart from its peers. Recent earnings show why it still deserves attention. In the third quarter of 2025, Scotiabank reported net income of $2.53 billion, compared to $1.9 billion a year earlier.
From a macro perspective, Scotiabank is well positioned for a rate reduction environment. Lower borrowing costs will stimulate credit growth, reduce defaults and expand asset management activities. Meanwhile, the Latin American footprint could benefit from strong commodity cycles and US trade diversification. Even if the TSX as a whole pauses or consolidates after hitting record highs, Scotiabank’s combination of high yield, low yield and improving fundamentals makes it the kind of stock that can quietly outperform while others tread water.
Silly takeaway
All things considered, while the TSX appears fully valued, Scotiabank is not. When everyone is talking about how expensive the market looks, these are exactly the kind of reliable, undervalued dividend stocks that are quietly proving them wrong.
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