Image Source: Getty Images
Heading into December, there was hope to end an incredibly volatile year in positive territory. The S&P/TSX Composite Index It rose close to 10% from early October to late November. It gradually sold off in December, however, and the market is now down about 10% year-to-date.
There has been no shortage of macro-environmental headlines driving stock market volatility this year, with interest rate hikes and inflation being the two main catalysts. And then if you throw in significant geopolitical concerns, I’d argue that it’s a surprise the market hasn’t fallen further this year.
Taking advantage of market declines
Riding through market downturns is never easy, especially volatile ones like this one. Having a long-term mindset can go a long way in years like 2022. A longer time horizon allows investors to be opportunistic when making reactive decisions that they may soon regret.
Although the Canadian stock market is only down 10% in 2022, many of the top TSX stocks are trading at a bigger discount than that.
The macro-environment has affected the share prices of many Canadian companies this year. The reality is that many failed TSX stocks are still doing well. That’s why this is an incredibly opportune time for long-term investors to pour money into the stock market.
I’ve reviewed two of the best TSX stocks that long-term investors should have on their watch list. I am already a shareholder in two companies, but I would like to add to my positions in early 2023, especially if these prices still hold.
TSX Stock #1: Brookfield Renewable Partners
The Renewable Energy Sector Part of the market is what I urge the long-term investor to be exposed to. With tailwinds evident in recent years, I don’t expect the demand for renewable energy to start slowing anytime soon.
Brookfield Renewable Partners (TSX:BEP.UN) is the perfect choice for anyone looking for their first green energy stock to invest in. Don’t get me wrong; It’s also a solid choice for the seasoned energy investor. But with a $20 billion global energy leader, Brookfield Renewables shareholders are getting immediate diversification into the growing renewable energy space.
Shares have risen 50% in the market over the past five years. And that’s not even including the company’s impressive nearly 5% dividend yield.
Brookfield Renewable Partners may be the market-beating stock, but shares are still trading at a huge discount today. TSX shares have been selling off steadily since the start of 2021 and are now about 50% off their all-time highs.
TSX Stock #2: Shopify
The technology sector has been one of the biggest losers in the Canadian stock market this year Shopify (TSX:Shop) definitely felt the pain. The Technical stock It is down nearly 70% year-to-date and 80% from an all-time high set in late 2021.
Like many stocks on the TSX, the performance of Shopify stock in 2022 is not a direct reflection of the health of the business. Despite some bumps in the road over the past year, revenue growth has continued to climb as Shopify strengthens its position in the e-commerce industry.
Shopify stock outperformed itself in 2020 and is now paying the price. If you have time on your side, this is a growth stock you’ll want to own for decades to come.