The Coronavirus Market: How to Buy TSX Stocks and Beat the Crash

The stock market is crashing. Here’s why buying stocks like Barrick Gold Corp. (TSX:ABX)(NYSE:GOLD) could beat the coronavirus market.

falling red arrow and lifting

Image source: Getty Images

The markets are exhibiting wild swings not seen since the 2008 Financial Crisis and the Great Depression of the 30s. Pundits are considering a coming recession. Even the ever-bullish White House has upped its chances of seeing a downturn. But what if a multi-quarter slump follows the coronavirus market? What if Canadian investors have to face another economic depression? Here are some ideas.

Great Depression 101: Know what you hold…

Investors should know their stock portfolios inside out at this stage. There has been uncertainty in the markets for many months on end. Even the most bullish analysts were predicting a coming bear market. Canadians invested in TSX companies should be in defensive positions with the best blue-chip stocks. The case for selling on a down cycle is weak, though it’s still not too late to trim stubbornly overvalued names.

This isn’t the time for indexing, either. Entire sectors are in the red right now thanks to the coronavirus market. That’s why new investors getting in at the ground floor should buy the most resistant names. Go through the TSX and look at which sectors had the lowest losses and biggest wins this week. This includes gold miners, healthcare, and consumer staples.

… and keep holding through the coronavirus market

The one piece of advice that every asset manager will give you right now is “don’t sell.” Why not? Because the market always comes back. It always has, and it likely always will. Those shares in CN Rail? They might be down this week, but that’s a high-quality business. It’s also a pillar of the Canadian economy. As such, it’s untouchable in the long run.

Those gold stocks that you put aside for just such an ocassion? They’re cheap right now, so why not add to them? Don’t look through your portfolio and looking in horror at a sea of red. What about quality names like Newmont and Barrick Gold? Get ready to add to them and hold long term.

The coronavirus market is highly volatile. The markets were already riddled with uncertainty. Oil prices were already crashing. Pundits were already talking about recession. But now all of those trends are compounded. And while an ordinary recession is baked in, the coronavirus market could become something worse. It could become another Great Depression if a credit crisis emerges.

That’s why investors should only buy the lowest-risk names right now. Yes, buy into deepening weakness. But keep those incremental investments tied to quality. Look for safe dividend stocks on the TSX. Buy into those blue-chip businesses that have been waiting on your wish list. Now is the time to put some cash to work.

The bottom line

Some investors may be tempted to time the bottom, but we might not be anywhere near it yet. That’s why buying a few shares here and there makes sense. Names like CN Rail and Barrick keep popping up. Investors are clearly seeing these names as the most stable Canadian stocks in the current coronavirus market. Those names’ yields are also higher right now, up at 2.4% and 1.6%, respectively.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway. 

More on Coronavirus

A airplane sits on a runway.
Coronavirus

3 Things to Know About Air Canada Stock Before You Buy

Air Canada stock continues to hover below $20 despite the sharp rise in travel demand seen across the industry. What's…

Read more »

tech and analysis
Stocks for Beginners

If You Invested $1,000 in WELL Health in 2019, Here is What It’s Worth Now

WELL stock (TSX:WELL) has fallen pretty dramatically from all-time highs, but what if you bought just before the rise? Should…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Coronavirus

2 Pandemic Stocks That Are Still Rising, and 1 Offering a Major Deal

There are some pandemic stocks that crashed and burned, while others have made a massive comeback. And this one stock…

Read more »

Dad and son having fun outdoor. Healthy living concept
Dividend Stocks

1 Growth Stock Down 15.8% to Buy Right Now

A growth stock is well-positioned to resume its upward momentum in 2024 following its strong financial results and business momentum.

Read more »

Double exposure of a businessman and stairs - Business Success Concept
Stocks for Beginners

3 Things About Couche-Tard Stock Every Smart Investor Knows

Couche-tard stock (TSX:ATD) may be up 30% this year, but look at the leadership and history of the stock to…

Read more »

Plane on runway, aircraft
Coronavirus

Can Air Canada Double in 5 Years? Here’s What it Would Take

Air Canada (TSX:AC) stock has gone nowhere since 2020. Can this change?

Read more »

Senior housing
Stocks for Beginners

Home Improvement Stocks Are Set to Fall (When They Do, Buy These Like Crazy!)

Home improvement stocks are due to drop further in the coming months. But with solid underpinnings for the sector, it…

Read more »

An airplane on a runway
Coronavirus

Forget Boeing: Buy This Magnificent Airline Stock Instead

Boeing (NYSE:BA) stock is looking risky right now, but Air Canada (TSX:AC) stock? Much less so.

Read more »