The market crash has been brutal. Stocks that had been growing for years have come to a screeching halt. Even rock-solid bank stocks sank by 20% or more.
In a bear market, cash is king. Few investors have excess capital when prices are plunging. Yet buying during a market crash is a proven way of making big money over the long term. You just need a little patience and a lot of bravery.
But you shouldn’t be buying just any stocks. Most investments will rally during the next bull market, but some will rise considerably more. These growth stocks should be at the top of everyone’s buy list. Other stocks, meanwhile, will let you sleep easy at night, no matter how long the market crash persists, or how painful it gets.
Whether you load up on long-term growth stocks or pivot to recession-proof businesses, don’t let the current buying opportunity go to waste.
Think long term
Canada Goose Holdings Inc (TSX: GOOS)(NYSE: GOOS) isn’t a stock that you want to own for a few months. It’s a stock you want to own for a few decades.
Founded in 1957, Canada Goose has a pedigree that can’t be replicated overnight. The first Canadian to ever summit Mount Everest was wearing Canada Goose gear. The scientists in Antarctica also don its merchandise. Roughly 5% of all Canadians owns one of the company’s jackets. That’s incredible considering they’re priced at $1,000 each.
In 2017, the company went public at $23 per share. By late-2018, shares had exceeded $90. The opportunity was clear. By leveraging its entrenched reputation as one of the highest-quality jacket makers in the world, Canada Goose could target markets far beyond Canada. China, the largest luxury market in the world, was the biggest target. Shares traded at 150 times earnings as management opened its first stores abroad.
Then the coronavirus hit, with China as the epicentre. Retail sales worldwide have fallen off a cliff. Canada Goose shares fell below the original IPO price. The stock now trades at less than 20 times earnings. Yet the long-term international growth opportunity is still intact. It will just be a year or two delayed.
If you have the patience, Canada Goose stock is an outright bargain following the market crash.
Skip the market crash
Hydro One Ltd (TSX: H) stock will allow you to bypass the pain altogether. There’s no need for patience with this company. What you see is what you get. But what exactly do you get?
Hydro One is a rate-regulated utility that delivers electricity to customers in Ontario. Its transmission lines cover 98% of the province, granting it a near-monopoly. In exchange for this market power, the government puts a rate cap on how much it can charge customers. That limits upside, but importantly, there’s also a pricing floor. That limits downside.
Rates are set years in advance. Electricity demand, meanwhile, rarely falls from year to year, even during a recession. All of this means that short-term economic volatility has nearly zero impact on the business.
This stock will never blow you out of the water. Its stable operations deliver a 4% dividend yield, and management targets long-term rate base growth of around 5%. In total, shareholders should receive a reliable high-single-digit annual return. That’s nothing to write home about, but that measly return could become a king’s ransom if the market crash continues.
