One of the hardest things about being an investor is being able to keep a long-term view, especially when short-term developments can seem like they are of major importance. During a market crash, there are a lot of emotions that investors will go through.
Even if you can hold off the urge to sell your stocks as the market is falling (one of the toughest impulses to get over), you may be hesitant to buy stocks. This could be because you don’t want to catch a falling knife, and you may think stocks will continue to decline.
It’s extremely hard in these circumstances to get a grasp on what stock prices are justified and what aren’t.
The easiest way to do this is to keep a long-term mindset and buy stocks once they become so valuable that you can’t pass them up. Of course, the companies have to be high quality, but if you stick to his mindset, you’ll set yourself up for significant gains as the market recovers.
Back in late February and March, the TSX declined by roughly 40%, but some companies declined much further.
This creates a massive opportunity for investors to buy these stocks when they are trading irrationally cheap and realizing a major profit, as investors start to rush into the stock when confidence returns to markets.
Here are two top stocks that you could have made a fortune during the last market crash to watch again the next time around.
TSX energy stock to buy in a market crash
A major reason why the market crashed so fast in March was due to the shock to oil markets. This caused TSX energy stocks to sell off far more than the market and created a major buying opportunity for investors.
One of those stocks was AltaGas (TSX:ALA). AltaGas has midstream energy assets that could be exposed if the Western Canadian energy industry suffers. However, it also has utility assets that help keep the company extremely robust.
This isn’t the same AltaGas as a few years ago. The company has gone through an impressive transformation, selling non-core assets and improving its financial position.
That’s been key for the company to weather this storm. Going forward, AltaGas is well positioned with significant growth opportunities for years to come.
So, with its stock still trading roughly 30% below its 52-week low after the market crash, it’s the perfect opportunity to scoop up some shares of this top TSX stock.
Top long-term TSX stock
Stocks that are traditionally long-term performers are also ones you’ll want to pick up when they are down. These stocks always trade with a premium, so any time you can get them undervalued in a market crash, you are taking advantage of a rare opportunity.
Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) is one of those top TSX stocks. The company is roughly 25% below 52-week high and offers a major opportunity.
Brookfield is one of the best businesses in the entire world. The company is a top asset manager, capable of finding high-quality or distressed investments and growing them to be massive cash cows.
The company takes advantage of opportunities like this. Many companies around the world that have been caught off guard could face strong headwinds. Those that have the best fundamentals and trade undervalued due to their current situation are usually the number one target for Brookfield.
The stock remains off its highs, as it’s being weighed down because of its real estate portfolio. However, despite this being a headwind, Brookfield has more than enough size and strength to deal with this.
The company even announced a $5 billion package to invest in and help ailing retailers during the pandemic.
So, on top of being able to buy one of the top TSX stocks for super cheap after the market crash, you know Brookfield is also growing its long-term potential in this environment as well.
Knowing which stocks are the best long-term businesses ahead of a market crash will give you a major advantage. This way, you can buy the stocks as you see them getting cheap, which will set you up to make several times your initial investment.
In addition to these top long-term stocks, here are five other TSX stocks to consider.
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Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Brookfield Asset Management. The Motley Fool recommends ALTAGAS LTD. and BROOKFIELD ASSET MANAGEMENT INC. CL.A LV.