Air Canada (TSX:AC) stock may seem like an investment that you would want to avoid. That might be the case in the short-term, but over the long-run, you might actually benefit from having this stock in your retirement portfolio. It could even be a millionaire-maker for some savvy, patient investors.
It’s true that the stock has been suffering from the COVID-19 induced slow-down in travel. The March 2020 pandemic scare was a tragedy worldwide. Airlines and cruise lines were arguably hurt the hardest by the health warnings.
Business travel can’t even keep airlines like Air Canada from hemorrhaging cash. Instead, companies turned to video conferencing technology like Zoom to communicate from a safe distance.
While the boom in technology might seem like the safer way to go in this environment, I would argue that investors should also consider betting on some of the stocks hit hardest by the pandemic.
Air Canada is one of those risky bets that investors should be eyeing to add to their retirement portfolios as a long-term bet.
What goes down can go back up
What investors need to do now is adopt a long-term mindset to their investments.
Imagine losing thousands of dollars in the stock market this year and not taking away any important lessons to use in the future. Every loss whether it be financial or otherwise is a lesson. Sometimes these are very expensive lessons.
Although many of us may be reeling from this crisis focusing on loss, I encourage everyone to concentrate on what they have gained. Knowledge is one of the most powerful forces there are. We learned a lot from the decline in the stock market price of Air Canada.
If we saw anything from this crisis is that fear-induced sell-offs like what we saw in March 2020 present a number of buying opportunities for experienced investors. These investors aren’t smarter or better educated than you. They simply have more experience.
During the course of their experiences, they gained knowledge from loss. Focus on the knowledge you gained by writing down exactly what you saw happen during this volatile time.
Try beginning with, “What goes down, can also go back up.”
Will Air Canada die as a company?
It’s unlikely that Air Canada won’t be around in 20 years. Even more unlikely is the scenario that no one travels ever again. That’s like falling in love, having your heartbroken, and then turning around and saying that you will never love another human being ever again.
That’s not rational.
People will start living their lives normally again. We aren’t going to start living in some futuristic world where we only take vacations with augmented reality technology. While that might seem an exciting concept, I’d still prefer enduring the hassle of airlines and being physically present at my vacation destination of choice.
Thus, Air Canada is not going to become extinct. You might have to weather some hard times with this company over the next couple of years if you start investing today. Nevertheless, you aren’t going to be investing in a worthless asset.
Invest slowly and confidently
One thing you shouldn’t do when picking out the remaining losers from the March 2020 sell-off is rush in to buy an entire position in one day. Spread out your purchases in stocks like Air Canada over time to take advantage of dollar-cost averaging.
That way, you can benefit from down days where market sentiment is the weakest. Remember that the trick to making money in the stock market is to buy low and sell high. That means you need to be confident in a brighter future when other people aren’t so sure.
Read about other TSX stocks to buy today
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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 Debra Ray has no position in any of the stocks mentioned. Tom Gardner owns shares of Zoom Video Communications. The Motley Fool owns shares of and recommends Zoom Video Communications.