Many investors believe there could soon be another market crash. These things are so hard to predict, though, that nobody can really know what’s going to happen. Therefore, we must be ready for everything, which means investors should continue to buy TSX stocks today.
Avoiding owning stocks because you think there may be a market crash is a big mistake. Trying to time the market is something that gets a lot of investors in trouble and could lead you to miss out on a lot of upside gains in the short run.
Therefore, it’s still important to be buying and holding high-quality TSX stocks. That way, you still have exposure to top companies if the market doesn’t crash. However, if the market does end up selling off, your capital will be protected by quality investments.
Here are five safe TSX stocks to buy if you think a market crash is coming.
Renewable energy stock
Renewable energy is a great long-term growth industry. Plus, it’s considerably defensive. Northland Power is one of the best stocks in the industry, offering investors rapid growth.
Since the market bottomed in March, the stock is up 110% and is even up 60% year-to-date. It’s continuously hitting all-time highs lately as investors recognize the sheer quality of Northland’s operations.
This is the perfect stock for investors to buy today. Over the long term, it will offer you huge growth, but in the short term, it will offer substantial defence.
Residential real estate stock
Residential real estate is another highly defensive industry to invest in, which is why investors can be confident owning a stock like Canadian Apartment Properties REIT.
Similar to Northland, in addition to it being defensive, the stock is also an attractive growth option.
Over the last few years, CAPREIT has had some impressive growth. This growth led the stock to double over the last five years, before the pandemic sent it plummeting. However, the fall in price has given investors a major bargain. So at these prices, a resilient fund like CAPREIT is a no-brainer buy.
Consumer staple stock
Another defensive industry to consider is the consumer staple industry, and one of the top consumer staple stocks on the TSX this year has been North West Company Inc.
Over the last few years, the company has been integrating its business, selling off non-core assets, and improving its operations. This work has gone a long way, and the company has proved it through the pandemic, massively increasing its earnings.
That’s part of the reason why the stock increased its dividend last quarter by 9%. It’s also why the stock is up more than 30% year to date, despite falling 40% during the initial selloff in March.
The company’s one of the most attractive dividend aristocrats and a perfect stock for risk-averse investors.
Blue-chip TSX stock
Another strategy you could take is to buy a big blue-chip stock such as BCE Inc.
A stock the size of BCE that operates in an essential industry, continues to grow, and generates the massive amounts of cash flow BCE does gives it a tonne of safety. That’s why BCE is considerably less volatile than many other TSX stocks.
BCE is being slightly impacted by the pandemic, but it’s not that significant, and it’s all very temporary. More importantly, management is focusing on making sure that this is just a small blip on earnings and doesn’t affect the company’s long-term growth plans.
So while the stock doesn’t offer huge growth potential during the pandemic, long-term with the continued growth in the industry and the introduction of 5G, BCE will be a top stock to have in the core of your portfolio.
TSX gold stock
Finally, if you want some safety, you could also consider gold. Gold is commonly known as a safe-haven asset. So if you think there may be trouble on the horizon, you could consider investing in gold stocks.
One of the top ways to achieve that safety is through a gold ETF like the iShares S&P/TSX Global Gold Index ETF. The fund gives investors exposure to several gold stocks, which reduces risk considerably. This makes it an ideal TSX stock for our current environment.
Plus, gold stocks offer some of the biggest growth potential.
