Are you finished your holiday shopping yet? Don’t worry, neither has most of the country. In the past, most people tend to be last minute when it comes to holiday shopping, yet this year, it’s true: things are different.
In fact, Canada Post urged Canadians back in October to get their holiday shopping done sooner as opposed to later. The business has already been swamped with an increase in e-commerce demand, and that’s with the holidays taken into consideration.
It’s true that most Canadians believed they would do a lot more online shopping, and it’s why many companies started offering earlier deals, extending Black Friday to a week in some cases. So, what will the Santa Claus Rally look like this year? And what are some stocks to invest in to take advantage?
Santa Claus what?
The Santa Claus Rally usually happens in the last few weeks of December and into January. It comes as consumers look to get their last-minute shopping done for the holidays but also as Boxing Day promises even more deals. But the stock market sees a jump for a number of pretty fluid reasons. It could be that people have their holiday bonus to invest. It could be investors settling their books before taking time off. Or it could be just general optimism about the new year.
Whatever the case, it exists. You can see the general trend to go up at the last few weeks of the year. Even now, in a world of such volatility, we see stocks continue to rise, as the year comes to an end. If there was any time for optimism about a new year, it’s now.
Stocks to consider
If you want to take advantage of the Santa Claus rally in the last few weeks of the year, you can enter the new year on a high note. I would consider strong stocks to see you throughout this year and potential future market crashes. Again, we’re in a volatile world that has a lot of debt to pay down. So, arming yourself while you have cash at the end of the year is never a bad thing.
The banking industry is a great place to start. Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) in particular is great, as it offers the highest dividend yield of the Big Six banks. But it’s also expanding into the U.S., meaning you are likely to see a strong increase in revenue as the U.S. and Canada rebounds. Banks are also the ones that will likely be on the rebound first after a market downturn, making this a great option to consider.
Another strong choice is the shipping industry. Cargojet (TSX:CJT) saw a huge boost from e-commerce sales, and this will likely continue for years to come, as it continues its partnership with Amazon. In fact, Amazon will likely see a huge increase over the holidays, and Cargojet will definitely see an increase from this as well. As e-commerce continues to grow both during and after the pandemic, Cargojet will remain a solid investment choice.
But then there’s healthcare, and CloudMD Software & Services (TSXV:DOC) is a great option to support during the new world. The company’s virtual healthcare services will continue to be a necessity now and years from now. It continues to acquire more virtual healthcare services, creating a diverse range of services for patients to use. The company remains cheap, but likely won’t be by the end of next year. So, now is a great chance to pick it up.
Still worried about cash this year? Motley Fool experts are doubling down on these stocks!
Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.
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.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Amy Legate-Wolfe owns shares of CARGOJET INC. David Gardner owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and CARGOJET INC and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.