The stock market has had a rollercoaster of a year throughout 2020. The initial sell-off frenzy sent the whole thing crashing between February and March, only for the markets to rebound in the next few months.
The stock market has performed relatively well under the circumstances. There is still a lot of uncertainty, but there is an air of relative positivity concerning lockdowns. The rollout of a vaccine could also spell better news for the economy. Despite the positive news and trends in the stock market, its recent rallies could be living on borrowed time.
Investors need to be ready for a second market crash, and one that could possibly be worse than the one that we saw in March. With the housing market in a growing bubble and chances of another stock market crash, it would be wise to take protective measures for your cash.
I will discuss two stocks on the TSX that you can consider investing in to park your capital and watch it grow despite a market crash next year.
Fortis Inc. (TSX:FTS)(NYSE:FTS) is a staple investment for shareholders with portfolios to achieve various short- and long-term financial goals. Fortis is a pillar of stability for investment portfolios because the underlying company can virtually guarantee safety and reliability for its investors.
Fortis is a Canadian utility company that provides its services to customers in Canada, the US, and the Caribbean. No matter how bad the economy gets, Fortis can continue generating solid cash flows because people always need their utilities. Fortis also earns almost its entire income through highly regulated and contracted sources.
It means that Fortis’ has predictable cash flows that it can use to continue funding its growing dividend payouts to its shareholders.
With the increasing awareness of healthy living, big pharma is doing well. Jamieson Wellness (TSX:JWEL) is not precisely a healthcare stock. However, it is making it big during the pandemic. The vitamins maker has become significantly popular amid the pandemic. As people become more aware of the need for products made by companies like Jamieson Wellness, its value has substantially increased.
Jamieson Wellness’ valuation has increased by 53% from the March 2020 market bottom, indicating its popularity among investors. At its current valuation, the stock’s share prices have doubled from five years ago. Jamieson Wellness has a long way to go in terms of the growth it offers.
The stock also offers a low but reliable 1.37% dividend yield that you can rely on to grow your account balance.
Despite all the positive news, there are underlying factors that are ringing alarm bells among investors and analysts. Warren Buffett believes that you could be paying too much for stocks right now. It is a strong indicator that we could be in for a major market crash very soon.
If you feel that there is a strong possibility of a market crash, you should consider reallocating your capital to safer investments. Fortis and Jamieson Wellness could be excellent places to park some of your capital for safety amid a market crash.
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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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC.