The Canadian stock market has been enjoying a strong bull run through the first half of 2021. The S&P/TSX Composite Index is up by an impressive 14.45% at writing on a year-to-date basis. Despite minor hiccups, we are looking at a good stock market outlook to ride out the rest of the year.
Despite the market trading near all-time highs, it would be wise to put your investment capital to work. The reopening economy could lead to an economic boost that could allow the bull run to continue its momentum through the next year. If you are bullish on the economic recovery and have the investment capital right now, I will discuss three top stocks that you should have on your radar to capitalize on this bull market.
Constellation Software (TSX:CSU) has been a top performer on the stock market for the last 10 years. Constellation Software shares are up by almost 3,700% since 2011. The broader Canadian stock market barely scratched out 50% gains in the same period. The company caters to clients across several industries.
Constellation Software’s management has also executed a successful mergers-and-acquisitions strategy to boost its growth. Constellation Software has established itself as a reliable growth stock in all market conditions by buying out smaller companies in niche markets worldwide.
Trading for $1,897 per share at writing, it is not the cheapest stock you can buy, but it could be well worth the cost for all the potential returns.
Brookfield Asset Management
Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) is a Canadian stock that offers substantial diversification within a single asset. The asset management company gives its investors exposure to various diversified investments across different industries throughout the world.
Despite its diversification, Brookfield Asset Management has consistently provided its investors with market-beating returns. At writing, the stock is up by almost 26% on a year-to-date basis. At its current valuation, Brookfield Asset Management is up by over 560% since January 2010. The stock has been a market-beating asset ever since its debut on the stock market just over two decades ago.
Trading for $63.06 per share at writing, the stock could be an ideal investment for any investor looking to capitalize on the strong market with a consistent market-beating asset.
Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is another stock that should be on your radar if it is not already a part of your investment portfolio. The Canadian Big Six banks are not typically considered to be growth drivers for the stock market. However, this year has painted a completely different picture for the Canadian financial institutions, despite a low-interest-rate environment.
Most of the Canadian banks allocated substantial funds to their provisions for credit losses amid fears of higher loan default rates due to the pandemic in 2020. Fortunately, the government’s efforts to pump liquidity into the economy paid off, leaving Canadian banks with substantial excess funds.
TD Bank also derives a substantial chunk from its operations in the United States. With most of its operations on the east coast, the U.S. market could become a growth driver for the stock over the next decade. Trading for $83.75 per share at writing, TD stock could be a steal for your portfolio right now.
The current bull market run is coming into focus with the economic reopening backdrop in full swing. Finding assets that can leverage the market conditions to provide substantial returns is ideal if you are looking to capitalize on the solid run in the stock market. Constellation Software stock, Brookfield Asset Management stock, and Toronto-Dominion Bank stock could be ideal investments for this purpose.
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 owns shares of and recommends Brookfield Asset Management and Constellation Software. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV.