3 Stocks to Hold During a Volatile Market

Are you wondering which stocks you should be holding right now? Here are three top picks!

| More on:
Illustration of bull and bear

Image source: Getty Images.

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Through much of this year, the stock market has been very volatile. As a result, many investors have started to question the positions they hold in their portfolios. I believe investors should do their best to stomach this volatility. However, it wouldn’t be a bad idea to think about what kinds of stocks would be best to hold during times like this. In this article, I’ll discuss three stocks you should consider holding during a volatile market.

Which stocks could prosper in this environment?

The first question investors should ask is, “What’s causing this volatility?” Although there could be more than one correct answer, investors should be able to identify at least one of these drivers. For instance, interest rate hikes may be contributing to the current market volatility. Historically, bank stocks have performed very well in high-interest environments. Because of this, I believe investors should consider adding bank stocks to their portfolio.

Of the Big Five Canadian banks, Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is my top pick. The company has a very diversified business, which could help it withstand prolonged periods of economic uncertainty. It’s also an excellent dividend stock, which makes it even more attractive during turbulent market periods. If you’re looking for one stock to add to your portfolio today, I would suggest considering Bank of Nova Scotia.

Buy utility stocks

Investors should also consider buying shares of utility stocks. What’s appealing about these companies is that they receive a very stable source of revenue. Because utility companies receive payments on a monthly basis, investors won’t have to worry about tracking changes on a quarter-to-quarter basis. If I had to pick one utility stock to hold in my portfolio, I would choose Fortis (TSX:FTS)(NYSE:FTS).

Like Bank of Nova Scotia, Fortis is an excellent dividend stock. It has managed to increase its dividend distribution in each of the past 47 years. That gives Fortis the second-longest active dividend-growth streak in Canada. This company operates in Canada, the United States, and the Caribbean. As long as the inhabitants of those countries continue to use gas and electric utilities, Fortis should be a reliable stock to hold in your portfolio.

Look for other recession-proof companies

The utility industry is known for hosting many recession-proof companies. These are defined as companies that don’t tend to see any major disruptions during recessions. However, there are many other areas that host companies with that same characteristic. For example, consider Waste Connections (TSX:WCN)(NYSE:WCN).

A solid waste services company, Waste Connections should continue to be relied upon regardless of what the economy looks like. Another great dividend stock, Waste Connections has managed to increase its dividend in each of the past 11 years. Importantly, Waste Connections maintains a dividend-payout ratio of 35.7%. That suggests that the company could continue to comfortably increase its dividend over the coming years.

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 Jed Lloren has positions in BANK OF NOVA SCOTIA. The Motley Fool recommends BANK OF NOVA SCOTIA and FORTIS INC.

More on Stocks for Beginners

potted green plant grows up in arrow shape
Stocks for Beginners

1 Canadian Growth Stock That Could Double Your Money in an Economic Recovery

The market downturn is an opportunity to lock growth during the economic recovery. This stock is a blend of value,…

Read more »

edit Safe pig, protect money
Stocks for Beginners

2 Safe TSX Stocks for Beginners to Buy in a Market Correction

These two TSX stocks are still solid long-term buys today, despite the recent market correction.

Read more »

Human Hand Placing A Coin On Increasing Coin Stacks In Front Of House
Stocks for Beginners

3 Real Estate Stocks to Buy for Terrified Investors

Motley Fool investors shouldn't be afraid of investing in real estate if they have a long-term growth strategy, but these…

Read more »

Value for money
Stocks for Beginners

Market Correction: A New List of Value Stocks Just for You

The 2022 stock market has been bearish, with tech stocks being the biggest losers. But tables are turning. It's time…

Read more »

Knowledge concept with quote written on wooden blocks
Stocks for Beginners

3 Reasons Why Inflation Impacts Canadian Stocks

Here are the three most common ways inflation impacts Canadian stocks, why they're selling off, and when you'll want to…

Read more »

Growth from coins
Stocks for Beginners

2 Growth Stocks New Investors Can Buy on the Dip Today

After the recent market correction, many growth stocks look cheap, making it a perfect time for stock market beginners to…

Read more »

Make a choice, path to success, sign
Stocks for Beginners

3 Reasons Cineplex Stock Is a Better Buy Than Air Canada

Although both Air Canada and Cineplex stock are ultra-cheap, here's why the entertainment company is a much better investment.

Read more »

stock data
Stocks for Beginners

Where to Invest $5,000 Amid the Market Selloff

Can you afford to invest $5,000 in stocks right now? If yes, you must consider buying these dirt-cheap stocks amid…

Read more »