The stock market volatility has increased immensely in the last couple of months with uncertainty about its short-term direction. While such market conditions may very well confuse investors, they should always stick to some quality stocks that are not worth selling, despite these market uncertainties.
Although it’s important to add some fundamentally strong stocks to your portfolio, the importance of holding them for the long term can’t be underestimated to build wealth from stock investing. In this article, I’ll highlight three top TSX stocks I’d never sell, irrespective of short-term market fears.
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Enbridge stock
After posting 16.5% gains in the first quarter, shares of Enbridge (TSX: ENB)(NYSE: ENB) dived by 5.5% in the second quarter due mainly to a selloff across the energy sector with rising fears of a potential recession. However, it might not be a wise decision for long-term investors to sell quality TSX stocks like ENB, as they have enough financial strength to remain profitable, even in tough economic times.
Enbridge primarily focuses on providing energy transportation services through its wide liquids and gas transmission network. Despite facing COVID-19 challenges, its adjusted earnings rose by 21% between 2021 in 2016. During the same period, its total revenue also jumped by 36% as the demand for energy products remained strong. While fears of a near-term economic slowdown might hurt the short-term outlook for oil and gas, the long-term outlook remains strong with the projected expansion of the global economy in the next decade. Also, Enbridge has a very attractive dividend yield of around 6.1%, which could keep rewarding investors, even in tough economic times.
Royal Bank of Canada stock
Another great TSX stock that I wouldn’t sell irrespective of market volatility is Royal Bank of Canada (TSX: RY)(NYSE: RY). Apart from being the largest Canadian bank, it’s also the largest TSX Composite component based on its market cap of around $173.6 billion at the moment.
Royal Bank has a robust balance sheet and prudent risk management to survive a recession. After facing several operational challenges during the COVID period in its fiscal year 2020, the bank posted a spectacular financial recovery in its fiscal year 2021, as its adjusted earnings jumped by 40.4% year over year to around $11.19 per share. While an economic slowdown may hurt its short-term outlook, its long-term financial growth outlook remains strong with the help of its well-diversified business model, large scale, and continued investments in new tech and innovations. In addition, Royal Bank also has a decent dividend yield of around 4.2% right now, which should help investors keep getting stable income, even if the short-term economic concerns take its stock downward for a few quarters.
Shopify stock
Shopify (TSX: SHOP)(NYSE:SHOP) is neither a dividend-paying stock, nor does it have a decades-long track record of consistent financial growth like Enbridge and Royal Bank. Nonetheless, I’d still avoid selling Shopify stock amid the ongoing market chaos, as I expect the digital commerce boom to continue despite short-term challenges, which should help this technology company continue growing in the long run.
Despite its 77% year-to-date losses, Shopify has still yielded more than 300% returns for its loyal investors in the last five years. I expect the Canadian e-commerce giant to continue to surprise the market by posting much better-than-expected financial growth in the coming years with the help of strong demand for its innovative and easy-to-use e-commerce solutions. These factors should fuel a sharp recovery in this TSX stock in the coming years. That’s why selling it due to short-term fears doesn’t make sense.
