A market crash is defined as a sudden drop in market prices. There isn’t really a certain amount that the market needs to dip in order for it to be labelled a crash. However, when the market falls by 20% or more, that’s what’s known as a bear market. These events can be very scary for inexperienced investors; however, it’s important to remember that market crashes and bear markets are normal occurrences. Instead of fearing them, investors should look at them as excellent buying opportunities.
In this article, I’ll discuss three stocks that I own and would buy more of if the stock market crashes.
My top TSX pick
If I could only invest in one TSX growth stock, it would be Shopify (TSX: SHOP)(NYSE:SHOP). I welcome any stock market crash as a reason to buy more shares of Shopify stock. The reason this company interests me so much is because of its leadership position within the global e-commerce industry. As consumers continue to shift towards online shopping, merchants will want to optimize their online stores. For many, including some of the largest companies in the world, Shopify is the go-to platform.
In the second quarter (Q2) of 2022, Shopify reported US$1.3 billion in revenue. That represents a 16% year-over-year (YoY) increase. This increase in Shopify’s revenue is mostly driven by recurring revenue sources. Looking at its monthly recurring revenue, investors can see a 35% compound annual growth rate (CAGR) over the past five years. There has been a lot of talk lately about Shopify’s slowing growth rates. However, by all metrics, the company appears to still be growing at a decent rate.
I’d buy more shares of this company
Bank of Nova Scotia (TSX: BNS)(NYSE: BNS) is the next stock that I would buy if the market crashed tomorrow. This is one of Canada’s largest banks, in terms of assets under management, revenue, and market cap. In my opinion, Bank of Nova Scotia stands out from its peers due to its focus on international growth. A bona fide competitor in the Pacific Alliance, it’s projected that the region could see more growth than the North American economy in the coming years due to a rapidly growing middle class.
Bank of Nova Scotia is also notable for its strong dividend history. The company has paid shareholders a dividend in each of the past 189 years. By buying shares when the stock trades at a discount, investors could take advantage of a temporarily higher dividend yield. That could help you generate a solid source of passive income.
My favourite stock in the world
Finally, I would buy more shares of Sea Limited (NYSE: SE). Operating in the e-sports, e-commerce, and digital payment industries, Sea Limited is well positioned to succeed in the future. Of those three business segments, Shopee, its e-commerce segment is what interests me the most. Already the largest e-commerce marketplace in southeast Asia, Shopee has managed to penetrate the North and South American and European retail industries.
In Q2 2022, Sea Limited reported US$2.9 billion in revenue. That represents a 29% YoY increase. This revenue was largely driven by growth in its e-commerce segment, which saw a 51.4% YoY increase. If there’s only one stock that I could invest in, or buy during a market crash, it would be Sea Limited. This company excites me more than any other.
