Worried About the Stock Market? 3 Companies to Buy and Hold for the Long Term

Here are three Canadian stocks that you can feel good about buying, regardless of the market’s condition.

Nicholas Dobroruka

Nik has been writing for The Motley Fool Canada since 2020. After studying marketing at University in his hometown of Montréal, Nik decided to pack up and move west to Vancouver. By day, Nik is a digital media ninja, specializing in Programmatic advertising. By night, you can find him either Mountain biking in Vancouver’s famous North Shore trails or writing for TMF Canada. Tech, digital payments, and renewable energy are three areas that Nik enjoys following and writing about.

Published November 25, 2022 9:00 am EST

It’s been hard to keep up with the sentiment in the stock market this year. Two weeks ago, stocks soared after U.S. inflation numbers came in lower than expected. But those that have been invested in 2022 know all too well that a sudden market drop is never far away.

We’ve witnessed all kinds of volatility this year. Surprisingly, though, the S&P/TSX Composite Index is down only about 5% on the year. Major U.S. indices have fared far worse than that in 2022.

While the Canadian stock market as a whole may only be down 5%, many TSX stocks are down much more than that. And it’s not only high-priced growth stocks that are trading at bargain prices. We’ve seen market leaders across all kinds of different industries this year drop well below all-time highs.

Investor wonders if it's safe to buy stocks now — Source: Getty Images

Now’s not the time to be on the sidelines

Despite the positive news of slowing inflation, I’m not expecting volatility to slow down just yet. Both interest rates and inflation remain sky-high, creating plenty of short-term uncertainty in the stock market.

While uncertainty may be high, now could be an incredibly opportunistic time for those with a long-term time horizon to be investing. Canadian investors have the opportunity to load up on high-quality businesses that are trading at rare discounts.

Here are three discounted Canadian stocks at the top of my watch list right now.

Brookfield Asset Management

It’s never a bad time to be investing in Brookfield Asset Management (TSX:BAM.A). The $95 billion company is a global asset manager that boasts a wide-ranging portfolio of investments.

Even as diversified as Brookfield Asset Management is, the company is no stranger to delivering market-beating gains. Shares have more than doubled the Canadian stock market’s returns over the past five years.

Investors looking to add some diversification to their portfolio should have this top Canadian stock on their radar.

Constellation Software

While many tech stocks have plummeted this year, Constellation Software (TSX:CSU) has fared impressively well. The Canadian tech stalwart is just about on par with the Canadian market’s return in 2022.

Long gone are the days of multi-bagger gains, as Constellation Software is now a nearly $50 billion tech giant. Still, shares are up more than 150% over the past five years, easily outpacing the Canadian market’s returns.

Growth investors wary of adding more risk to their portfolios in today’s volatile market conditions may be interested in this dependable tech stock.

Sun Life

Last on my list is a slow-growing, but dependable, insurance stock. There’s not a whole lot to get excited about with Sun Life (TSX:SLF); I won’t argue that. But in times of uncertainty, like what we’re dealing with today, it’s never a bad idea to own shares of a few dependable companies like this one.

For any investor that’s uncomfortably over-indexed towards high-risk growth stocks, they’d be wise to have Sun Life on their watch list. The stock’s defensiveness and passive income can both help balance out volatility in the short term. And as a growth investor myself, I could sure use a little extra defensiveness right now.

At today’s stock price, Sun Life’s dividend yields just about 4.5%.