January was a pretty solid month for investors who stood by markets in their moment of wobbliness. Indeed, many Tax-Free Savings Account (TFSA) investors are likely wondering if they should put their latest $6,500 contribution to work while markets are showing signs of bullish behaviour. On the flip side, we could be in the midst of a short-lived bear bounce, in which case it’d be better to temper one’s enthusiasm amid January’s remarkable pop.
Though I don’t doubt the sustainability of last month’s gains, I think it’s wise to start thinking about dollar-cost averaging (DCA) into new positions. That way, you won’t be shocked if markets turn south once again. At the end of the day, timing Mr. Market’s next move is impossible. That’s why it’s a good idea to take the timing out of the equation by committing to partial purchases over time.
Buying the dip in 2023: Don’t exhaust your liquidity all at once!
Dip-buying isn’t getting the same quick rewards it used to. Regardless, investors need to be focused on the next three years rather than the next three weeks or months! 2022 was a year that saw speculators get crushed, as hyper-growth plays with extended valuations took the biggest plunge since the dot-com bust of 2000. 2023 could see a recession and the return of sound long-term investing.
Indeed, 2022 was a lesson for many new investors. Investing isn’t easy and it certainly shouldn’t be fun. At the end of the day, investing is about trying to maximize your returns relative to risks over the time horizon you’re looking to build wealth over. The odd bear market isn’t such a big day if you’ve got your focus set on your longer-term horizon.
Even with such a mindset, it’s tough to brave the market wreckage with all the negativity on television. In any case, here are one intriguing growth stock I’d look to buy with an extra $1,000 in February. Though I’m not against ploughing the entirety of your 2023 TFSA contribution in one go, I think averaging down is a good move for those investors who don’t have considerable liquidity.
By inching in, you’ll ensure you won’t be left empty-handed should the bear’s roar return to Wall and Bay Street!
When it comes to growth plays, it’s especially important to ensure you’ve got liquidity to keep taking advantage of the bargains as they appear. Without further ado, consider Docebo (TSX:DCBO).
Docebo: A Canadian AI stock that could have a comeback year in 2023
Docebo was a huge pandemic winner that shed a considerable amount of its value last year. From peak to trough, shares lost more than 72%. Though shares have been marching higher in recent months, investors must be ready for anything when it comes to the artificial intelligence (AI) leveraging LMS (Learning Management System) software developer.
With AI in the spotlight over the hype surrounding OpenAI’s ChatGPT, I’d argue that now’s a great time to take a step back to consider the many firms that are harnessing the power of AI to help firms maximize productivity. Sure, the work-from-home trend has cooled, but Docebo remains an innovative firm that could continue to win big clients through 2023.
Docebo’s a hard stock to value amid rising rates. That’s why I think the name is a prime candidate for a dollar-cost averaging approach. If you’re a young investor, Docebo is one tech stock to watch, as the growth trade looks to climb higher.