After the year we had in 2022, it’s normal to feel a little hesitant to be investing in the stock market right now. Canadian investors witnessed massive selloffs across the TSX last year, quickly evaporating gains that were generated in the year prior.
Despite the S&P/TSX Composite Index getting off to a hot start to the year, there’s still no shortage of short-term uncertainty for investors. High inflation and interest rates will likely continue to be a topic of discussion — at least until they both return to pre-pandemic levels. Until then, I’m banking on volatility to continue wreaking havoc, as it has been since early 2022.
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Investing during today’s uncertain market conditions
While the next few months may look bleak, investors with long-term horizons shouldn’t overlook the opportunities that are available right now. Even with the recent surge in January, there are still lots of high-quality stocks on the TSX trading at rare discounts today.
Volatility may continue to be present for the foreseeable future but some of these discounted prices may not be around for much longer. As a result, if you’ve got some extra cash to spare, along with a long-term time horizon, now could be a very wise time to be putting money into the stock market.
With that said, I’ve reviewed two top stocks that long-term investors should have on their watch lists.
TSX stock #1: Brookfield Renewable Partners
It’s been more than two years since Brookfield Renewable Partners (TSX: BEP.UN) has been trading at an all-time high. The energy stock has been trading mostly downwards since the beginning of 2021. It was shaping up to be a positive year in 2022 until shares began selling off in the fourth quarter (Q4), putting the stock down now more than 20% over the past six months.
As a long-term investor myself who also owns shares of Brookfield Renewable Partners, I added to my position several times last year. It’s been a rough two past years for the stock, but the business itself remains in excellent shape and the long-term growth potential is as strong as its ever been, with demand for renewable energy only expected to continue growing.
Even with the poor performance since 2021, shares are still up a market-beating 75% over the past five years. That’s good enough for more than doubling the returns of the broader Canadian stock market. And that’s not even including Brookfield Renewable Partners’s impressive dividend that’s currently yielding just shy of 5% either.
TSX stock #2: Kinaxis
The tech sector was amongst the hardest-hit areas of the stock market in 2022. Unprofitable high-growth tech companies saw share prices get slashed as interest rates shot up.
With a loss of less than 20% last year, Kinaxis (TSX: KXS) managed to fare better than many of its tech peers. Shares are still down more than 30% from all-time highs but I don’t think it will be long before the stock is back to its market-beating ways. Despite the recent selloff, though, shares are still up 80% over the past five years.
As a $4 billion company that provides supply chain management software, Kinaxis understandably often flies under the radar of investors. But with the returns that the stock has put up in recent years, growth investors may want to take a closer look at this tech company, especially at this price.
