Considering the uncertainty plaguing the economy today, it is difficult to anticipate any short-term movement in the stock market. With persistent inflation and high interest rates, many people are worried about a recession around the corner. With the shutdown of two banks across the border, many believe it might already be happening.
However, there is a realistic possibility that the worst of the economic crunch might be behind us. Even if the market looks like it is in for a prolonged bull run, it is essential to be careful with how you invest your money. If you have an interest in investing in the stock market for short-term returns, the uncertainty can make it very difficult to identify high-quality investments with the potential to deliver safe returns.
Canadians with a longer investment horizon might still have better options to consider in the stock market right now. Today, I will discuss two TSX stocks that you can buy, regardless of economic circumstances, especially during market corrections.
Northland Power
Northland Power (TSX:NPI) is a stock to consider to gain exposure to the renewable energy industry at a bargain. The $8.44 billion market capitalization company headquartered in Toronto develops, constructs, and operates an internationally diversified portfolio of renewable energy infrastructure assets.
As of this writing, Northland Power stock trades for $33.68 per share — down by over 33% from its all-time high in January 2021.
While it might not be the most defensive investment in the stock market, it undoubtedly boasts substantial long-term growth potential. The future of the energy industry is green and clean, and Northland Power is a stock you can own to capitalize on it.
At current levels, Northland Power stock pays its shareholders their dividends on a quarterly schedule, with a 3.56% dividend yield. It can be an excellent investment for dividend income and long-term capital growth.
Royal Bank of Canada
When it comes to long-term reliability, Canadian bank stocks are right up there at the top of the TSX. Royal Bank of Canada (TSX:RY) is the industry leader, standing at a massive $181.93 billion market capitalization.
While the recent situation with the Silicon Valley Bank in the U.S., many might have anticipated RBC to make a bid to acquire it. However, the Canadian financial giant currently has no such plans.
The largest among its peers in the Big Six Canadian banks, its wealth and commercial management segment continues to perform well.
The Canadian giant is also entering several emerging markets to create more growth for decades to come. As of this writing, Royal Bank of Canada stock trades for $131.27 per share. At these levels, it boasts a juicy 4.02% dividend yield that it pays out to its investors on a quarterly schedule.
Foolish takeaway
It is essential to understand that investing in the stock market is inherently risky. Even if you invest in industry-leading TSX stocks, market volatility can impact your short-term returns. By identifying high-quality stocks capable of weathering the storm of a recession and with strong long-term growth potential, you can put your investment capital to better use.
To this end, Northland Power and Royal Bank of Canada stock could be excellent investments to consider for your self-directed portfolio.
