The 3 TSX Stocks to Buy Before a Long-Term Bull Market Begins to Build

The TSX may not go bullish for a while, even when the economy recovers from a recession, but investors should keep their eye on the target and buy at just the right time.

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Until the fall of two U.S. banks, people weren’t comparing the current recession to the Great Recession of 2008, but now that the two banks have almost collapsed, it’s easy to draw positive and negative parallels.

If the recessions are similar, the positive trend would be the recovery afterward and an almost decade-long bull market. Investors that believe that the market will go bullish and will remain so (after we get past the current recession) should have the three following stocks on their radar.

A private equity firm

Alaris Equity Partners (TSX:AD.UN) is the kind of firm that businesses look for when they need a capital injection to remain financially viable. Alaris stands out from other equity companies that bail out financially distressed businesses with capital injection for a share of the company.

That’s because it only seeks financial returns and doesn’t assume control of the businesses it invests in. This makes it ideal for businesses that seek financial assistance but have no managerial interference.

The business model is ideally positioned to thrive right after a recession when many businesses are financially distressed, and it can pick and choose the right investments. Whether that was the catalyst or not, the company soared after the last recession — 600% growth in fewer than four years.

If there is a chance of it happening again, you should consider buying it now and lock in the compelling 8% yield while you wait for the growth to start.

An airline

Canadian investors are still wary of Air Canada (TSX:AC) stock, which is reflected in its three-year-long slump, which is becoming worse over time. The stock is currently trading at $18 per share, and considering its current trajectory, it may fall further. A weak economy and fears of a recession discourage people from discretionary spending like traveling, which directly impacts Air Canada’s business.

However, this may change once the recession is over and the economy starts getting stronger. More people traveling and booking flights may not fix the company’s financial problems right away, but it may inject enough hope into the market to prop the stock up.

At its heavily discounted price, the stock can easily double your capital by just reaching a price tag of $40 per share, which is far lower than its pre-pandemic peak.

A professional services company

Colliers International Group (TSX:CIGI) might not require a market-wide bullish phase to go up. The stock has been a decent grower for a long time and returned roughly 300% to its investors in the last decade through price appreciation alone. However, since it’s tied to the real estate sector, it has fallen under the combined weight of that association and is a weak market (by about 26%).

It may start recovering before the market if real estate increases. However, a bullish TSX will definitely augment its recovery/growth. Thanks to its long-term growth potential, you can keep this stock for years and not just till the end of the upcoming recovery trend.

Foolish takeaway

The three Canadian stocks from different sectors and business domains can help you leverage a bull market that may follow the current recession. However, not all of them may remain bullish over the same period. Some may experience a reversal of the trend in the next couple of years, while others may keep going up for over a decade.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Alaris Equity Partners Income Trust and Colliers International Group. The Motley Fool has a disclosure policy.

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