When it comes to your Tax-Free Savings Account (TFSA) retirement fund, you should seek to make smart investments that will maximize returns over the long run relative to the risks. Of course, you should always consider the risks you’ll take before making any investment decision.
Higher reward typically comes at the cost of higher risk. And if you’re a new investor, you may not yet have a good gauge of your personal risk tolerance. It’s different for everyone. Not everyone is comfortable with a 2-3% move in either direction on any given day.
Though many investors view volatility as risk, I think investors should view risk as the potential for an investment to yield irrecoverable losses. Indeed, Peloton stock, I believe, is a prime example of a risky name that probably won’t be headed to its all-time high anytime soon. Those who bought at the peak (shares have since crashed more than 95%) are highly unlikely to recover anytime soon or perhaps ever.
As an investor, you should invest wisely and forego the hot stock that young investors have been piling into. Momentum parties seldom last forever. When they go bust, a lot of new investors stand to lose considerable sums.
In this piece, we’ll focus on three great TSX stocks that appear to offer a good value for money. Each name has been through quite a tumble. As it stands today, each stock seems too unloved.
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Cargojet
Cargojet (TSX: CJT) is cargo airline that cooled off in a massive way over the past two years. The stock has lost around 55% of its value. With no signs of slowing negative momentum, it seems like Cargojet stock could still have a great deal to lose, as it flies into recession storm clouds.
Personally, I think the damage is excessive. Cargojet is still a great company that’s on the right side of a secular tailwind in e-commerce. Further, the $1.8 billion firm could have quite the explosive run once the recession ends and consumers begin splurging online again.
When the consumers are ready to shop, Cargojet will be ready to offer its services. Until then, investors may wish to average down over time, as there’s no sign that the historic slump is over.
Sleep Country Canada Holdings
Sleep Country Canada Holdings (TSX: ZZZ) stock is off around 38% from its all-time high. At around 9.15 times trailing price to earnings (P/E), a recession seems partially (or mostly) factored in. The dividend yield has also swelled past 3.6%. The mattress and sleep products retailer may not be the most attractive discretionary bet, but it’s one that could enjoy a considerable amount of relief on the other side of a recession.
For now, the stock’s dividend seems bountiful enough to collect and wait for TFSA income investors willing to buy and forget.
Canada Goose Holdings
Canada Goose Holdings (TSX: GOOS) stock has crashed around 75% from its 2018 all-time high of nearly $90 per share. The high-end luxury parka maker may not see sales surge, as the summertime heats up while consumer wallets feel the hit of inflation. Still, I’m a fan of the company’s global growth runway.
In China, the Canada Goose brand is picking up traction. As the company grows beyond outerwear, I see some opportunity to drive sales from its loyal customer base. For now, there seem to be no catalysts for the Goose. Though untimely, I still think the stock is worthy of nibbling for a long-term TFSA.
