There’s been no shortage of ups and downs for Canadian investors over the past year. On the surface, it may seem as if it’s been a relatively unexciting past 12 months for those invested in the stock market. The S&P/TSX Composite Index is trading today at roughly the same price as it was in August 2022. However, there have been plenty of spikes in both directions since then.
The macro-economy has driven much of the volatility in the stock market over the past year. Both high inflation and interest rates continue to cause lots of short-term uncertainty in the economy, which is exactly what investors don’t want to see.
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Taking advantage of short-term volatility
As a long-term investor, I’m not all that worried about the stock market’s recent volatility and any short-term uncertainty. In fact, I’m treating this as an opportunity, which is exactly how I’d urge other investors with long-term horizons to view it too.
The volatility in the stock market has led to many top TSX stocks dropping to opportunistic price levels. Many stocks have dropped — not because the business is performing poorly but because of the perceived health of the Canadian economy.
Of course, there are stocks on the TSX that are trading at discounted prices due primarily to the health of the business itself. There will always be value traps to avoid. However, there are lots of proven companies that have found themselves trading at prices far below all-time highs.
Canadian investors with long-term time horizons and some cash to spare should seriously consider adding these two stocks to their watch lists in August.
TSX stock #1: goeasy
goeasy (TSX:GSY) is one company on the TSX that I’d strongly argue can attribute part of the stock’s recent poor performance to factors outside of its control.
As a consumer-facing financial service provider, it’s not surprising to see that increased interest rates have hurt demand for the company.
Shares are down close to 40% from late 2021, which is when many other Canadian growth stocks also began trending downwards. goeasy has been gaining momentum as of late, though. The stock is up more than 20% year to date, with the majority of those gains coming over the past three months.
For a stock with a market-beating track record like goeasy, this is not a company you need to think twice about buying for the long term.
TSX stock #2: Docebo
After a wild first three years on the TSX, Docebo’s (TSX:DCBO) stock price may look to be finally stabilizing.
After going public in late 2019, the tech stock managed to soar more than 700% before the start of 2022. Shares have since pulled back dramatically but are still trading more than 200% above the price when Docebo joined the TSX.
As still a relatively young tech company with lots of growth expected in the coming years, I’d be prepared for more volatility. While most investors don’t enjoy volatile market periods, it’s part of the deal of owning stocks.
For long-term investors willing to be patient, now could be an excellent time to load up on shares of this high-growth tech stock.
