Save your TFSA (Tax-Free Savings Account) for the stocks you think will do best over the long haul. Undoubtedly, the market tides will always get rough for some reason or another. As a self-guided TFSA investor, it’s important that you don’t react to negative market-moving news after the fact. Instead, it can pay dividends to think like a true contrarian.
As the so-called September slump continues (the broader S&P 500 fell 0.6% on Tuesday), it may be a wise idea to revisit your stock watchlist to see if any names are approaching a level you’d be willing to buy at.
Indeed, it’s times like this, when stocks are quickly on the retreat over a wide range of news events (think climbing rates on the 10-year U.S. Treasury note), that you can stretch your investment dollar that much further.
So, without further ado, let’s consider two undervalued TSX stocks that are suitable for retirees as well as younger investors.
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Brookfield Corp.
Brookfield Corp. (TSX: BN) is still a great one-stop shop for alternative asset exposure. Undoubtedly, the Brookfield spin-off (BAM.A spun off into BN and BAM) may have been a bit confusing to those who didn’t keep up with the firm last year. Still, Brookfield Corp. is the play that most fans of the original Brookfield (BAM.A) should continue to love.
At writing, shares of BN are in recovery mode after a painful 2022 plunge. With shares down around 25% from their all-time highs, I view any September turbulence as an opportunity to snag shares of one of the best-run alternative asset managers on the planet at an even larger discount.
The stock goes for 11.1 times forward price-to-earnings, and though a recession may present itself over the coming quarters, I still think Brookfield Corp. is cheap enough to continue its relief rally. Further, demand for cash-generative alternative assets could continue to sail higher, especially if stocks and bonds are due for another year of pain.
Canadian Tire
Up next, we have Canadian Tire (TSX: CTC.A), a venerable Canadian retailer that’s sporting a dividend yield on the higher end of the historical range. Indeed, shares yield almost 4.5% after the latest spill in the stock.
Though consumer-spending headwinds will make it hard for CTC.A stock to rally in a potential recession, I still think some chance of a soft-landing type of recession is already baked in at current prices. The stock is pretty much where it was five years ago, in the mid-$150 range.
With a mere 11 times trailing price-to-earnings multiple, and a steady loyalty program in place, I view Canadian Tire as a resilient discretionary retailer that’s bound to recover once recession fears are, in due time, put to rest.
