There have been short-lived glimmers of bullishness over the past year, but the broader Canadian stock market does not have much to show for it. The S&P/TSX Composite Index has been on several runs of more than 5% in 2023 alone, but each time, the gains did not last for long.
Investing during volatile market periods
Volatility has certainly remained a key theme for investors this year. Many individual TSX stocks have had impressive rebound years in 2023, but the market as a whole continues to struggle to return to all-time highs, which were last set in early 2022.
While the market may be volatile today, it’s no reason for a long-term investor to be on the sidelines. The TSX remains ripe with opportunities.
If you’re looking to minimize the amount of risk and uncertainty in your portfolio, perhaps loading up growth stocks today isn’t the right strategy for you. Instead, a dependable dividend-paying company may be a better fit.
I’ve reviewed two top dividend stocks that are perfect to own during uncertain market conditions. With neither company expecting a slowdown in demand anytime soon, there’s almost never a bad time for a long-term investor to load up on these two stocks.
TSX stock #1: Brookfield Renewable Partners
Now could be an incredibly opportunistic time for long-term investors to be putting money to work in the renewable energy space. After a monster run in the second half of 2020, the sector has been on the decline since early 2021.
Those looking to gain exposure to the renewable energy sector cannot go wrong with Brookfield Renewable Partners (TSX: BEP.UN). As a global leader, the company provides instant diversification to the growing space.
Shares are down close to 40% from all-time highs. Still, the energy stock is up more than 70% over the past five years, easily outpacing the returns of the broader market. And that’s not even including dividends.
At today’s discounted stock price, Brookfield Renewable Partners’s dividend has skyrocketed to above 5%.
TSX stock #2: Fortis
Investors looking to reduce the volatility and risk in their portfolios may want to consider a utility stock. Though it’s not a very exciting space to invest in, it sure is dependable.
Steady demand levels allow Fortis’s (TSX: FTS) stock price to stay away from high levels of volatility. Regardless of the economy’s condition, demand for utilities tends to remain fairly stable.
Excluding dividends, shares are about flat on the year and have returned just about the same amount as the broader Canadian stock market has over the past five years.
What Fortis provides that a broad-market index fund cannot are low levels of volatility and a 4% dividend yield.
Foolish bottom line
Don’t let today’s volatile market conditions keep you on the sidelines. In times of uncertainty, I’d highly suggest investing in stocks that you don’t need to worry about in the short term. Focus on companies that have long-term growth potential. Knowing that, you’ll have a much easier time holding during inevitable pullbacks.
