If you’ve got an extra $1,000 in your TFSA (Tax-Free Savings Account), it may be time to put it to work now that the broader markets are in retreat mode for September. Undoubtedly, September gets a bad rap when it comes to stocks. But don’t dismiss the month quite yet, as shares could even come soaring out of the gate in the final trading week of the month and the third quarter.
Remember, the S&P 500 has been incredibly hot this summer. A late-summer cooldown isn’t just to be expected; it’s needed if the bull market is to continue going strong for months (or even years) to come. Personally, a correction is a good thing for investors who don’t need to hit that sell button or prove themselves to clients. As a self-guided investor, this recent wave of volatility is nothing more than an opportunity to nab a few shares of companies on sale.
As growth continues taking the brunt of the damage as rates keep creeping higher, I’d strongly consider adding to the following fine growth darlings on weakness.
Shopify
Shopify (TSX: SHOP) is arguably Canada’s most innovative tech stock. Last year was a nightmare for many SHOP stock shareholders, as the name just kept tumbling lower and lower by the week.
This year has been about relief. And though it’s been a strong run, even after the September slump, investors should be prepared for huge swoons. Last Thursday, the stock got slammed, shedding well over 5% of its value, and for no good reason. It was an ugly day but one that opportunistic investors should take advantage of.
At $72 and change, SHOP stock looks like a relative bargain. It’s allowed Amazon (NASDAQ: AMZN) to integrate its “Buy with Prime” service on its platform and seems to be more than willing to invest in areas that aren’t directly putting it head to head with Amazon.
Indeed, logistics was a battle that Amazon would dominate. In terms of artificial intelligence (AI) and other tech, though, Shopify can have the edge. And I think the firm will become better, even if the stock price sags lower from here.
My takeaway? Shopify is a classic buy on the dip.
Amazon
Amazon stock has also been cooling off, with shares crumbling 4.4% last Thursday. It’s an ugly time, but the $1.33 trillion company looks as good as ever as it looks to keep investing in its disruptive technologies. Further, once the economic sluggishness passes, it’s hard not to imagine that the cloud (AWS) and e-commerce will be right back on the growth track.
It’s a mistake to give up on Amazon here. It’s still an innovator, and it’s worth a rich premium. At 102 times trailing price to earnings, I’d look to swap a few loonies for greenbacks to buy a few shares on the dip.
With strong cloud and AI exposure, Canadians should view AMZN stock as a potential core holding for the U.S. side of their portfolios.
Bottom line
Stocks got creamed last week. But don’t run to the hills just yet. E-commerce firms Shopify and Amazon are only getting better with time. So, don’t flinch just because rates and other woes are back in the headlines!
Stay Foolish.
