Don’t let any surges in market volatility scare you away from investing in your future. Undoubtedly, your TFSA (Tax-Free Savings Account) can act as a great wealth compounding tool. But if you’re scared to the sidelines when the best market bargains come to be, you may be taking away from your portfolio’s growth potential over the long run.
You see, the recent scary bout of volatility in September and October will not last forever. While it seems like a nasty correction, with an imminent recession that could bring forth even more downside, the reality remains that this bump in the road will probably be nothing more than a blip in the grander scheme of things. Heck, the 2020 stock market crash is starting to look quite small when looking back. And it’ll continue to look less horrific over time.
As stocks continue to stumble (perhaps in both directions), investors should make the most of the bumps and pick up shares of a high-quality company that has what it takes to do well, not just over a recession year or bear market, but over the course of decades.
Indeed, timing the market can be tempting. But I can’t do it well, nor can most investors who attempt to do so. Instead, be a net buyer of a stock when you deem its intrinsic value lies above the current market price.
Without further ado, let’s consider two TSX stocks for TFSA investors to get it done already!
BCE
If you’re a fan of dividends, BCE (TSX: BCE) stock is starting to get incredibly attractive. The stock can’t seem to find a bottom, but with every big move lower, the dividend yield stands to swell even further. Right now, the stock is hovering around $52 per share, with a yield that’s sitting at 7.5%.
Though the headwind of high rates could continue to act as an overhang on the stock, I think that investors are ignoring the potential for relief once central banks are finally ready to pull the brakes on their aggressive rate increases. For now, it seems like rates can only move higher. And BCE stock can only fall lower.
Though BCE stock could be uneventful for another few quarters, I think the steady dividend is worth reaching out for, especially if you’re an investor who’s looking to reinvest the dividends in your TFSA to get the most out of compounding.
CPKC Rail
The railways are quite sensitive to the economy, and while there can be occasional dips and bear market moments, the long-term trajectory is worth braving for a shot at TSX-crushing gains. CP Rail (TSX: CP) (or CPKC) is arguably the most exciting rail play in North America right now, as it looks to optimize Kansas City Southern’s network. I think CP can bring out the best in the U.S. rail, which also has exposure in Mexico.
Not only does CP have a moat as a railway, but it also has an extremely wide one relative to rivals, given the breadth of its network and the smarts of its top bosses!
All considered, the stock looks like a TFSA top pick as shares retreat further below $100 per share.
