It’s understandable if the volatility has kept you on the sidelines this year. Despite the S&P/TSX Composite Index trading about flat on the year, the index has had no shortage of spikes, both upward and downward, in 2023.
At least part of the Canadian stock market’s volatility this year can be blamed on the short-term uncertainty in the economy. Canadians across the country are eagerly waiting for both inflation and interest rates to drop to at least pre-pandemic levels. Unfortunately, it’s anybody’s guess as to when that will actually happen.
Image source: Getty Images
Buying and holding for the long term
I’d strongly urge anyone looking to make a quick profit in the last two months of the year to tread lightly. It’s hard enough to predict short-term movements in the stock market in the easiest of situations, let alone what investors are faced with today.
However, for some investors, there are plenty of opportunities to take advantage on the TSX. That being said, I’d argue that those opportunities are better suited for investors with time on their side.
What I’d suggest to anyone looking to put some cash to work before the end of the year is to try and ignore the short-term noise in the stock market. That won’t be easy but it will allow you to make rational decisions and strategically evaluate businesses that you’re interested in.
If you’re willing to be patient, I’ve reviewed two TSX stocks that belong at the top of your watch list.
TSX stock #1: Lightspeed Commerce
Not all tech stocks have come roaring back this year. The tech sector had a very rough outing in 2022, but many individual tech stocks have rebounded impressively well. That list, however, does not include beaten-down Lightspeed Commerce (TSX: LSPD).
Shares of the $3 billion company are down more than 80% from all-time highs set in 2021. The stock is close to positive over the past year, though, and up more than 20% this month.
The recent surge has come from the company’s strong second-quarter (Q2) earnings that were announced earlier this month. Revenue growth was up 25% year over year, compared to the 20% that Lightspeed saw in Q1. Gross payment volume was also up nearly 60%, compared to 56% in the quarter prior.
Growth investors looking to add some multi-bagger growth potential to their portfolios should have Lightspeed on their radar.
TSX stock #2: Toronto-Dominion Bank
A dependable bank stock is the perfect choice to help balance out the risk of owning a high-growth stock like Lightspeed.
Toronto-Dominion Bank (TSX: TD) will surely be a far less exciting company to own than Lightspeed. However, there’s absolutely nothing wrong with being boring when it comes to investing. In fact, that’s exactly why I’d suggest owning it if your portfolio contains growth stocks.
TD Bank can provide investors with both dependability and passive income. Both of these will help balance out the inevitable volatility that comes from owning growth stocks.
At today’s stock price, TD Bank’s dividend yield is nearing 5%.
Down 20% from all-time highs, now could be a great time to be loading up on one of Canada’s largest banks.
