Often, when the market is on a significant rally and stocks across the board are rising, it’s an exciting time for investors who are in the market. There is a tonne of euphoria amongst investors, and those on the sidelines are often compelled to start investing, given the excitement or fear of missing out.
And while there’s never a bad time to start investing, particularly if you’re investing for the long haul, starting to invest in a bull market when stocks are close to their peak value is not necessarily the most opportune time to begin investing.
Instead, you’re far better off starting to invest in a bearish market when many of the highest-quality stocks on the market are trading off their highs or, in some cases, severely undervalued.
Why is a bear market the best time to start investing?
It may sound obvious to start investing in a bearish market when stocks are cheap. After all, the goal of investing is to buy low and sell high.
However, while it sounds like it makes sense, it’s not always that straightforward. When it comes to putting your hard-earned money on the line, emotions play a significant role.
And when the market is consistently falling in value, and the news about the economy is constantly worsening, it can be difficult for investors to see the big picture.
The reality is that just like bull markets, bear markets don’t last forever. So while some investors will want to avoid the stock market as prices continue to fall, that is actually one of the best times to start investing and buying stocks, while many of the highest quality companies trade undervalued.
The key is not just to buy any stocks because they are cheap. It’s essential to focus on finding the highest-quality businesses and then looking to see how cheap they trade.
Buying a mediocre stock that’s undervalued may give you some potential to see returns as the market recovers and the stock rallies back to fair value.
However, if you buy a high-quality stock, not only can you earn a significant return as the market recovers, but you could also earn significant gains for years to come as that high-quality company continues to expand its business and grow shareholder value.
So with that in mind, if you’re looking to start investing today, while there are a handful of stocks trading undervalued, here is one of the top companies to consider adding to your portfolio today.
One of the top stocks to buy while it trades ultra-cheaply
If you’re looking to start investing now while many stocks are trading undervalued, one of the top picks to consider is Aritzia (TSX:ATZ), the women’s fashion retailer and impressive growth stock.
Aritzia has been growing in popularity for years, leading to a significant expansion of its store count and rapidly increasing both its revenue and profitability.
For years, it has been expanding across Canada while also investing in building a high-quality e-commerce platform. So when the pandemic hit, while no company could be ready for it, Aritzia did an impressive job responding and leveraging its e-commerce platform to continue growing not only its sales but also the popularity of its brand.
Now, while the e-commerce platform still generates a large sales volume for Aritzia, it also helps to identify where the most demand is coming from and where to open its newest boutiques. This is leading to a rapid expansion south of the border, which is why Artizia is one of the top long-term growth stocks to consider.
In the last three years alone, Aritzia’s annual revenue has jumped from $981 million to just shy of $2.2 billion. Meanwhile, its adjusted earnings per share has more than doubled over that stretch, jumping from $0.87 in fiscal 2020 to $1.86 in fiscal 2023.
Today, though, the market is concerned that Aritzia could be impacted by lower consumer spending in response to a weakening economy, which has caused the stock to trade ultra-cheap. And while these concerns are warranted, these headwinds shouldn’t last forever.
Therefore, while this impressive growth stock is trading so cheaply, it’s the perfect stock to buy now, especially if you’re looking to start investing in this highly opportune environment today.
