Navigating Bear Markets: Top TSX Stocks Proven to Outperform

These two stocks have proven essential during a bear market. Both to consumers as well as those investing in them.

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If you’re worried about the future of the market, I get it. The market continues to be a volatile place, even with some markets hitting all-time highs around the world in the last month. We’ve been through so much in the last few years. There’s been bull markets, bear markets, crashes, pandemics, geopolitical issues, and it doesn’t seem to be slowing down.

This is why, with so much going on in the world, the last thing you want to worry about is your finances. Today, we’re going to focus on where to invest during bear markets. Companies that outperform in these markets are due to continue climbing from there as well. So, let’s get into it.


Dollarama (TSX:DOL) is the perfect option for Canadians looking to reduce their volatility during bear markets. The company has been proven to outperform during bear markets thanks to a few reasons. First off, the company is obviously known for low-cost retail items. This includes everything from food and baby items to candy and toys.

Furthermore, the company is well known for increasing costs only when it absolutely has to. This happened recently with Dollarama stock stating it would need to increase costs on food items and other consumables that the company is known for due to inflation.

However, despite this little bit of bad news, Dollarama stock has maintained a huge growth path over the last year or two. The company has seen sales grow, added more store locations across the country, and expanded its Dollarcity acquisition in Latin America.

So, even with shares up 16% in the last year, there could be more to come — especially after a dip coming from this bad news about rising prices. Overall, the company is a strong one that can see growth in a bear market, and a bull one. Whether it’s from seeking out low prices or having more cash on hand, Dollarama stock is always a great option.

Constellation Software

You might not think of tech stocks when you think of great companies during bear markets. But Constellation Software (TSX:CSU) has proven otherwise. The tech stock has made a name for itself since the 1990s, buying up essential software companies to turn a profit.

The company has done this again and again over the years, finding small companies of around $5 million to purchase and rebrand as its own. This includes everything from the software you use at the library to running subway cars.

Now, Constellation stock has proven its worth through the pandemic, downturns, and more. It’s traded higher and higher during this bear market, and that’s unlikely to slow down. Essential software is, well, essential! And once the market recovers, Constellation stock will simply have more cash on hand to make even more investments.

So, with shares up 60% as of writing, it might not look like a deal. But over time, it certainly will be. Looking back, the company has grown 320% in the last five years alone! And that’s a lot of volatility to deal with. Therefore, Constellation stock is another I would continue to hold through any bear market.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy.

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