TSX Index Hits All-Time Highs: Where to Invest in a Stock Market Recovery

These stocks are the perfect options for investors looking to get in on the action of the TSX today as it rises higher.

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The TSX today has passed all-time highs, and it could be that we get to actually enjoy those highs in the future! While anything can happen, especially with interest rates and inflation still up, there are certain ways to safely get in on the action.

Today, let’s consider three strategies investors can take to get in on those highs on the TSX today.

Long term

First off, let’s consider the long-term growth strategy as one for investors to consider on the TSX today. Investing in the stock market should be viewed as a long-term commitment rather than short-term action. The market trends upwards overall, which is why it’s important to stay disciplined and avoid making impulsive decisions.

To get in on long-term market growth, consider investing in an exchange-traded fund (ETF) that focuses on the TSX today. A great option would be to look at one that invests in the top TSX 60 stocks. This is why I would recommend iShares S&P/TSX 60 Index ETF (TSX:XIU).

The XIU ETF is an all-around great investment investing into the top 60 companies on the TSX today. If you want the best growth as the TSX rises, this is the easiest solution. You’ll get a 3.1% dividend yield with a relatively low management fee. Shares are now up about 10% in the last year and growing, so now is a great time to buy.

Growth

If you’re looking for growth among your investments, there are also many stocks that could provide you with that action. But I wouldn’t just look at a company first, rather an industry. Consider sectors that are rising and will likely continue to risk in the near and distant future.

In that case, there are tech stocks that could certainly do the trick. While tech stocks can be volatile, there are many that have proven to be able to handle the ups and downs of the market. These tend to offer recurring revenue and a solid growth strategy.

One to consider is Constellation Software (TSX:CSU). Since coming on the market in the 1990s, the company has surged in share price, now almost reaching $4,000 per share! This comes from acquiring niche, essential software companies and signing on the recurring revenue that comes with them. So, if you want continued growth, CSU stock is a very strong option.

Essentials

Then, there are the essentials to consider as the market recovers. Companies that have proven to do well during the downturn and will continue to do so. That would certainly point to healthcare companies. However, instead of investing in a risky pharmaceutical company, for example, look for essential healthcare products.

That would include insurance. Property and casualty insurance in particular are insurance coverage that remains essential no matter the market. What’s more, an aging population means more clients looking of this coverage. This is why a company like FairFax Financial Holdings (TSX:FFH) continues to do so well.

Its underwriting abilities have made the company incredibly strong. However, that strength has been furthered by Prem Watsa, the chief executive officer of FFH stock. He has been highly successful in identifying value stocks to invest in over time. And this will likely continue as he remains in charge.

With that in mind, these are certainly the top three investments I would consider on the TSX today as it rises.

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 has positions in and recommends Fairfax Financial. The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy.

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