TSX at Record Highs: Is it Too Late to Start Investing?

Despite its recent surge, the TSX Composite still offers great opportunities for investors to multiply their hard-earned savings over the long term.

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The S&P/TSX Composite Index has staged a remarkable rally in the last few months. The stock market benchmark has jumped by over 12% in the last six months and currently trades more than 90% higher from its low point during the pandemic-induced crash in March 2020.

Last week, the main TSX index reached a new all-time high of 22,362 (on a closing basis), making many investors wonder if they have missed the boat and if it is too late to start investing in the Canadian stock market.

The answer to this question depends on several factors, including your investment goals and risk appetite. Nonetheless, the market always has opportunities to find quality high-growth or dividend-paying stocks that can suit your investing style and preferences, especially if you follow the Foolish Investing Philosophy by taking the long-term approach. Before highlighting a top TSX stock to buy today toward the end of this article, let me quickly explain why the TSX index is still attractive for investors despite its recent surge.

TSX at record highs: Is it the right time to buy stocks?

There are several reasons why the Toronto Stock Exchange could still be a good place for you to invest your money today, even after the index has recently hit a record high.

One of the most significant tailwinds for the TSX in the near term could be the expected cuts in interest rates by central banks in the United States and Canada. As inflationary pressures gradually ease, the U.S. Federal Reserve and the Bank of Canada are likely to reduce rates to support economic growth and avoid a possible recession. Lower interest rates tend to boost stock prices by making borrowing cheaper for businesses and consumers, ultimately making bonds and other fixed-income assets less attractive to investors.

Another reason to be optimistic about the TSX is the strong recent financial performance of some key sectors, such as technology and industrials. In the post-pandemic era, these sectors continue to benefit from a gradual global economy and trade recovery, with an improving supply chain environment.

While investing in the TSX is not without risks, buying fundamentally strong stocks today and holding them for at least the next 10 years could significantly minimize your risks and increase your chances of generating superior returns over the long run.

A top TSX growth stock to buy right now

If you’re looking for a great TSX stock to buy today and hold for years to come, Celestica (TSX:CLS) could be worth considering. It’s a Toronto-headquartered company with a market cap of $7.4 billion that mainly focuses on making hardware platforms and supply chain solutions for businesses. CLS stock has yielded an outstanding 267% positive returns in the last year, outperforming the TSX Composite, which has climbed by only 7.1% during the same period.

Celestica registered a solid 27.9% year-over-year jump in its adjusted annual earnings in 2023. Despite the challenging macroeconomic environment, the company expects its adjusted free cash flow to grow positively in 2024 and exceed the $200 million level. Moreover, Celestica’s continued strategic focus on operational efficiency and higher margin opportunities brightens its long-term growth outlook, which can help this top TSX stock continue soaring over the long term.

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.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

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