While selling is always a bad idea when you’re in a state of shock and anxiety, I’d argue that excessive buying can also be a bad idea, especially if you find yourself exhausting your liquidity reserves too early in a selloff.
Indeed, maintaining liquidity on the way down can be wise, especially if you’re a new investor who’s just starting to get used to excessive levels of volatility. Timing bottoms is hard, if not impossible, to do. Instead, take timing out of the equation by committing to buying a little bit after every period.
That way, you’ll be able to sleep just a bit more comfortable knowing you have a game plan going into a selloff, whether it ends up a mere correction or something far worse (think a bear market or historic market crash).
In this piece, we’ll look at two great mid-cap stocks to buy if you want to further diversify your portfolio in the face of the latest market-wide selloff. Undoubtedly, we got a hint of a growth-to-value rotation just a few weeks ago.
Though mid-cap stocks have been unable to escape the pressure this time around, I think that there’s ample value to be had in the mid-cap universe right now (especially in Canada) now that the Russell 2000 (a mid-cap index) is right back to where it was before its “Great Rotation” surge at the start of July.
Without further ado, let’s check in with the two TSX mid-caps that stand out as intriguing gems.
Cargojet
Cargojet (TSX: CJT) stock has been rolling over again, with shares now down close to 15% from their 52-week highs. Undoubtedly, recent quarters have been really nothing to write home about, and with macro headwinds and recession fears picking up traction again, there’s a good chance that consumer digital spending could stay challenged for quite some time. As a provider of overnight shipping solutions, Cargojet could really use a healthier consumer.
While faster rate cuts would certainly help the cause, investors should be ready for nothing short of turbulence from the economically sensitive cargo airline. In any case, I find shares to be quite cheap, especially given its impressive fleet and positioning ahead of the next cyclical upswing. Whenever shoppers come back online, CJT stock could surge suddenly.
Until then, perhaps it makes sense to nibble into the name while it’s down close to 50% from its peak over matters that seem overblown.
StorageVault Canada
StorageVault Canada (TSX: SVI) is a $1.7 billion self-storage firm that’s still well off (close to 35%) in its early 2022 highs. I think the continued weakness, primarily related to the higher-rate climate, is just a tad overdone.
Indeed, self-storage solutions could be in for an upswing should people find themselves downsizing (in response to the rising costs of living). And if rates fall and consumers feel a bit better, StorageVault also stands to benefit, given it’ll take less of an interest hit from its debt load.
In any case, SVI stock is a well-run mid-cap firm to keep on your radar while it’s down and out. It’s still a “growthy” play and one that could yield results over a longer-term horizon.
