The ongoing trade tensions with the U.S. are leaving investors worried about the returns from their stock market investments. Times of economic uncertainty causes plenty of problems for the economy. In turn, they impact investor sentiment and the stock market as investors try to find ways to protect their money. Checking your self-directed portfolio and seeing how much you’re down these days might not be the most encouraging thing.
Experienced investors with a longer investment horizon tend not to worry too much about short-term fluctuations. Sure, there is no telling when the tariff situation will end. There is also no way to determine when the next big downturn will come along. However, the overall negative sentiment is leading to plenty of high-quality stocks trading on the cheap.
There is a chance that stocks trading for discounts might trade at even lower prices as the market volatility continues. However, slowly increasing your positions in the right stocks during this decline can help you capitalize on massive bargains in the long run.
Taking it nice and easy
The thing with downturns is, you cannot predict exactly when they will happen. When they do, you cannot tell how long they will last. What you can do is try to use it to your advantage. Identifying high-quality stocks trading at arguably undervalued prices on the stock market is an excellent way to go.
By buying on the cheap when the chips are down, you can enjoy significant wealth growth when things start looking up again after the dust settles. Of course, things can continue getting worse. It’s important to slowly add shares to your portfolio as prices continue going down. You don’t want to spend all your cash on a stock in one day only to find it trading for much less a couple of days from now.
Trying to time your buying just as an upward correction can be a mistake. You never know when the market will bounce back. Picking up shares slowly as the downturn continues can be a smart strategy.
A Canadian stock at its all-time lows
As the tariffs continue dragging the market lower, there is a stock that those with the stomach to bear volatility should consider: Canada Goose Holdings (TSX:GOOS). Canada Goose is a company that designs, manufactures, distributes, and retails premium outerwear with customers across Canada, the U.S., and the rest of the world.
As of this writing, GOOS stock trades for $12.19 per share, down by over 80% from its all-time highs. At current levels, it is hovering around new all-time lows. With a 16.47 trailing price-to-earnings ratio, it looks like we will see more all-time lows. Even now, the stock is too cheap to ignore if you are a value-seeking investor.
A recession in Canada and across the border can sink it even further, although recession fears might already be priced into this valuation.
Foolish takeaway
Why would it be a stock to add to your portfolio? Canada Goose is a strong brand. While it hasn’t faced a downturn as bad as this before, the GOOS stock has the ability to amplify investor returns. Well-capitalized and consistently expanding its product range while improving core operational efficiency, it can bounce back when the market recovers.
Investing in its shares, especially at new all-time lows, is a very high-risk play. However, an improvement in conditions can lead to substantial long-term returns for Canada Goose investors.
