The Canadian stock market has rebounded incredibly well after plummeting in early April. The S&P/TSX Composite Index managed to drop more than 10% in a span of less than one week last month. However, since bottoming out one month ago, the index has surged more than 10% and is now back in positive territory on the year.
At this rate, it seems as if it’s only a matter of time before the Canadian stock market returns to all-time highs, which were last set in January earlier this year.
Of course, anything can happen in the short term, though. Another 10% pullback could be around the corner. That being said, volatility is no reason to keep a long-term investor on the sidelines.
If you’ve got time on your side, now could be an incredibly opportunistic time to put some money to work in the Canadian stock market.
With that in mind, I’ve put together a well-rounded basket of three TSX stocks to add to your watch list today.
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Brookfield
There’s almost never a bad time to be investing in this global asset manager.
Brookfield (TSX: BN) is as diversified a stock as you’ll find on the TSX. The $120 billion asset manager boasts a well-diversified portfolio of assets in addition to a global presence.
As diversified as the stock is, though, Brookfield has had no issues outperforming the market’s returns in recent years. Shares are up 30% over the past year and 130% over the past five years. Those gains are good enough to nearly double what the S&P/TSX Composite Index has returned.
If you’ve got the means to be investing today but are not sure where to start, this is as good a company as any.
Brookfield might not be trading at much of a discount today, down just 10% from all-time highs. That being said, this is not a stock that you need to think twice about loading up on.
Lightspeed Commerce
Shareholders of this tech stock have been on a wild ride over the past five years. Shares might only be down 25% over that period, but the stock has been through all kinds of highs and lows.
Lightspeed Commerce (TSX: LSPD) is a very different stock from Brookfield; there’s no question there. Lightspeed doesn’t offer anywhere near the same level of dependability when it comes to returns. What the tech company does offer, though, is a chance to earn multi-bagger returns.
At these prices, Lightspeed Commerce is more of a value stock than a growth stock, which is what it was considered not long ago.
I’d be cautious about how much of your portfolio is allocated to a stock like this, but that doesn’t mean there shouldn’t be a spot for it on your watch list.
For a very reasonable price right now, there’s a ton of long-term growth potential upside here.
Sun Life
To balance out this basket of companies, I’ve included a steady, dividend-paying stalwart in the financial sector.
There’s not a lot to get excited about with insurance stocks — that is, unless you’re searching for dependability and a steady stream of passive income.
It’s during volatile market periods like these that you’ll be glad to own a few shares of a stock like Sun Life (TSX: SLF). The company can help minimize the impact of volatility through its defensiveness and dividend, which is currently yielding 4%.
If your portfolio overindexes toward high-volatility growth stocks, you’d be wise to have a stock like Sun Life on your radar.
