Investing is about one’s comfort and understanding of the stock. While you can mimic the portfolio of different analysts to generate returns in the long term, a buy right now approach only works when you know what you are getting into. Rushing into investing can be dangerous if you are chasing the rally of a growth stock. Instead, you can use a buy-the-dip approach for seasonal and cyclical stocks that have a set pattern. In some years, they might deviate from the pattern, but the pattern will return in the normal course of business.
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Two stocks to invest $250 in right now
Timing the market is a fool’s play, but these stocks make a strong case for buying the dip.
A seasonal stock to buy right now
Air Canada (TSX: AC) is a seasonal stock that tends to rally to $25 in the summer peak of June and the holiday season peak of November to January. Behind the rally are the advanced ticket sales, especially for the cross-border route.
In 2025, the tariff war significantly affected the passenger volumes travelling to the US. However, higher demand in domestic and Atlantic travel offset the dip in US transborder demand, and the airline reported overall positive revenue growth in the second quarter. This saw Air Canada stock ride its summer season rally of 66% from $14 on April 1 to $23.29 on July 10.
The airline is now set to ride its holiday season rally and has already bottomed out at $17.56 in September. The rally has just begun, and the stock price could touch $25. However, you can keep a slightly conservative target and sell it at $24. Even if there is a demand shock, investors can buy the stock at the current dip and hold it for the summer season rally.
A 30% rally in less than a year is a quick way to build money only by buying two to three seasonal stocks. You can compound the returns by reinvesting the profits in long-term growth stocks, like Descartes Systems.
Investor tip
Suppose you invest $1,000 in Air Canada and sell the stock for $1,300. The $300 gain can be reinvested in long-term growth stocks to compound your returns and also diversify your investments. Remember, seasonal stocks like Air Canada may not be a good investment for your core portfolio of wealth creation through long-term investing. Cyclical stocks are vulnerable to consumer demand.
Cyclical stock to buy for dividends
Canadian National Railway (TSX: CNR) stock bottomed out at its four-year low of $126.11 in August. The market has now absorbed tariff war uncertainty. They are now looking for new opportunities in alternative supply chains. All the trade-related stocks are seeing a recovery, including Canadian National Railway, which transports petroleum and chemicals, automotives, minerals, and forest products between Canada and the United States.
The trade war reduced the company’s revenue by 1% in the second quarter and forced it to lower its 2025 earnings per share guidance. This reduced the stock price and brought it to an attractive valuation of 4.9 times price-to-sales ratio and 16 times forward price-to-earnings ratio. The cyclical downturn that began in 2024 due to a slowdown in high-yield automotive volumes is nearing an end.
The Bank of Canada’s interest rate cuts could boost discretionary spending, and the shutdown of the US government could give temporary relief from tariff shocks. The trade-related stocks could ride a recovery rally, making them a buy right now.
