This year has not been the calmest for stock market investors worldwide. The most recent foray of developments on a global scale has seen Israel and America start a war with Iran, which has, in turn, closed the Strait of Hormuz. Conflicting news coming from our neighbours south of the border keeps causing fluctuations, and it seems like it is becoming next to impossible to know how to deploy cash into the markets to take advantage of the rapid market movements.
There are opportunities to be leveraged in this market environment, but those with a long investment horizon might fare better than most. If you have yet to use the additional contribution room in your Tax-Free Savings Account (TFSA), here are a few high-quality Canadian stocks you can consider allocating some of that space to as long-term bets.
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A restaurant business and a critical agricultural stock
While most of the world’s attention is on oil and energy, food is another vital element being affected by the crisis in the Middle East.
Now, Restaurant Brands International (TSX: QSR) is a massive name in the restaurant industry that owns major quick-service food brands. The company has a franchise model that lets it minimize capital expenses while generating healthy and recurring revenue. When things become increasingly expensive, people will want affordable convenience, and fast food definitely offers that.
Then, there is Nutrien (TSX: NTR), one of the world’s most important companies for the agricultural industry. The company produces and sells critical crop inputs that commercial farmers worldwide need to improve and protect crop yields. It offers massive exposure to nitrogen and potash, backed by an extensive retail distribution network.
As global supply chains become increasingly disrupted, QSR stock offers relief through affordable convenience. At the same time, NTR stock offers exposure to products that will become increasingly more valuable to combat potential food scarcity.
Retailers that offer entirely different benefits
People spending on retail change their buying habits based on the economic environment.
At one end of the spectrum is Aritzia (TSX: ATZ), a premium fashion company with several high-quality names under its belt. It has a massive and loyal customer base and has been expanding its presence in the United States. When people have more to spend, consumers will not shy away from indulging themselves by investing in nice clothes that make them feel good. The scenario changes when they need to start saving.
Dollarama (TSX: DOL) comes in as a retail stock that goes completely the opposite way. Dollarama owns and operates the country’s largest chain of discount retail stores. It offers everyday items at lower and fixed price points to its customers. When budgets tighten and people look to save whatever they can, discount stores like Dollarama offer the relief they need.
The combination of these retail stocks offers a good balance between consumer wants and needs that savvier investors can leverage as long-term investments.
Foolish takeaway
Refreshing your TFSA with a few solid long-term picks can be a good way to put your money to work in the market right now. Owning Nutrien and Restaurant Brands International offers you exposure to the agriculture and restaurant industries, both of which are crucial. Dollarama offers exposure to a segment of retail that does well in all market cycles, and Aritzia can help investors benefit from growing buying power as the economy gradually improves. If you have been wondering how to deploy $7,000 into the stock market for substantial tax-free returns, these four stocks warrant being on your radar.
