Canadian investors are still a bit on edge when it comes to the market these days. Clearly, there’s reason, as we’ve been burned several times over the last year. The TSX today remains above $20,000, but that certainly hasn’t lasted in some cases. So, where should investors put that $1,000, and should they invest?
Timing or time in?
Right now, many Canadian investors may worry about whether the market is going to drop. This is for two reasons. First of all, they clearly do not want to lose out on any gains they’ve made. But also, the old saying to “buy low, sell high” rings true in this case. If you want to make quick returns, buy low, then sell high, right?
The thing is, the best gains aren’t from trying to time the market in this way. It’s impossible to time out when the market bottom will be. Moreover, anyone who manages to do this has certainly done so by accident.
Therefore, time in the market is far more lucrative. This means you get into your investments pretty much whenever you can. Then you hold them as long as you can. This long-term strategy has long been the key to success.
Where to put $1,000
With this in mind, it’s always a good idea to get into the TSX today. But where? You want stocks that aren’t going to suddenly drop off the face of the earth — ones that you can hold on to for years, even decades, and find success!
In that case, you need to look for essentials. Companies that will be around no matter what happens in the market. Recession, pandemic, anything. I recommend finance stocks in many of these cases, though if you’re worried about a recession when you want to take out the cash, these may not be the best options.
That’s why essential goods and services are a great option instead. Items that have done well no matter what is going on. And there are two companies I would therefore put to use right now.
Going essential
If you have just $1,000 you want to put to good use, consider Dollarama (TSX:DOL) and Topicus.com (TSXV:TOI). Both these companies provide essential services that won’t simply go away overnight. Moreover, they have proven worth even in these last difficult years.
Dollarama stock provides essential products as well as discretionary items. The company has done well during downturns and even during the pandemic. We need these items at the best cost, and this stock has done well for it. What’s more, it continues to grow even out of downturns thanks to expansionary measures. So, even with shares up 22% in the last year, it’s still a buy in my books.
Topicus stock is a bit different. It’s a spinoff of Constellation Software, but it’s already making a name for itself. This is because CSU stock is managing the company’s growth in Europe. It undergoes the same strategy of buying smaller software companies proven essential and putting them out under the Topicus/Constellation name. So, again, even with shares up 33% in the last year, it’s a strong option for your $1,000.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
