TFSA Dip-Buying Investors: Why Today Is the Perfect Time to Buy Boring!

Park Lawn Corporation (TSX:PLC) is one of many boring stocks that investors should buy on the market-wide pullback.

| More on:
time is money compounding

This is the perfect time to buy the stocks of boring companies. The boring-er, the better!

We’re right in the middle of a drastic growth-to-value rotation, and as “sexy” names lose their appeal to the average investor, growth-heavy investors are going to want to join the shareholders of boring stocks who are going to be yawning their way to the bank as their TFSA holdings fall to a lesser extent than your average speculative tech play.

As we head into the scariest part of October (Halloween week), we could see more profit taking from red-hot growth stocks like Shopify, and while you could get a bigger peak-to-trough percentage discount, you could realistically see double-digit percentage losses accumulate so quick it’ll cause some to draw comparisons of the current sell-off to the tech wreck of 2000, when, in fact, this sell-off is much more benign in nature.

So, if you’re thinking about buying this dip, you’re on the right track. But you should take the “water cooler test” before you pull the trigger on a stock.

Is the company behind a stock you’re buying likely to be material you’d talk about at the office water cooler with your colleagues on break? Shopify, cannabis, crypto, and anything headlining CNBC are likely to be water cooler material and would thus fail the water cooler test.

What’s one stock that passes the water cooler test?

Funeral service provider Park Lawn (TSX:PLC) isn’t exactly what you’d want to talk to your friend about over the water cooler. You might even be labelled as morbid for bringing up the investment opportunity within the recession-proof death industry.

Park Lawn got pummeled in the recent sell-off around the same time the company inked a deal to purchase Wells Funeral Homes and Cremation Services, a deal that I believe is full of potential synergies that management will be able to realize slowly and steadily.

The company remains a high-growth name, which is a likely reason for why the stock sold off so violently along with the broader market, but when you consider the recession-proof nature of the death business and the prudence of management’s M&A strategy, I’d say the recent pullback in PLC is a gift. And the 2% dividend yield is just icing on the cake.

Foolish takeaway

Your TFSA is a long-term wealth compounder. Don’t try to catch a falling knife with dipped growth stocks at this juncture, even if you’re still a pro-growth investor.

Growth stocks had their day in the limelight, and as we head into a challenging environment where the Fed fears rapidly rising inflation, we could see value stocks become great again, especially value stocks that are boring. Good, old-fashioned, dividend-paying, recession-proof value stocks are going to have their day in the sun, so punch your ticket to the value show if you’re keen on buying this dip (you should be!).

Stay hungry. Stay Foolish.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool owns shares of Shopify. Shopify is a recommendation of Stock Advisor Canada.

More on Investing

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Emerging Canadian AI Companies With Big Potential

These tech stocks are paving the way to an AI-filled future, but still offer enough growth ahead for a strong…

Read more »

Young Boy with Jet Pack Dreams of Flying
Tech Stocks

Is Constellation Software Stock a Buy, Sell, or Hold for 2025?

CSU stock has long been a strong option for high growth, high value stocks. But are there now too many…

Read more »

rising arrow with flames
Investing

2 Riskier Stocks With High Potential for Canadian Investors in November

Risky stocks such as Well Health Technologies have the potential to provide life-changing long-term returns.

Read more »

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »

Canada day banner background design of flag
Investing

Got $500? 5 Top Canadian Stocks to Buy and Hold

These top Canadian stocks have solid fundamentals with potential to outperform the benchmark index by a wide margin.

Read more »

man touches brain to show a good idea
Energy Stocks

1 No-Brainer Energy Stock to Buy With $500 Right Now

Should you buy a cyclical energy stock at its decade-high? Probably not. But read this before you make a decision.

Read more »

Asset Management
Stocks for Beginners

TFSA: 4 Canadian Stocks to Buy and Hold Forever

Thinking about what to buy with the new TFSA contribution space in 2025? These four Canadian stocks are worth holding…

Read more »