A market crash like we’ve seen the last few weeks is something that gets long-term investors excited. While most people are thinking only of the short-term and selling stocks out of fear, long-term investors are using this opportunity to acquire numerous high-quality companies for pennies on the dollar.
The only thing you need to invest in a market crash is discipline and the capital.
If you have money to invest today, depending how much you have you may want to spread it out among more than just two businesses given that so many stocks are trading so cheap. For now however, here are the two best stocks to consider buying today.
Gold stocks
Considering that pretty much every asset has been sold-off in order for investors to get the most desired asset at the moment — cash — the last few weeks have been tough for gold stocks.
This will all eventually change for two reasons. As the cash begins to lose value when inflation ramps back up, gold stocks will be one of the best-performing industries. In addition, when the market volatility finally subsides, investors will be looking to add stocks while mitigating risk, which is exactly what gold stocks provide.
One of the top gold stocks to consider adding today is Equinox Gold Corp (TSX:EQX). Equinox was one of the best performing gold stocks in 2019, and that continued into 2020 after its merger with Leagold late in 2019.
The company began operations in 2018 and has been one of the top growth stocks on the TSX due to its solid production growth in addition to the price of gold rising rapidly in 2019.
However, those gains were all erased the last few weeks as investors sold the stock electing to raise cash. This has left Equinox at a highly valuable share price — and capable of big upside when investors inevitably return to gold stocks to protect their capital.
At the moment, cash is still the most in demand asset for a lot of investors, but when that changes, look for Equinox to rally massively.
Real estate stocks
A list of top stocks to buy today would be incomplete without a real estate stock. The top one to buy today is Killam Apartment REIT (TSX:KMP.UN).
Killam is a residential real estate company, an industry that all investors should consider gaining some exposure to. Residential real estate is one of the most defensive industries, so it’s crucial to have at least some exposure in these uncertain times.
One thing investors are concerned with in the residential real estate market are REITs that have high exposure to Alberta. Investors would like to avoid Alberta if they can, given the uncertain nature of its economy following this most recent collapse in oil prices.
A REIT like Boardwalk for example, which has about two-thirds of its net operating income coming from Alberta, has been one of the hardest hit REITs since this crash began. It’s down more than 60% from its 52-week highs making it one of the worst-performing stocks on the TSX.
Killam, however, gets just 6.7% of its net operating income from Alberta, so the company isn’t highly exposed.
But its stock has still fallen considerably. As of Thursday’s close, it was down more than 30% from its highs. Its current price gives the company incredible value. In addition, at these prices the REIT yields more than 4.2%. And that dividend is safe too, with an estimated payout ratio of just 79%.
Bottom line
Both stocks are trading exceptionally cheap at today’s prices. In addition, both companies are ideal holdings for investors going forward, as we enter a period of more uncertainty and slower economic growth.
While it’s unclear how long this will last, investors shouldn’t pass up this prime opportunity to buy these stocks for the long run while they are trading this cheap.
