Canadian investors have certainly felt the pain of volatility in 2022. The S&P/TSX Composite Index may be flat on the year, but the index has endured all kinds of ups and downs since the beginning of the year.
In fairness, though, the volatility should not be all that surprising. The saying goes that investors dislike uncertainty, and there are plenty of reasons to be uncertain about the market’s condition right now, at least in the short term.
In addition to potential interest rate hikes and the lingering effects of the global pandemic, there’s now a global crisis in Ukraine that investors need to factor into their forecasting.
Investing in today’s volatile market
It’s hard enough to predict short-term movements in the stock market in the most certain of market conditions. Good luck trying to bet where the stock market will close any given day right now; it’s nearly impossible.
Fortunately, if you’re investing for the long term, you don’t need to predict how the market performs in the short term. Instead, you can focus on buying and holding market-leading companies. And due to the market’s recent volatility, there are plenty of top TSX stocks trading at opportunistic discounts today.
Here are two market-leading stocks that you can feel good about buying, even in the most uncertain market conditions.
TSX stock #1: Brookfield Asset Management
There are several very good reasons why a long-term investor would be interested in this TSX stock. Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) can provide a portfolio with diversification, growth, and even passive income.
It’s Brookfield Asset Management’s diversification that makes the company stand out for me. It owns and operates businesses across the globe, spanning a wide range of different industries. Owning shares of this TSX stock is as close as you’ll get to owning an index fund.
Despite the company’s broad diversification, it’s been a consistent market-beater for years. Excluding dividends, shares are up over 100% over the past five years. In comparison, the Canadian market is up less than 40%.
Down nearly 15% from 52-week highs, this is a buying opportunity that I’d urge long-term investors to take advantage of.
TSX stock #2: Algonquin Power
My second pick is a slow-growing Dividend Aristocrat. Algonquin Power (TSX:AQN)(NYSE:AQN) may lack in growth and diversification compared to Brookfield Asset Management, but it sure makes up for it with defensiveness and passive income.
As a leading utility provider, Algonquin Power can provide a portfolio with stability, even during times of high volatility. So, if you ever find yourself slightly over-indexed in highly volatile growth stocks, owning a dependable utility stock like Algonquin Power would be a wise idea.
Generating a new stream of passive income is one way to help combat volatility. And Algonquin Power can definitely help with that. At today’s stock price, the company’s forward annual dividend of $1.09 per share is nearing a whopping 6% yield.
Foolish bottom line
It’s easier said than done to ignore all of the day-to-day noise in the stock market, especially right now. There’s no shortage of bearish catalysts in the stock market currently. But as long as you’ve got a long-term mindset, there’s no reason that you can’t be loading up on TSX stocks today.
