2 of the Best TSX Stocks to Invest $1,000 in Right Now

You can bet on these TSX stocks recovering during the next year, making them excellent choices for long-term income.

| More on:
A worker gives a business presentation.

Source: Getty Images

Canadian investors cannot be blamed for wanting to hold on to their cash right now instead of investing in TSX stocks. The market is still weak, with the Bank of Canada recently increasing the interest rate yet again. We all need to have a little extra money around for more costs and less saving.

Even so, if you’ve been saving for a while and putting aside cash to invest on a consistent basis, right now is certainly a great time to invest. The market is down around 10% as of writing from 52-week highs on the TSX today. This leaves the opportunity to get in on some of the best long-term deals out there.

Buy a bank

Honestly, I say it a lot, but there’s a reason to invest in these TSX stocks. If you have $1,000 you’re looking to invest, I would consider one of the Big Six banks. However, if you’re only going to invest in one, make it one that’s sure to have a strong recovery.

For me, a solid option is Toronto-Dominion Bank (TSX:TD). Yes, right now TD stock is exposed to the United States and the weak economy there as well. But, as Warren Buffett states, you can bet on American businesses. There will be a recovery, and when it happens TD stock has great exposure across the country. It is, after all, one of the top 10 banks in the country.

So, right now, with TD stock down 6.5% in the last year, 8% year to date, and trading at 10.19 times earnings, it’s a great time to buy — especially as it’s also the second-largest bank in Canada, offering a dividend yield at 4.8%.

It’s also important to consider that in the last few decades, TD stock as well as other Canadian banking TSX stocks have had provisions for loan losses. This allowed them to return to pre-drop prices within a year of hitting lows. TD stock is now up 96% in the last decade alone.

Grab a TSX ETF

Warren Buffett has also recommended in the past to buy the big companies on the market. Now, he was talking about the S&P 500. You can certainly do that, but the Canadian market is also a good bet as well. For this, you’ll want to find a low-cost TSX index fund among TSX Stocks.

When I say low cost, I don’t just mean share price. Low cost in this case means low fees. If you’re gaining 8% interest on a stock, but then 1% of that is taken away from fees, then that’s cash being eaten away. So, consider a low-cost TSX fund like iShares S&P/TSX 60 Index ETF (TSX:XIU).

The XIU ETF focuses on the top 60 companies on the TSX today, with shares up 4.82% in the last year, and up 2% year to date. It fluctuates as the TSX fluctuates, but mainly climbs upwards except during downturns. Plus, since it’s not actively managed and simply follows the top 60 stocks, there is a 0.18% management expense ratio! That would mean of the $1,000 invested, you pay $1.80; meanwhile, you’ll receive a 3.31% dividend yield as of writing. So, it’s well worth the investment.

With shares where they are, it’s a great time to consider jumping in on the TSX and buying through thick and thin, mainly thin, as Buffett likes to say. As you continue to invest more into this TSX ETF and the TSX climbs higher, you’re sure to see that $1,000 turn into more and more cash in your pocket.

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 Amy Legate-Wolfe has positions in Toronto-Dominion Bank. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

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 »

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 »

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 »

concept of real estate evaluation
Stocks for Beginners

2 No-Brainer Real Estate Stocks to Buy Right Now for Less Than $1,000

These two real estate sector-focused stocks have the potential to deliver strong returns on your investments in the coming years.

Read more »

engineer at wind farm
Energy Stocks

Invest $20,000 in This Dividend Stock for $100 in Monthly Passive Income

This dividend stock has it all – a strong outlook, monthly income, and even more to consider buying today.

Read more »

stocks climbing green bull market
Stocks for Beginners

3 TSX Stocks Soaring Higher With No Signs of Slowing

Don't ignore stocks just because they look like they're at a high price. Instead, see exactly why they've driven so…

Read more »

Middle aged man drinks coffee
Dividend Stocks

Here’s the Average TFSA Balance at Age 35 in Canada

At age 35, it might not seem like you need to be thinking about your future cash flow. But ideally,…

Read more »