For most people, investing in stocks is one of the more accessible ways to amass $1 million. The stock market may seem daunting for anyone new to investing but there’s no reason to be intimidated. Investing can be as easy or difficult as you’d like to make it.
If building a $1 million portfolio is your goal, you’ll either need to start with a significant lump sum of cash or a lot of time in front of you. And since most people likely won’t be starting with a massive amount of money, you’ll need to rely on time and patience to reach your savings objective.
Discounts in the tech sector
Investors looking for long-term growth potential would be wise to consider the tech sector. Tech stocks may come with added levels of volatility, but that is one of the prices that need to be paid for the market-beating growth potential.
Another reason to be investing in tech stocks today is for the bargain prices. There’s no shortage of high-quality stocks in the tech sector trading at a discount today. Even after a rebound year in 2023, many tech stocks continue to trade below all-time highs that were set in late 2021.
With that in mind, I’ve reviewed two top stocks that are both primed for many more years of outperforming the market.
TSX stock #1: Shopify
It’s been an incredibly volatile past several years for one of the largest companies in the country. In fact, it wasn’t long ago that Shopify was the largest stock on the TSX.
The pandemic created a sudden surge in demand for Shopify, which spiked the stock price up. A lot of growth was pulled forward, though, which can at least partially explain the massive pullback in 2022. It’s only natural to see a pullback like that after such a huge run-up.
Shopify (TSX:SHOP) is certainly making a compelling case that its stock price bottomed out earlier this year. The tech giant managed to drop more than 70% in 2022 but has rebounded impressively well in 2023.
Shares may be up more than 100% on the year, but the stock is still down 50% from all-time highs. Investors who are looking to add a top-quality growth stock to their portfolios still have a chance to load up on Shopify at a discounted price.
TSX stock #2: Constellation Software
Constellation Software (TSX:CSU) is one of the few tech stocks not trading at a discount right now. Shares are up 50% on the year and trading just shy of all-time highs. For a mature company nearing a $70 billion market cap, it’s been an incredibly impressive year.
Understandably, revenue growth has slowed in recent years, as the business has matured. Even so, the stock continues to largely outperform the returns of the S&P/TSX Composite Index. Excluding dividends, the index is up just about 40% over the past five years. In comparison, Constellation Software has returned 250%.
At more than $3,000 a share and trading at all-time highs, investors will need to pay up to own this tech stock. But if market-beating growth is what you’re after, there are very few stocks on the TSX that own a market-beating track record like that of Constellation Software.
