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Got $500? 3 Ridiculously Cheap Growth Stocks That Could Help You Retire Rich

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Growing plant shoots on coins
Growing plant shoots on coins

Written by Nicholas Dobroruka at The Motley Fool Canada

The S&P/TSX Composite Index is coming off a week where it lost close to 5%. The index is now sitting at a loss of more than 10% year to date. Still, the Canadian stock market has fared far better than the major American indices.

Despite the recent volatility, the stock market is still one of your best bets for building long-term wealth. Unfortunately, the ups and downs of the stock market is the price of entry to investing.

As long as you’re willing to withstand the occasional bear market and have a long-term time horizon, the volatility in the stock market today is no reason to sit on the sidelines.

Buying growth stocks in a bear market

I’ve continued to invest my money on a regular basis throughout the year. Because I don’t plan on selling my individual holdings for decades to come, I’m perfectly fine adding to a high-quality business, even as its stock market continues to plummet.

I’m much more focused on the condition of the business itself, rather than the stock price. If the company is still firing on cylinders, despite the stock price dropping, I’m still willing to be a buyer.

Here’s a basket of three discounted growth stocks that I’ve got at the top of my watch list today. The best part is that you can own all three companies for less than $500 at today’s prices.

Air Canada

Airline stocks are certainly not known for delivering market-crushing gains. Air Canada (TSX:AC), however, is an exception to that. Prior to the COVID-19 pandemic, Canada’s largest airline had been a consistent market beater over the previous decade.

Today, Air Canada is trading close to 70% below pre-pandemic prices. The airline stock has been trading sideways for close to the past two years.

With summer officially about to begin, we’re already beginning to see demand for air travel ramp up.

Growth investors that are looking to go bargain hunting should have Air Canada on their radar. I don’t think it will be long before the airline stock is back to all-time highs.

No shortage of tech stocks on sale

Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) and Shopify (TSX:SHOP)(NYSE:SHOP) are just two of many tech stocks that have experienced massive selloffs over the past year. Both companies have seen stock prices drop by more than 70% since June 2021.

Two things are important to note here. First, it’s not all that uncommon for a high-quality growth stock to experience drops of 70% or higher in its lifetime. Second, the selloffs of Shopify and Lightspeed have been largely caused by shifts in the market, rather than any significant negative news surrounding the companies.

Over the past year, in both the Canadian and American stock markets, we’ve witnessed a change in investing behaviour. Many investors are no longer willing to pay a premium for top growth stocks trading at nosebleed valuations. As a result, it has caused many steep declines in the tech sector over the past year.

If I was investing for the short term, Shopify and Lightspeed likely wouldn’t be on my watch list. It’s anybody’s guess as to how much longer this bear market will last. But for someone that’s looking to make some serious progress on their long-term savings, these two growth stocks are solid buys today.

The post Got $500? 3 Ridiculously Cheap Growth Stocks That Could Help You Retire Rich appeared first on The Motley Fool Canada.

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Fool contributor Nicholas Dobroruka has positions in Lightspeed Commerce and Shopify. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Lightspeed Commerce.

2022

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