On the one hand, there is still a lot of uncertainty in both the economy and the market. Many of the themes that drove stocks higher in 2025 are starting to cool, whether that’s the gold price rally or the AI boom losing some momentum.
On the other hand, interest rates are finally coming down, and investors and economists alike expect further rate cuts in 2026, which should support stock prices in the long term.
That’s why being selective is more important today than ever. You don’t want to pay too much for stocks, and finding high-quality companies trading at attractive valuations is always ideal.
At the same time, a stock that trades at fair value and has strong long-term growth potential is often a better investment than a mediocre company that looks cheap. If you’re lucky, a discount can only be closed once, while a high-quality company that continues to grow can compound returns for years to come.
That’s what long-term investing is really all about. You don’t need dozens of shares or perfect timing. Owning a small number of exceptional companies and growing them over time is often the most effective way to build wealth.
With that in mind, here are my top two TSX stocks to buy as we head into 2026, stocks to hold for the long term.
An ultra-cheap residential REIT
While most stocks on the TSX are trading at or above their fair value, a handful of high-quality names still offer investors a significant opportunity. So if you’re looking for a top TSX stock that’s trading incredibly cheap right now, Canadian Apartment Properties REIT (TSX:CAR.UN) is one I would recommend.
CAPREIT, as it is known, is the largest residential REIT in Canada, with a vast and highly diversified portfolio of apartment buildings across the country.
What makes CAPREIT one of the best TSX stocks to buy now and hold for the long term is that residential real estate is about as reliable as it gets. People always need a place to live, which is why CAPREIT has been able to generate consistent cash flow in virtually any market environment.
That’s why the fact that you can gain exposure to a high-quality and diversified residential portfolio across Canada at a deep discount is such an important opportunity.
In fact, CAPREIT currently trades at a forward price-to-adjusted-funds-from-operations (P/AFFO) ratio of just 15.4 times. Not only is that well below the five- and 10-year averages of 22.9 and 23.5 times respectively, but it’s also essentially the lowest valuation CAPREIT has had in more than a decade.
So not only is CAPREIT trading at the cheapest valuation it has seen in years, but with interest rates expected to continue falling into the new year, the economic outlook should become a major tailwind for REITs going forward.
Many other high-quality Canadian REITs have already started to recover and rise. So while the largest and most diversified residential REIT is still trading so cheaply and offering a yield of over 4.2%, it’s easily one of the best TSX stocks to buy right now.
One of the best TSX stocks to buy now and hold for decades
Besides CAPREIT, there’s another top TSX stock to buy right now Brookfield Renewable Partners (TSX:BEP.UN).
Like CAPREIT, Brookfield is another stock that will benefit significantly if rates fall. However, its appeal goes far beyond the macro background.
There’s no doubt that renewable energy is one of the best long-term sectors for investors to gain exposure to. And while there are plenty of green energy stocks to consider, Brookfield is hands down one of the best ways to do so.
The company owns and operates renewable energy resources around the world, and that global diversification is a major advantage. It reduces risk, makes cash flow more resilient and gives Brookfield exposure to growth opportunities in multiple regions rather than relying on a single market.
So if you’re looking for a top TSX stock to buy now, Brookfield not only offers decades of growth potential; it also pays to wait with an attractive, growing and sustainable dividend yield of 5.6% today.
#TSX #stocks #buy