I’m a firm believer that investors under the age of 30 should be growth investors first and foremost and avoid fixed-income products until they reach an older age. For younger investors who are at least three decades away from retirement, the focus should be on long-term growth and capital appreciation. Sure, it’s nice to add a few income stocks into the mix, but your focus should be on accumulation and reinvestment of dividends, and not living off the income received. This way, your portfolio can snowball at a quicker rate, and if you’re disciplined enough, you’ll inevitably hit the $1…
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I’m a firm believer that investors under the age of 30 should be growth investors first and foremost and avoid fixed-income products until they reach an older age. For younger investors who are at least three decades away from retirement, the focus should be on long-term growth and capital appreciation.
Sure, it’s nice to add a few income stocks into the mix, but your focus should be on accumulation and reinvestment of dividends, and not living off the income received. This way, your portfolio can snowball at a quicker rate, and if you’re disciplined enough, you’ll inevitably hit the $1 million mark at some point. In fact, if you’re disciplined, it’d be quite hard not to surpass the $1 million mark over the course of the next few decades.
If you are a young investor interested in long-term growth, just make sure you don’t make impulse decisions when the markets get volatile, because the next correction is around the corner. Like it or not, nobody knows when, but volatility is going to arrive, and you need to be prepared with cash on the sidelines to capitalize on the sales!
Here are four solid growth stocks that every young Canadian should include at the core of their portfolio (many of them are core holdings in my personal portfolio):
Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR)
RBI has an incredible management team that’s always looking for ways to return long-term value to shareholders. Whether that’s through same-store sales growth initiatives, expansion opportunities, cost-cutting, or acquisition of other brands in the fast-food space.
RBI carries a lot of debt, but given the predictable nature of future cash flows, the debt load is nothing to be worried about. The brands that RBI owns are extremely powerful, and they’ve got a loyal fan base, which allows RBI to trade more like a staple rather than a cyclical stock.
This is truly a stock that you could buy now and forget about for decades, as the company takes over the fast-food world one chain at a time.
Spin Master Corp. (TSX:TOY)
Spin Master is more than just an emerging Canadian toy company. With the amount of innovation coming from the company’s product pipeline, you’d swear it was a tech company.
With the incredible usage of robotics in toys like Hatchimals, Luvabella, and PAW Patrol, you could think of Spin Master as a consumer products tech play.
Although toy companies are susceptible to effects of seasonality, the stock has been on a steady upward trend thanks to the company’s incredible portfolio of toys, which are in demand all year round, not just during the holiday season.
BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY)
Based on the stock chart, BlackBerry has had its day and will never return to such highs. But I don’t think that’s the case at all.
BlackBerry is out of the hardware business and is in the software business with an emphasis on cybersecurity.
BlackBerry’s QNX operating system could be the go-to safeguard for the self-driving cars of the future, and if that’s the case, I think BlackBerry can rebound, but investors are going to need to be patient, as self-driving cars may not be the norm until more than five years from now.
Alimentation Couche Tard Inc. (TSX:ATD.B)
Couche Tard is an M&A superstar which has recently taken a breather to digest its recent CST Brands deal. The stock has underperformed due to a plague of short-term concerns and speculation that self-driving cars will hurt the company’s top line.
While such long-term concerns are interesting food for thought, I do not believe the company will fall as gas-fueled vehicles do. In fact, I think Couche Tard will continue to thrive, as it consolidates the fragmented c-store industry.
The c-store of tomorrow will be different than the one that we’ve grown accustomed to over the last few decades.
Stay smart. Stay hungry. Stay Foolish.
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Joey Frenette owns shares of Restaurant Brands International Inc., Alimentation Couche Tard Inc. and Spin Master Corp. The Motley Fool owns shares of RESTAURANT BRANDS INTERNATIONAL INC. Alimentation Couche Tard Inc. and Spin Master Corp. are recommendations of Stock Advisor Canada.