The 5-Stock Diversified Portfolio: Where Equity Investors Can Start

With so many fantastic names available to investors, the best value may be found in shares of Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM).

For many new investors (and some veterans alike), the equity markets are sometimes very daunting, as stock values can fluctuate wildly, making investors feel less than comfortable. In spite of this, a well-thought-out portfolio may only need five stocks to perform very well over the long term. Here they are:

The first stock that investors can buy and hold under all market conditions is none other than Canadian National Railway (TSX: CNR)(NYSE: CNI), which, at a price of $100 per share, offers a dividend yield of 1.8%. What makes this name such a fantastic long-term hold is the unique footprint (the railways) of the company. Goods are moved and delivered to larger centres and smaller communities alike. By holding this essential company, it is difficult to go wrong over the long term.

The second name on the list is none other than Canadian Imperial Bank of Commerce (TSX: CM)(NYSE: CM). As the smallest of Canada’s Big Five banks, CIBC still has a substantial amount of room for growth. At a price of $112 per share, the dividend yield is no less than 4.75%, which will only account for a part of the return. With a focus on share buybacks, investors can continue to expect big things from this name.

The most volatile name on the list, which investors can underweight if necessary, is Canopy Growth Corp. (TSX: WEED). At $30 per share, Canopy may seem like a gamble. Although the legal marijuana market has yet to take shape, investors can still enjoy the capital appreciation from this name over the next few years, as the market takes shape and, of course, expands at a very high rate. As marijuana becomes legal, and the taboo of smoking it dissipates, more customers are expected to come into the market.

For a diversified portfolio, investors will want to add a few U.S. securities. After numerous food safety concerns, Chipotle Mexican Grill, Inc. (NYSE: CMG) seems to have put the bad news in the past with the most recent earnings report. Top-line revenues finally increased, and the share price once again gapped up substantially. With the share price crossing over the 200-day simple moving average, this name may once again be ready to run.

To round out the list, shares of Apple Inc. (NASDAQ: AAPL) continue to offer investors substantial upside at a price of $184 per share (near another 52-week high). Although many have experienced investor fatigue after hearing about this name over and over for close to a decade now, the truth remains that it is one of the best-performing names in the market. Investors may be wise to overweight this name over the next decade, as the dividend has steadily increased and is expected to do so repeatedly in the coming years.

Fool contributor Ryan Goldsman owns shares of Canadian National Railway. David Gardner owns shares of Apple, Canadian National Railway, and Chipotle Mexican Grill. Tom Gardner owns shares of Chipotle Mexican Grill. The Motley Fool owns shares of Apple, Canadian National Railway, and Chipotle Mexican Grill and has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. Canadian National Railway and Chipotle Mexican Grill are recommendations of Stock Advisor Canada.

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