How I’d Invest $10,000 in 2019

Investors prepping for an eventful 2019 should look to invest in stocks like Andrew Peller Ltd. (TSX:ADW.A) and Kirkland Lake Gold Ltd. (TSX:KL)(NYSE:KL).

| More on:
think, plan, and act to work towards your financial goals
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

The opening weeks of 2019 have put smiles back on the faces of many investors. The S&P/TSX Composite Index was already up 5% year to date as of close on January 15. Investors that bought the sizable dip in late December have been able to scoop up nice gains.

All that said, there are economic headwinds on the horizon that promise to usher in volatility as we move further into the year. GDP growth in Canada and the United States has been downgraded for 2019, with Canadian growth set to drop to 1.7% for the year. Rising trade tensions are also expected to weigh on global growth.

Today, we will explore the hypothetical of how to invest $10,000 in the current environment. I want to go over two stocks that are worth consideration in January, as investors are forced to adjust to slower growth in domestic and international markets.

Andrew Peller (TSX:ADW.A)

Andrew Peller is an Ontario-based wine-producing company. So-called sin stocks, which include those in the alcohol industry, are appealing targets in a precarious economic environment. To call the alcohol industry “recession proof” is perhaps a step too far, but the wine, beer, and spirits industry proved resilient during the Great Recession.

In fiscal 2008, Andrew Peller reported what were at the time record results. Gross profit margin increased from the prior year, and the company saw normalized net earnings grow 10%. Andrew Peller is expected to release its fiscal 2019 third-quarter results in early February. In the first six months of the year, the company has seen sales rise 10% year over year and adjusted EBIT post 15.4% growth.

Andrew Peller stock was nearing overbought territory as of close on January 15. Value investors may want to await a pullback before stacking early this year, but Andrew Peller is an attractive hold going forward.

Kirkland Lake Gold (TSX:KL)(NYSE:KL)

Kirkland Lake Gold is a Toronto-based gold producer. Shares had climbed 28.5% over the past three months as of close on January 15. Earlier this month, I’d discussed why investors should hold gold equities in their portfolio this year.

The spot price of gold has been static in January as North American indexes have rebounded to start the year, but the yellow metal is still a great bet with economic storm clouds on the horizon. A dovish turn from central banks in Canada and the United States also bodes well for gold. Former U.S. Federal Reserve chairwoman Janet Yellen recently speculated that the Fed had made its last rate hike this cycle in December 2018. A pause on the rate-tightening cycle, or even a potential reversal, is a bullish sign for gold prices going forward.

Kirkland Lake stock has dropped back below overbought territory in January. The company posted record quarterly gold production in Q3 and will benefit massively from higher prices ahead of its Q4 release. The stock also offers a modest quarterly dividend of $0.03 per share, which represents a 0.3% yield.

Conclusion

The early January bump is promising, but I am still approaching 2019 with caution. That is why I want to target recession-resilient stocks like Andrew Peller and hedges in the form of gold equities like Kirkland Lake this year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned.

More on Investing

Cogs turning against each other
Investing

Top 2 Stocks That Could Beat the Recession

Recession-resistant stocks like Dollarama (TSX:DOL) should be on your radar in 2022.

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

The 3 Best Dividend Stocks for Monthly Passive Income

These three dividend stocks are the best options for those seeking high passive income in the next few years in…

Read more »

clock time
Dividend Stocks

Got $10,000 to Invest? 1 Cheap TSX Stock to Buy Right Now

This top TSX dividend stock is finally on sale and has made some savvy buy-and-hold investors quite rich.

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

Want Monthly Passive Income? These TSX Dividend Stocks Are for You

If you want monthly passive income from TSX stocks, you have to do a little digging. I've given you a…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Bank Stocks

The Most Valuable TSX Stock Out There Is up 10% This Month!

This TSX stock is the best value stock out there, expanding even during a downturn and setting itself up from…

Read more »

ETF chart stocks
Dividend Stocks

3 International ETFs to Buy for a Diversified Portfolio

Some international markets may prove more resilient against economic downturns, and exposure to them may strengthen your portfolio during crashes…

Read more »

Payday ringed on a calendar
Dividend Stocks

TFSA Pension: 3 Canadian Dividend Stocks to Buy for Monthly Passive Income

These high-yield Canadian stocks look good to buy right now for a TFSA focused on monthly passive income.

Read more »

A worker uses a laptop inside a restaurant.
Tech Stocks

2 U.S. Stocks Canadian Investors Can Buy and Hold Forever

Blue-chip companies such as Microsoft and Coca-Cola are forever stocks that have the potential to beat the market in 2022…

Read more »