Any time you decide to start saving and investing your money, you’re making an excellent choice. Saving and investing is crucial to building up your capital for later in life. So the sooner you begin to do it, the better a position you’ll be in over the long term. One of the toughest challenges that new investors face is figuring out which ones are the top stocks to buy now.
Investing your money is one of the safest and best ways to grow your capital, especially if you do it with discipline and patience over the long run.
Plus, there are lots of high-quality stocks to own, particularly if you are just getting into investing. So deciding the first few stocks to buy is important. Here are some things to consider.
Tip for new investors to remember
Of course, deciding what stocks you want to buy now is crucial. However, it almost doesn’t matter which stocks you buy first if you’re buying for the long term and planning to continue saving and diversifying your money.
With that said, ideally, anytime you buy stocks you want to buy the ones that are the most undervalued at the time. However, before we even begin to think about what stocks we want to buy, investors need to decide which online brokerage they want to use.
There are several online brokerages in Canada to choose from, whether it’s low cost you’re looking for or ones that provide tonnes of data and information. My suggestion for investors is to consider a brokerage that offers a tonne of data, especially if you’re new.
Choosing a more expensive online brokerage from a bigger bank with a large capital markets division, such as Toronto-Dominion Bank, can have major benefits. Often investors focus mostly on the cost of the trade. This can be important, but it doesn’t necessarily tell the whole story.
First of all, $10 trades aren’t that expensive, if you invest for the long-term because you shouldn’t be making that many trades to begin with.
Furthermore, these brokerage platforms often provide free analyst reports for investors. Reading analyst reports can be quite helpful, especially for new investors to learn about the industry and which top stocks to buy now.
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Why new investors should read analyst reports
If you’re a new investor, I highly suggest reading analyst reports whenever you can and certainly whenever you’re researching a stock. There are tonnes of benefits to reading analyst reports, and in my view, they are one of the best ways to learn about the industry.
Investors will learn how investors react to news and developments of the stock. You can learn about the company and all its operations and developments. It’s also a great way to learn specific terms and figures used in the industry. Plus, you can learn the metrics the analysts and the market use to value the stock.
And analysts, of course, make price estimates too. So there’s a lot you can learn about a business, its industry, and investing in general by simply reading analyst reports.
A top Canadian stock to buy now
For those investors looking for a top stock to buy now, I’d strongly encourage you to consider InterRent REIT (TSX:IIP.UN).
Now is the perfect time to buy InterRent while it’s still decently cheap and before it continues on its recovery rally. InterRent is a residential real estate trust and one of the top growth stocks in the entire real estate industry.
While its business hasn’t been impacted that badly over the last year, its stock was sold off quite a bit. So even though InterRent has been rallying for months now, investors still have the opportunity to buy the stock for less than it was before the pandemic.
Having the opportunity to buy InterRent undervalued is something that shouldn’t be taken for granted. Over the last decade, InterRent unitholders have earned a total of roughly 1,100% or a compound annual growth rate (CAGR) north of 28%.
So when you can buy the stock undervalued, you have the potential to increase your total return even more before it returns to fair value.
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 Daniel Da Costa owns shares of INTERRENT REAL ESTATE INVESTMENT TRUST.