All investors want to earn some passive income, if not today, then eventually. In a similar manner, most investors realize the long-term importance of diversifying their portfolios. Unfortunately, constantly adjusting portfolio investments for market shifts isn’t something that most investors want. This is particularly true for those of us that adhere to lazy investing.
Don’t get me wrong; I am totally into lazy investing. And what I mean by that term is that I prefer to find those stellar investments that I can buy now and not worry about for a decade. To put it another way, I want my money to work for me rather than constantly chasing that next big thing.
Fortunately, the market has plenty of options to consider for all investors considering the art of lazy investing.
Hop on the growth train and order some income
It never ceases to amaze me how many investors continue to bypass Canadian National Railway (TSX: CNR)((NYSE: CNI). At first glance, it’s easy to see why. Railroads are perceived by many as older tech that is slow moving and out of touch with today’s modern world.
In a similar vein, income investors may see Canadian National’s quarterly yield of 1.74% as decent but not exactly a stellar buy. For example, there are some stellar income stocks that pay well over 4% or even 5% in some cases.
Both couldn’t be further from the truth.
On the growth front, despite its age, rail remains the predominant method for hauling freight across the continent. Rail hauls more freight further than other means. In the case of CN, that rail network extends from coast to coast and down through the U.S. Midwest to the Gulf region.
In total, CN hauls upwards of $250 billion worth of goods each year. That makes CN an arterial vein of the entire continental economy, which is a superb holding to have in your portfolio.
Turning to income, CN’s yield may be lower, but the stock has provided generous annual upticks for well over a decade. Additionally, factoring growth into the total return pushes CN’s CAGR well into double-digit territory.
In other words, CN is a great stock for lazy investing.
Buy a stock that continues to expand and pay
Canada’s big banks are some of the best stocks on the market. They continue to post solid earnings and offer some of the most stable dividends on the market.
In many ways, it’s hard to tell the big banks apart. All of them boast handsome dividends and superb growth. They also have expanded outside of the domestic market in Canada to provide a sense of diversification. But there are subtle differences to note, and that’s why your lazy investing portfolio needs Bank of Montreal (TSX: BMO)(NYSE: BMO).
On an income front, BMO is hard to beat. The bank has been paying out dividends since 1829 without fail. That’s an incredible history that is unbeatable on the market. It also helps that the current yield amounts to a juicy 3.58%.
Turning to growth, the bank recently announced a whopping US$16.3 billion deal to acquire Bank of the West. This will help BMO expand its reach into the U.S. market outside of the Chicago area it currently operates and into California. To put it another way, the deal will add millions of customers and billions to the bank’s portfolio.
Buy it, hold it, and let it grow.
Lazy investing: Start today
Despite the appeal of both stocks mentioned above, it’s worth noting that there’s no such thing as a stock that doesn’t have at least some risk. Now, fortunately in the case of the stocks noted above, that risk remains small.
In my opinion, all the stocks noted above are great candidates for your lazy investing portfolio. Buy them today, hold them for a decade or more, and let your portfolio grow.
