We all know that investing is extremely important. We, of course, first need to save our money. But to ensure that our money can grow and, at the very least, outpace inflation, it’s crucial to find high-quality stocks to buy now.
Unfortunately, though, investing can be a time-consuming task. Not only that, but if you’re a beginner investor, there can be a steep learning curve.
That’s not to say that you shouldn’t begin to invest. But it’s understandable the hesitancy that many Canadians have due to their lack of understanding of the stock market and lack of time to do the research.
Fortunately, though, thanks to the massive popularity of the stock market and investment industry, and all the innovation that’s gone on in recent years, there are simple investments that you can buy without spending tonnes of time researching.
Of course, the more research you can do and the more you can learn will always be beneficial. However, these simple investments will allow you to put your money to work quickly.
If you’re a new investor without much knowledge about investing or without much time to research stocks, here are two of the best and simplest stocks to buy now.
What are the best stocks to buy for new investors?
For most retail investors, some of the best stocks to buy will are low-cost index funds.
In fact, Warren Buffett suggests that most investors put the majority of their capital in a low-cost index fund, such as one that tracks the S&P 500.
The reason why an index fund makes so much sense, especially for new investors, is that outperforming these indices by picking stocks on your own is extremely difficult. Plus, not only is it difficult, but it can require hours of research before you even make your investments. Not to mention all the time you have to spend monitoring these investments after you own them.
Furthermore, in addition to how difficult it is for retail investors to outperform these indices, there are several investment professionals that struggle to outperform the market on a consistent basis.
Therefore, especially for investors who don’t have the time to research, just getting your money into the market and finding an ETF to buy that offers you exposure to several different stocks is one of the best ways to invest right now.
What are some of the best index funds to buy?
There are several different indices to consider, including ones that only track stocks in certain industries. However, if you’re just starting out, you may want to consider an index that’s well diversified and tracks the total market.
This is why Warren Buffett’s main recommendation is an investment in a fund that offers exposure to the S&P 500. For Canadian investors, one of the best and simplest stocks to buy now is iShares Core S&P 500 Index ETF (CAD-Hedged) (TSX: XSP).
The XSP offers exposure to several of the best stocks in America and, therefore, the powerful American economy. And while the XSP may sound like a boring investment, over the last five years, it’s earned investors a total return of 75%. That’s not bad for a simple investment that beginner investors can easily buy.
In addition to the XSP, another one of the best stocks to buy now would be an index tracking Canadian stocks, such as iShares S&P/TSX 60 Index ETF (TSX: XIU).
The XIU offers investors exposure to 60 of the largest and most dominant stocks in Canada; it’s diversified across each of the 10 major sectors.
So, if you’re a new investor and want to put your money to work to grow it meaningfully over the long run and avoid losing value to inflation in the short term, the XSP and XIU are two of the simplest stocks you can buy now.
