There are new investors starting their financial journeys every day. For many, it’s difficult to determine which stocks they should hold in a portfolio. This is because most people were never formally taught about stocks. Fortunately, there are many resources, like The Motley Fool, that can help unravel some of the mysteries surrounding this seemingly confusing topic. In this article, I’ll discuss three stocks I’d buy today if I were a new investor.
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Start with dividend stocks
As a new investor, I believe the best way to start is by looking at dividend stocks. These stocks generally won’t grow as much as a growth stock would. However, they do tend to trade with less volatility. As a new investor, that can be very important as you start to get used to the day-to-day changes that you’ll see in your portfolio. In my opinion, the more stable your portfolio is, the easier it’ll be for investors to continue adding money to it. Dividend stocks could help with that stability.
When it comes to dividend stocks, Fortis (TSX: FTS)(NYSE: FTS) stands out as an excellent company. It’s known as a Dividend Aristocrat. In Canada, that means that the company has managed to increase its dividend distribution in each of the past five years. Fortis has increased its distribution in each of the past 47 years. That gives it the second-longest active dividend-growth streak in the country. If you’re interested in a dividend stock, Fortis is one you should consider for sure.
Look for companies you recognize
Another way investors can find stocks to hold in a portfolio is by looking at the companies they interact with on a daily basis. Generally, the companies that you rely on would be a good company to consider for your portfolio, because you know that their businesses are in high demand. This could result in further growth by the company, as long as it continues to execute at a high level.
Canadian National Railway (TSX: CNR)(NYSE: CNI) isn’t a company that most Canadians will use first-hand. However, it should be a company that’s recognized by nearly all Canadians. In Canada, the railway industry is dominated by two companies, and Canadian National is by far the larger of the two entities. Canadian National is also an excellent dividend company. It has increased its distribution in each of the past 25 years. If you’re looking for a company that has strong recognition and a stable dividend, Canadian National is a stock for you.
Buy shares of companies that dominate multiple industries
Finally, investors should look for companies that dominate more than one industry. This is important because it gives companies more avenues to success. One company that has this characteristic is Telus (TSX: T)(NYSE: TU). This company is known as one of the major telecom companies in Canada. In fact, it operates the largest telecom network, providing coverage to 99% of the Canadian population.
However, Telus’s business doesn’t end there. It’s also established itself as a formidable competitor in the healthcare industry. Telus provides many services to healthcare professionals and even provides personal care solutions. Telus’s healthcare business may not be very well known today, but that could change as the telehealth industry continues to grow.
