Stock market investing can be incredibly exciting but overwhelming at the same time. Becoming a successful stock market investor can be a lucrative career. Many new investors tend to think that stock market investing is a good way to get quick returns on their investment capital. While that is possible, it is crucial to understand that stock market investing is inherently risky.
High-growth stocks tend to be riskier assets than most others on the stock market. Most investors who have made fortunes through investing have taken a long-term approach to invest in equity securities. Creating a well-balanced portfolio that mitigates risk and offers wealth growth is generally regarded as the best way to go.
If you are looking for beginner stocks, it might be better to prioritize investing in blue-chip stocks to set strong foundations for your self-directed portfolio. Today, I will discuss two high-quality, blue-chip stocks that could serve as cornerstones for your investment portfolio.
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Brookfield Asset Management
Brookfield Asset Management (TSX:BAM.A)(NYSE: BAM) is a $104.82 billion market capitalization multinational company. Headquartered in Toronto, it is one of the worldâs largest alternative investment management companies. The company invests in various real assets across several industries worldwide. It is a massive company with assets under management worth US$725 billion.
As of this writing, Brookfield Asset Management stock trades for $67.11 per share and boasts a 1.06% dividend yield. Despite its size, Brookfield Asset Management continues to grow rapidly. The companyâs compound annual growth rate in the last four years stands at a stellar 26%.
Provided it continues to grow at this pace, its assets under management can grow past the US$1 trillion mark in a couple of years. As a beginner, it could be an excellent stock to have in your investment portfolio.
Constellation Software
Constellation Software (TSX: CSU) is a $45.34 billion market capitalization Canadian software company. The diversified software company headquartered in Toronto is in the business of acquiring small- and medium-sized vertical market software businesses. By acquiring smaller companies and helping them grow, the company has grown substantially in value over the last few years.
Led by Mark Leonard, the company plans to start acquiring larger vertical market software businesses soon to take things to the next level. It is too soon to say how the changing tact has impacted its performance. However, successfully executing its strategy could mean stellar growth for years to come.
As of this writing, Constellation Software stock trades for $2,139.45 per share, and it pays its shareholders at a modest 0.24% dividend yield. It could be an excellent addition to your portfolio for long-term wealth growth.
Foolish takeaway
Well-established companies that are typically leaders in their industries tend to serve as pillars of stability in investor portfolios. Strong underlying businesses have stable cash flows and can ride out harsh economic environments better than smaller companies.
It is important to remember that even the best stocks entail capital risk. However, the level of risk with blue-chip stocks tends to be lower than with high-growth stocks.
Investing in Brookfield Asset Management stock and Constellation Software stock could be an excellent way to begin building a strong self-directed investment portfolio.
