Building a stock portfolio can be a fun experience. However, as a new investor, you’ll get a lot of information thrown at you. That could make building a portfolio more difficult than it has to be. In my opinion, the most important things to consider are whether a company’s business is easy to understand and if it’s a leader in its respective industry. By focusing on those two aspects, new investors could put themselves on the right track. If I had to start my portfolio over today, I’d buy these three TSX stocks.
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This asset manager is a great choice
Brookfield Asset Management (TSX:BAM.A)(NYSE: BAM) is the first company that I would add to my new stock portfolio. It operates a portfolio with more than US$750 billion of assets under management. Through its subsidiaries, Brookfield has exposure to the infrastructure, insurance, real estate, renewable utilities, and private equity markets.
Investors should take note of Brookfield’s chief executive officer (CEO), Bruce Flatt. Known for his long tenure as CEO, value investing style, and large ownership stake in the company, Flatt is often referred to as Canada’s Warren Buffett. Flatt is also known for being a long-time proponent of real assets. These are assets which have intrinsic value due to their properties. He believes that real assets could be worth much more in the future, and this has been reflected in Brookfield’s portfolio. As long as Flatt is leading the way, I’d be very confident in this company.
A top tech stock for your portfolio
The next stock I would buy for my new stock portfolio is Constellation Software (TSX: CSU). This company is an acquirer of vertical market software businesses. Upon completing an acquisition, Constellation Software will provide the acquired business with the coaching and resources required to help transform it into an exceptional business unit. To identify the best acquisition targets, Constellation Software follow strict guidelines. Over the years, its acquisition strategy has proven to be very successful.
Like Brookfield, Constellation Software’s business is led by an exceptional executive. In fact, Mark Leonard may be one of the most impressive executives that you’ve never heard of. A former venture capitalist, he could be the perfect person to have founded a company like Constellation Software. Although Leonard doesn’t publish letters to shareholders on a consistent basis anymore, his most recent letter shows his continued dedication to making sure Constellation Software stays as competitive as ever.
Invest in the Canadian banks
Finally, I would buy one of the Canadian banks. In terms of safe investments, the Canadian banks are likely as safe as it could get. This industry is very highly regulated. That makes it difficult for competitors to surpass the industry leaders. It also gives companies a margin of safety, because they wouldn’t be able to operate as recklessly as companies that don’t have to face as many regulations. Of all the Canadian banks available to investors, my top pick is Bank of Nova Scotia (TSX: BNS)(NYSE: BNS).
In my opinion, Bank of Nova Scotia sets itself apart from the other Canadian banks via its focus on international growth. Uniquely positioned in the Pacific Alliance, Bank of Nova Scotia hopes to take advantage of the growth expected to come in the countries of Chile, Columbia, Mexico, and Peru. In addition, Bank of Nova Scotia is a tremendous dividend stock. It has distributed a dividend to shareholders in each of the past 189 years. This is a stock that both growth and dividend investors could find attractive.
