Are you new to investing? All the volatility in the stock market might feel overwhelming right now. As of this writing, the S&P/TSX Composite Index is down by 10.7% from its 52-week high. Several sectors of the Canadian economy have been weak for multiple months. Growth-seeking investors have had a particularly hard time finding reliable assets on the stock market.
Rising stock market volatility keeps plaguing investors, and there is a possibility of a stock market crash on the horizon if economic challenges persist. As someone new to investing, it is important to remember the critical role diversifying your portfolio can make for you. There’s a lot to be excited about with stock market investing.
The promise of accumulating a lot of money by the time you retire through your self-directed portfolio makes stock market investing attractive. However, investing is inherently risky. There is no way to determine where the market will head next. Exposure to relatively safer Canadian dividend stocks might be a good way to allocate a portion of your investment capital right now.
Today, I will discuss two potentially inflation-beating dividend growth stocks you can consider adding to your self-directed portfolio if you’re worried about the impact of a market downturn.
Fortis
Fortis Inc. (TSX:FTS)(NYSE:FTS) is a $28.3 billion market capitalization utility holdings company. It owns and operates several natural gas and electricity utility businesses across Canada, the US, the Caribbean, and Central America. The company provides essential services to around 3.4 million customers.
Fortis generates most of its revenue through rate-regulated and long-term contracted assets, creating predictable and virtually guaranteed cash flows.
As of this writing, Fortis stock trades for $59.08 per share and boasts a 3.62% dividend yield. The company’s predictable cash flows and defensive nature could make it an excellent buy-and-hold investment for all market environments.
Fortis is also a Canadian Dividend Aristocrat with a 48-year dividend growth streak. It looks well-positioned to continue delivering dividend hikes for several years. This diversified electric utility is a staple presence in the portfolios of many seasoned investors and might be an excellent addition to your beginner portfolio.
Toronto-Dominion Bank
Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is a $156.6 billion market capitalization Canadian multinational banking and financial services company headquartered in Toronto. A part of the Big Six Canadian Banks, TD Bank is a pillar of stability and reliability in the Canadian stock market.
Broader market weakness has resulted in TD Bank losing steam on the stock market this year. As of this writing, TD Bank stock trades for $86.13 per share, down by 21% from its 52-week high.
A downturn like this should typically concern investors. However, TD Bank stock has been a strong performer for almost two centuries. It is a top retail bank in Canada and the US, and is expanding its presence in the US through acquisitions.
The Canadian bank stock is well-positioned to achieve further economic and business diversification, gearing for stellar long-term growth. It has also raised its shareholder dividends for the last 15 years.
TD Bank stock boasts a juicy 4.13% dividend yield. It could be an attractive addition to your self-directed portfolio at current levels.
Foolish takeaway
Most investors should have some exposure to safer TSX stocks in their investment portfolios. Creating a well-balanced self-directed portfolio can help you mitigate losses during market downturns and enjoy wealth growth during bull market conditions.
High-growth stocks might make for more viable investments during bull markets, but failing to balance your portfolio with “boring” and defensive assets could spell bad news during downturns.
Suppose you are worried about a stock market crash but have yet to add defensive businesses to your portfolio. In that case, you might want to consider adding Fortis stock and TD Bank stock to your self-directed portfolio.
