Getting started in the stock market could be very intimidating. However, in my opinion, it’s one of the greatest things anyone can do for their financial well being. It’s been shown that, over the long run, stocks outperform every other asset class. That makes investing in the stock market the best way to try to achieve financial independence. In this article, I’ll discuss three TSX stocks that new investors should consider buying today.
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Start with one of the Canadian banks
In my opinion, all new investors should consider buying shares of the Canadian banks. There are a couple of reasons for this. First, the Canadian banks are very important companies within the Canadian industry. If you look at the largest companies in Canada (by market cap), four of the top eight companies are all banks. In addition, new investors should already be very familiar with these companies. Generally, banks have very simple businesses and nearly everyone relies on one to hold their cash.
If I could only choose one Canadian bank to invest in, it would be Bank of Nova Scotia (TSX: BNS)(NYSE: BNS). What interests me about this company is its focus on international growth. However, if you aren’t a growth-oriented investor, then Bank of Nova Scotia’s dividend history could interest you. The company has been paying shareholders a portion of its earnings in each of the past 189 years. It also offers investors a very attractive forward dividend yield of 5.38%.
Invest in this top company
Canadian National Railway (TSX: CNR)(NYSE: CNI) is the second stock that new investors should consider buying. With nearly 33,000 km of track, this company operates one of the largest railway networks in North America. Canadian National operates from British Columbia to Nova Scotia and as far south as Louisiana. What interests me about the railway industry is how crucial a role it plays in the economy. Currently, there’s no viable alternative to transport large amounts of goods over long distances if not via rail.
Canadian National Railway stock is also notable for being very stable. It has a five-year beta of 0.67. For reference, a stock with a beta of one would mean that it’s as volatile as the broader market. Therefore, Canadian National stock could provide some well-needed stability to your portfolio. This stock is also well known for being an excellent dividend stock. The company has raised its dividend distribution in each of the past 25 years.
Online shopping could be much bigger in the future
If you’re interested in a blue-chip stock that could generate a lot of growth in the future, I’d recommend considering Shopify (TSX: SHOP)(NYSE:SHOP) for your portfolio. It is one of the largest players in the global e-commerce industry. It supports more than one million merchants on its platform. Notable companies that use Shopify include Pepsi and Netflix.
It’s no secret that Shopify stock has struggled this year. In fact, year to date, Shopify stock has fallen 73%. However, despite those struggles, I predict that Shopify stock could still climb from here. Younger consumers are helping drive a shift towards online retail. As that demographic grows to represent a larger portion of the global consumer base, e-commerce companies like Shopify could see a massive boost in revenue.
