If you’re one of the new investors looking to get into the market right now, it can be super daunting. The market remains down, and it certainly could get worse before it gets better. I have no crystal ball, and I won’t pretend to.
What I can say is that right now is a great time to buy safe stocks that you can use to turn any Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) into your long-term goals far faster.
In fact, I’ll show you exactly how you can do that.
Find the right sector
Before you start investing, you want to be sure you’re getting into the right sector in general. Economists continue to recommend infrastructure stocks as one worth targeting. New investors should certainly consider this sector as well for their TFSA or RRSP for solid protection.
The reason you get that protection is because infrastructure remains essential no matter what the world does. We need to make coffee, go to work, have a shower. All of this is powered by infrastructure. If it breaks, you fix it. If you need more, you make it. There’s no way around it.
Find the right stock
But then you have to sift through all the infrastructure stocks out there to find the right one! But don’t worry, I’ve done the heavy lifting for you, and would recommend a company like Brookfield Infrastructure Partners LP (TSX:BIP.UN).
Brookfield invests in infrastructure assets all around the world. What’s more, it doesn’t stick to just water or just energy. It invests in it all. This creates a diversified portfolio that continues to offer you protection, even if we enter a recession.
And the best part? Right now is a great time to buy. Brookfield is down about 2.5% year to date. This is after climbing to all-time highs earlier this year. From that point, it’s down about 13%. So it’s a great time to jump in on the stock. Especially since in the last decade alone, it’s climbed 460%!
Make that money
So if you get in on that downturn action, in the next year you could see your Brookfield shares in your TFSA or RRSP return to all-time highs. If you put, for example, $20,000 into BIP.UN shares, that would turn your investment into $23,441 alone. Then, add on top of that the dividend income from a 4.04% yield, and you’ve gained another $805.56. That’s a total return of $4,246.56 in just a year!
But you’re thinking long term. So let’s say you then took those dividends and reinvested back into your TFSA or RRSP. You do that again and again for the next 30 years, setting it and forgetting it. In that time, you could turn your TFSA or RRSP into a whopping $6,169,112 based on historic data over the last decade!
Bottom line
New investors should be using this downturn to their advantage. By doing so, you could create a massive portfolio in your TFSA or RRSP. All from investing in a safe stock and using dividends to reinvest again and again. By doing so, you’ll be setting yourself up for life.
