Investing is essential to help you reach your financial goals, but also to ensure that your savings aren’t being eroded by inflation. In addition, new investors should start investing and buying stocks as early as possible to give themselves the longest timeline for their money to grow and compound.
Even if you have just a small amount of money, you’ll want to get started by investing in a few different stocks to diversify your capital. Diversification is key. Just like thorough research, it helps to lower the risk that you lose capital. Plus, diversifying your investments also exposes you to more stocks and more opportunities to potentially grow your capital significantly.
So, if you’re a new investor, here is a simple and easy example of a five-stock portfolio to help get you started.
You’ll want to buy reliable and defensive investments as your core portfolio stocks
One of the first stocks for new investors to consider is Fortis (TSX:FTS), one of the safest and most defensive stocks in Canada. Fortis is a utility stock that provides gas and electricity services. These utilities are essential for consumers; plus, they’re regulated by governments, making Fortis’s operations highly reliable and its revenue extremely predictable.
In fact, Fortis is such an impressive and reliable stock that it has the second-longest dividend-growth streak in Canada, with a whopping 49 years of dividend increases.
And Fortis plans to increase its dividend, which currently offers a yield of 4.1%, by 4-6% annually through 2027.
Enbridge (TSX:ENB) is another excellent company to buy as a core portfolio stock. With fewer regulated assets than Fortis, it’s technically a higher-risk stock. However, Enbridge’s operations are also essential to the North American energy industry, making it another highly reliable and defensive stock.
It also has a lengthy dividend-growth streak of more than a quarter century. Plus, its dividend currently offers a yield of 6.9% and, at most, is expected to have a payout ratio of 68% of its distributable cash flow this year, making it an ideal stock for safe and reliable dividend growth.
Finally, Brookfield Infrastructure Partners (TSX:BIP.UN) is an ideal core portfolio stock, since it offers an attractive mix of both defence and long-term growth potential.
The stock owns a portfolio of some of the most reliable and essential infrastructure around the world, such as utilities, railroads, ports, data centres, telecommunications towers, and much more.
Plus, Brookfield is constantly looking to recycle capital and invest in new opportunities to increase value for investors. And, of course, it also pays a dividend with a current yield of roughly 4.4%, but, more importantly, it aims to increase its distribution by 5-9% every single year.
All three of these stocks have reliable operations while paying an attractive and growing dividend, making them excellent core portfolio stocks to buy and hold for decades.
Two top growth stocks to buy for your portfolio
There are plenty of high-quality growth stocks that new investors can consider, but an ideal investment for this sample five-stock portfolio is goeasy (TSX:GSY), a specialty finance stock.
goeasy is an attractive investment, because it’s still relatively small and has attractive economics, giving it significant long-term growth potential. In fact, over the last five years, goeasy investors have earned a total return of more than 270%.
Another compelling reason to buy goeasy stock is that while it still has room to grow, it’s already well established and profitable, allowing it to pay a growing dividend that currently offers a yield of more than 3%.
Lastly, because we already have such high-quality and reliable stocks that each pay a dividend, we can look to buy a higher-risk, higher-reward tech stock like Shopify (TSX:SHOP).
Shopify is the stock that easily offers the most growth potential for investors in this five-stock portfolio. It’s still in the growth stage and continues to spend money to expand and improve its operations.
Because of its growth potential, though, and the disruption that its industry, e-commerce, is creating, Shopify is one of the best growth stocks that Canadian investors can buy.
If you’re looking to start investing soon, this simple five-stock portfolio shows you how easy it can be to diversify your money and start putting it back to work for you.