The beginning stages of an investing journey can be daunting at times. One thing that I’d urge new investors to keep in mind is that investing does not need to be overly complicated — especially in the beginning, as overcomplicating things can lead to losing interest and permanently rejecting the idea of investing in stocks.
For anyone that has a long-term time horizon and is willing to be patient, the stock market can be a massive wealth generator. Of course, it can also have the reverse effect if not taken seriously. But for those willing to remain patient and avoid making rash decisions, the stock market can be an excellent place to put your money to work.
Building a portfolio from scratch
When building out an investment portfolio, diversification should be top of mind. If you plan on investing in individual stocks, I’d consider sprinkling in a few well-diversified exchange-traded funds (ETF). They may cost a small fee to own, but the diversification that an ETF can provide a portfolio with is priceless.
For some investors, owning ETFs is as far as they’ll go. And there’s absolutely nothing wrong with that. But for those willing to put in the time and have a more hands-on approach to their investment portfolio, owning individual stocks is the logical next step.
Fortunately, there’s no shortage of TSX stocks with impressive track records of delivering market-beating returns. I’ve reviewed two of which companies that are perfect for growth investors that are willing to hold for the long term.
Growth stock #1: goeasy
Growth investors looking for a bargain might not find a better deal than goeasy (TSX:GSY).
With the high-interest-rate environment cooling demand for personal loans, the consumer-facing financial services provider has found itself trading at a massive discount. Shares are down close to 40% from all-time highs that were set in late 2021.
Even with the recent pullback, shares of goeasy have still largely outperformed the market as of late. The growth stock is up more than 150% over the past five years. In comparison, the S&P/TSX Composite Index has returned less than 30%, excluding dividends.
Investors may need to act fast if they’re hoping to take advantage of this discount. Shares of goeasy are up close to 50% since May, well on their way to new all-time highs.
Growth stock #2: Constellation Software
At a price tag nearing $3,000 a share, Canadians will need to pay up to own one of the largest tech stocks on the TSX. For those willing to shell out the cash, though, this is as dependable a growth stock around.
Despite Constellation Software’s (TSX:CSU) huge market cap size that’s now above $50 billion, the stock continues to deliver market-crushing returns. Shares are up close to 200% over the past five years, easily outpacing the broader market’s return.
Many Canadian tech stocks have found themselves trading at discounts after a loss-filled year in 2022. Not Constellation Software, though. The company managed to end last year just about flat. And with a 30% return year to date, shares are trading just shy of all-time highs.
It may be a high price to pay, but there’s a lot to like about this dependable tech company.
