Even a relatively small amount, like $1,000, is enough to get started investing. Though it may not seem like all too much when it comes to financing your future retirement, it’s important to note that every bit does count. And though the power of compounding over the course of many years (or decades), even a seemingly small amount can translate to a lot if you invest in the right companies.
Indeed, it’s tempting to take a chance on speculative penny stocks or any sort of overvalued momentum play if you’re a new investor looking to put your first $1,000 (or less) to work. Though such speculation could grow your invested principal quickly, you may also run into quick losses and lose confidence in your ability to beat the markets over time.
There’s nothing wrong with index investing. In fact, it’s a great way for beginners to obtain broader exposure to what the market has to offer. Indeed, if you have a smaller amount of cash to invest, index investing and exchange-traded funds (ETFs) are excellent places to look. For those who want to follow in the footsteps of their investment idols (think Warren Buffett and the late Charlie Munger) and have the time to put in the homework, it’s more than worthwhile to pick your own stocks.
In this piece, we’ll look at two stocks that I view as cheap and ripe to pick for a new investor eager to get started investing!
Value investing isn’t easy. Oftentimes, it entails picking up merchandise that nobody else on Bay Street cares to! CIBC (TSX:CM) and the rest of the Canadian banks have been hurting for quite a while now. As the economy tests a potential recession next year, the banks are sure to be a turbulent ride.
The stock trades at 10.91 times trailing price to earnings right now to go with a dividend yield of 6.64%. That’s a low price to pay for such a bountiful dividend yield! Though CIBC stock is riding higher in recent weeks, there’s still a long way to go if shares are to see new highs again. I’d say it’ll take at least two years before CIBC can stage a full recovery. If the economy isn’t rocked in 2024, perhaps CIBC stock could be a dividend bargain right here. Either way, I’m a fan of the name for beginner investors seeking value in the market’s discount rack!
Nutrien (TSX:NTR) is another unloved stock that’s sure not to make you excited. But the point of value investing is not to chase euphoria; it’s to grab shares of firms at a lower price than what they’re worth. And for a beginner, the more boring a firm, the better, in my opinion.
Mutrien stock is an agricultural commodity producer that’s down nearly 47% from its 2022 highs. As a stock that’s been known to suffer long-lived rallies and plunges, Nutrien seems quite untimely at this juncture. Further, commodities like potash are tough to forecast.
Supply and demand dynamics are influenced by numerous things, after all. In any case, you’re getting a robust producer with a nice 3.91% dividend yield. Though 2024 could see NTR stock continue to drag, I think averaging down (buying gradually on dips) is the way to go if you’re keen on going against the grain (pardon the pun) with the agricultural commodity kingpin.