Stock market investing is not as flashy as many might assume by looking at popular media. While there are opportunities to get substantial returns on your investment in a short time, such investments are rare and risky. For real success in the long run, adding safe and reliable blue-chip stocks to your self-directed portfolio is essential.
Having a long-term horizon while investing in the equity markets can help you generate real and sustainable wealth growth. For this, you must identify companies with solid fundamentals and growing cash flows. Companies with enough capital to withstand market volatility and deliver outsized long-term gains can be excellent foundations for a strong self-directed investment portfolio.
Here are two of the best Canadian blue-chip stocks that can be good investments leading into another year of stock market investing.
Royal Bank of Canada
Royal Bank of Canada (TSX:RY) is the largest TSX stock in market capitalization and the biggest player in its industry. The $175.44 billion market capitalization multinational financial services company is the largest Big Six Canadian bank and one of the most reliable blue-chip stocks trading on the TSX.
Over almost more than a century and a half, RBC stock has paid its shareholders their dividends without fail. The bank stock has maintained its dividends through various market cycles, including two world wars and a pandemic. As of this writing, Royal Bank of Canada stock trades for $125.24 per share, down by 10.65% from its 52-week high.
While some investors think the downturn from the pressure from inflation and higher provisions for credit losses is alarming, RBC stock is well capitalized and well managed enough to breeze through and come out stronger when the dust settles.
Brookfield Asset Management
Diversifying your asset allocation is one of the smartest ways to invest safely in the stock market. By balancing your portfolio across different industries, you can offset the weakness in one or more with strong performances by others. Brookfield Asset Management (TSX:BAM) is one of the best stocks you can invest in if you want exposure to assets diversified across different industries.
It is among the largest and fastest-growing alternative asset managers worldwide. The $20.14 billion market capitalization company invests in high-quality assets that are part of various business verticals.
From renewable energy to private equity, real estate, and transportation, Brookfield Asset Management has its hands in several sectors. As investors continue investing their growing capital base in alternative assets, BAM has plenty more room to grow and derive greater shareholder value.
As of this writing, BAM stock trades for $48.81 per share, paying its shareholders at a juicy 3.56% dividend yield.
- We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if Brookfield Asset Management Ltd. made the list!
Foolish takeaway
Blue-chip stocks can be a great way to park your investment capital for a long time and watch it grow reliably over the years. Strong companies that have been around for a long time and not going anywhere can grow shareholder value and provide excellent long-term returns. To this end, Royal Bank of Canada stock and Brookfield Asset Management stock are two of the very best to consider.
