Building out a well-diversified portfolio that can provide growth and a healthy income takes time. Despite that tall order, new investors shouldn’t be discouraged when hearing of $20,000 or more being allocated to a single stock. It is possible to start investing with $1,000 or less right now.
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First, a quick reminder
As I said above, building that perfect portfolio for growth and income takes time. Investing is a long-term play and market downturns, booms, and corrections are to be expected along that journey. The key point is to diversify, invest over time, and let your nest egg grow.
And perhaps most importantly, building out that well-diversified portfolio is easier than you may think. Even if you start investing with $1,000 or less, it is possible provided you start with the right investments.
Let’s start with a defensive stock that pays handsomely
There’s no shortage of great stocks on the market. Many of them pay out a handsome dividend and provide long-term growth. One such example for investors who are looking to start investing with $1,000 right now is Fortis (TSX: FTS).
Fortis is one of the largest utility stocks on the market. The company boasts operations across North America that provide a reliable and recurring source of revenue. That revenue stream is backed by long-term regulated contracts, which makes Fortis a must-have backbone for any portfolio.
That reliable revenue stream also means that Fortis can pay out a very handsome dividend. As of the time of writing, the company offers an appetizing 4.37% yield. Also noteworthy is that Fortis is one of just two companies on the market that has provided an incredible 50 consecutive years of dividend increases.
In other words, investors who drop $1,000 into Fortis this year and continue that practice will see their nest egg grow over time. As of the time of writing, Fortis trades at just over $54.
Add a big bank stock to your portfolio
It would be nearly impossible to compile a list of the best ways to start investing with $1,000 without mentioning at least one of Canada’s big banks. And for those investors, Bank of Nova Scotia (TSX: BNS) represents a unique opportunity.
Scotiabank isn’t the largest of Canada’s big banks, but it is the most international of Canada’s big banks. Specifically, Scotiabank has targeted several Latin American countries in recent years to fuel its growth efforts.
Those efforts have made the bank a familiar and preferred partner across Mexico, Columbia, Chile, and Peru. Those countries are part of a trade bloc known as the Pacific Alliance, which is focused on fostering growth and eliminating tariffs.
That stellar growth has also helped Scotiabank pay out a very handsome dividend. As of the time of writing, Scotiabank trades at just over $63 and offers investors a tasty 6.68% yield.
Scotiabank has paid out that dividend for nearly two centuries without fail. The bank has also provided annual juicy upticks to that dividend for several years.
Additionally, prospective investors can take solace in knowing that Scotiabank’s stock price is in discount territory. Thanks to rising interest rates and high inflation, the bank still trades down 14% over the trailing two-year period.
Overall, Scotiabank is a stellar stock that can provide both growth and income for years. This makes it a solid option to consider for those looking to start investing with $1,000.
Final thoughts
Both Scotiabank and Fortis are great long-term options for any well-diversified portfolio. Apart from the defensive appeal they both offer, they also benefit from annual dividend increases that make them buy-and-forget favourites.
In my opinion, one or both stocks would do well as core holdings for investors looking to start investing with $1,000. Buy them, hold them, and watch them grow for a decade or more.
