For beginner investors who are just starting out, the TSX stocks that you choose to buy first can help set the stage for years of investing success.
So, the key for investors is to find high-quality stocks that you can own for years to come but also ensure that the companies you invest in are easy to understand and follow.
When you buy stocks with complicated businesses that are difficult to understand, it can be difficult to comprehend how they are performing and assess their potential going forward.
So, if you’re a new investor with savings you’re looking to put to work, here are three of the top TSX stocks I would buy with $500 right now.
A simple way to begin investing in real estate
Investing in real estate is one of the most popular investments and a dream of many Canadians.
However, while buying a rental property can require significant capital upfront for a down payment and a lot of your time and focus on finding renters and maintaining your property, buying a residential real estate investment trust (REIT) like Canadian Apartment Properties REIT (TSX: CAR.UN) can be a much better investment.
Canadian Apartment Properties REIT (CAPREIT) owns a massive portfolio of residential real estate properties all across Canada, offering many benefits to investors, especially new investors.
For example, one of the main reasons to buy the TSX real estate stock is its sheer size, diversification, and professional management team.
With properties all over the country, diversification helps reduce risk considerably. The stock routinely keeps its occupancy rate above 90%, reducing the headaches of trying to find renters if you were to buy a single rental property.
Furthermore, with a professional management team running the REIT, not only do you never have to worry about taking care of any problems or maintenance issues on a rental property, but the management team is also consistently looking at new properties to add to the portfolio and expand CAPREIT’s operations.
Therefore, if you’re interested in the real estate sector due to its defensive nature as well as its long-term growth potential, CAPREIT is one of the top TSX stocks for beginner investors to buy now.
A top defensive growth stock on the TSX to buy right now
Another consideration for new investors is to buy TSX stocks you can have confidence in owning for the long haul, so you don’t have to worry about selling off these businesses even if there’s a slight pullback in the market.
That’s why Brookfield Infrastructure Partners (TSX: BIP.UN) is one of the top Canadian stocks for new investors.
Brookfield owns a portfolio of essential assets worldwide, such as utilities, ports, railroads, telecom towers, and much more. These essential assets, plus Brookfield’s significant geographical diversification, make it highly defensive and, therefore, highly reliable even in times of economic turmoil.
Plus, the company consistently assesses markets around the world to find new, undervalued opportunities to invest in and expand its portfolio.
It also aims to increase its dividend by 5-9% annually over the long haul and today offers a dividend yield of more than 5.1%.
One of the best-known Canadian retailers trading undervalued
Finally, another top TSX stock for beginner investors to buy now is Canadian Tire (TSX: CTC.A), the massive, well-known retailer that’s been trading cheaply in recent months.
Canadian Tire also has a tonne of diversification, owning several different retail banners and even its own financial services business.
Furthermore, with one of the largest loyalty programs in the country and a history of leveraging data analytics to drive more sales, Canadian Tire has years of growth potential ahead of it, making it one of the best retail stocks on the TSX to buy now.
Plus, with Canadian Tire trading undervalued today, at a forward price-to-earnings (P/E) ratio of 10.5 times, and offering a dividend yield of 4.9%, now is the perfect time to consider taking a position.
For comparison, its 10-year average forward P/E ratio is 12.6 times, and its average yield over the last decade is just 2.8%. So, while it trades this cheaply, it’s certainly one of the top TSX stocks to consider buying today.
