Many investors, particularly those who are new to investing, often struggle with picking the best investments to start their portfolios with. Fortunately, it doesn’t need to be hard or complicated. There are many routes to start investing, even if you only have $1,000 to start with.
Here’s an easy portfolio to start with that can offer both growth and income-producing benefits over the longer term.
Start with a solid defence
The importance of one or more defensive stocks to line your portfolio can’t be understated enough. That’s why those who are looking to start investing should consider Fortis (TSX: FTS) as one of the key stocks for your portfolio.
Fortis is a utility stock. Utilities generate a recurring and stable revenue stream that is backed by regulated contracts. Those contracts often span decades in duration, making Fortis one of the most defensive and stable options on the market.
More importantly, that stability allows Fortis to pay out a generous dividend and invest in growth initiatives.
As an income stock, Fortis pays out a quarterly dividend and has provided shareholders with generous annual upticks to that dividend for an incredible 50 consecutive years without fail. This not only makes Fortis one of only two Dividend Kings on the market but furthers the defensive appeal of the stock.
As of the time of writing, the yield on that dividend works out to a respectable 3.9%.
Throw in some recurring monthly income
One of the long-standing ways of establishing an income stream is owning a rental property. Unfortunately, prospective landlords looking to start investing are priced out of that market thanks to the white-hot real estate prices we continue to see.
This is where the appeal of RioCan Real Estate (TSX: REI.UN) comes into play as an option for those looking to start investing.
RioCan is one of the largest REITs in Canada with a portfolio of nearly 200 properties located across the country. That portfolio consists of a growing number of mixed-use residential properties, which provides a unique opportunity for would-be investors.
In short, owning a rental property involves a considerable investment of both time and capital. Then there are tenant issues, the mortgage, property taxes, and a host of other maintenance issues to consider.
RioCan on the other hand spreads that risk across hundreds of units, and does not come with tenant issues or a mortgage. However, RioCan does provide investors with a monthly distribution, similar to a landlord collecting rent.
Specifically, RioCan’s distribution works out to an appetizing 5.4% yield, making it a great option for anyone looking to start investing right now.
Add a big bank for reliable big income
Canada’s big banks are often touted as some of the best long-term options to consider, and there’s a good reason for that view.
The banks offer a reliable revenue stream, significant growth prospects, and a sizable defensive moat around their core segments in Canada.
For those looking to start investing, the banks represent an easy option that can prove lucrative over the longer term.
One bank that new investors cannot go wrong with is Bank of Montreal (TSX: BMO). BMO is the oldest of the big banks, which has been paying out dividends for nearly two centuries without fail.
Today that dividend works out to a tasty 5.2% yield, making it one of the better-paying options on the market. The bank has also provided generous annual upticks to that dividend for years, which makes it a great buy-and-forget candidate.
BMO has also invested heavily into expanding, particularly in the U.S. market. This provides the bank with an additional revenue stream that can act as a source of growth for decades.
Start investing today, enjoy the rewards tomorrow
All investments carry some risk, and that includes the trio of stocks mentioned above. Fortunately, the above stocks are all diversified and provide some defensive appeal for investors.
The stocks also pay out a generous dividend, which can be directed back and reinvested until needed, allowing your portfolio to grow over time.
In my opinion, one or all of the above stocks should be core holdings in any well-diversified portfolio.
Buy them, hold them, and start investing today.
