If you have $45,000 to invest in the Canadian stock market, finding the right balance between growth, stability, and passive income is key. While there are countless stocks to choose from, three stand out as strong candidates for a well-rounded portfolio: Constellation Software (TSX:CSU), TELUS (TSX:T), and iShares S&P/TSX 60 Index ETF (TSX:XIU). These three investments offer a mix of high-growth potential, reliable dividends, and broad market diversification. Making them an excellent choice for investors looking to maximize their returns.
The stocks
Constellation Software has built a reputation as one of Canada’s most impressive tech companies. The Canadian stock operates by acquiring and managing vertical market software businesses. A strategy that has allowed it to grow consistently over the years. Its latest earnings report highlighted this continued success, with revenue increasing by 19.5% year over year to reach $9.69 billion. However, net income declined by 27.8%, landing at $587 million. Despite this, Constellation maintains a solid operating margin of 15.07%, showing that its core business remains profitable. With a market capitalization now exceeding $104 billion, the Canadian stock continues to demonstrate long-term growth potential.
While Constellation Software offers growth, TELUS provides stability and a steady source of income. As one of Canada’s largest telecommunications companies, TELUS built a solid reputation for delivering reliable services across wireless, internet, and television markets. In its most recent earnings report, TELUS posted revenue of $19.96 billion, reflecting modest year-over-year growth of one percent. However, net income surged by 105.9%, reaching $923 million, demonstrating improved profitability. One of the biggest attractions of TELUS for investors is its dividend. Now, with a forward annual yield of 7.7% at writing. The Canadian stock’s payout ratio is high. Yet its history of returning value to shareholders makes it an appealing option for those looking to generate passive income.
While individual stocks like Constellation Software and TELUS offer exciting opportunities, adding an exchange-traded fund (ETF) like the XIU provides diversification and reduces overall risk. XIU is designed to track the performance of the S&P/TSX 60 Index, giving investors exposure to sixty of Canada’s largest publicly traded companies. This ETF covers a variety of sectors, including financial services, technology, and energy. With net assets of approximately $16.4 billion and a distribution yield of 2.92%, XIU is an excellent choice for investors looking for a simple way to gain broad market exposure while still collecting dividends.
Putting it together
Putting these three investments together creates a well-balanced portfolio that takes advantage of different market dynamics. Constellation Software provides exposure to the fast-growing technology sector. This has been a major driver of stock market gains in recent years. TELUS offers a defensive position in a necessity-based industry, ensuring that your portfolio remains stable even during economic downturns. Meanwhile, XIU ties it all together by offering diversified exposure to Canada’s largest and most successful companies, giving you a strong foundation for long-term investment success.
Investors who take this approach can benefit from both capital appreciation and income generation. Constellation’s track record of acquiring and growing software companies makes it a great long-term growth stock. While TELUS’s dividend ensures a consistent return even when markets are volatile. XIU, as an index ETF, acts as a hedge against market uncertainty. All while still providing solid returns over time. This combination allows you to maximize your $45,000 investment while keeping risk at a manageable level.
Bottom line
For those looking to put $45,000 to work in the Canadian stock market, this approach provides a smart and diversified strategy. With a combination of a leading technology stock, a strong dividend-paying company, and a broad market ETF, investors can create a portfolio that is well-suited for both growth and stability. Whether you are a seasoned investor or just starting, this mix of stocks offers a well-rounded way to build wealth over time.
