Investing regularly is a good habit. Where to invest can sometimes get tricky. A simple strategy you can adopt is to build a core portfolio, wherein you invest in long-term all-weather stocks. The core portfolio could comprise sector ETFs, index funds, and dividend growth stocks with dividend reinvestment options. These are the assets you can buy anytime at any price and hold for decades.
Once your core portfolio investments are met, you can consider investing in satellite portfolios. These portfolios could be theme-based, sector-specific, opportunistic buys, or cyclical stocks that can generate strong returns in a short period, maybe a few months to two years.
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Three Canadian stocks to buy with $500
The 2025 Tax-Free Savings Account (TFSA) contribution room is $7,000. Suppose you have been maintaining a $500 monthly investment in long-term stocks, your core portfolio investment comes to $6,000. The additional $1,000 contribution room can be equally divided between the satellite portfolio and emergency funds.
Here are three Canadian stocks you could consider investing in with $500.
Hive Digital stock
Hive Digital Technologies (TSXV:HIVE) is one of the oldest blockchain companies with a sizeable inventory of Bitcoins. The company runs three data centres and is in the process of opening a fourth one. It has shifted its corporate office to the United States to benefit from crypto-supporting policies.
However, the short-term may be volatile and rather bearish as Bitcoin price movements are directly proportional to economic growth. Only when consumers have high disposable income do they invest in risky asset classes like crypto.
The next crypto cycle could take a year or two to develop. Until then Hive’s high-performance computing (HPC) business, which leases its GPU-powered data centres to perform artificial intelligence and rendering tasks, is seeing sizeable growth. A price of $4 or lower is a good entry point as the stock can surge to $8 in normal market volatility and $24 and above in a crypto bubble. It is an opportunistic buy to trade for the short term.
Bombardier stock
Now, is an opportunistic time to buy shares of business jet maker Bombardier (TSX:BBD.B) as it has fallen 20% since December 2024. The company reported strong 2024 earnings, meeting its revenue and earnings guidance. However, its aircraft deliveries for 2024 fell short of the targeted 150 due to supply chain issues. The company is on track to improve its adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) margin to 18% by 2025 by focusing on defence and pre-owned aircraft.
The stock is trading at an 8.6 times forward price-to-earnings ratio even when the company is working towards growing its earnings per share. The stock could catch up to the valuations and drive the stock price to $100 and above from $85.
Freehold Properties
Freehold Properties (TSX:FRU) is an interesting stock to buy for its 8.4% dividend yield that seems sustainable for the next four years. The company earns royalties from oil and gas companies for allowing them to produce oil on its lands. The more oil drilled the more royalty payments are credited. Since Trump aims to boost oil drilling activity in the United States, Freehold could see a sharp revenue surge from its United States lands.
While Freehold has a volatile dividend per share, the Trump administration presents an opportunity for strong dividend growth.
