When you’re just starting out as an investor, knowing where to begin can seem daunting. There are so many different stocks to buy, all different sizes, at different stages of growth, and operating across different sectors. That’s why one of the best strategies you can take is to focus on buying high-quality, blue-chip stocks.
These companies are some of the safest and most reliable investments you can make, giving you the perfect foundation to build long-term wealth. They tend to have strong balance sheets, established operations, and proven track records of growing through all types of economic environments.
Blue-chip stocks might not always be the most exciting investments, but they offer stability, consistent growth, and often, reliable dividend income, which are three essential factors for anyone beginning their investing journey.
By owning some of the best businesses right from the start, you can form the core of your portfolio. You can then focus on staying invested and letting time and compounding do the heavy lifting for you, while you look for more companies to buy and expand your portfolio.
So, if I were starting today with $7,000 to invest, here are four of the best foundational stocks I’d buy.
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One of the best and safest stocks on the TSX
When it comes to finding foundational stocks that can form the core of your portfolio, there’s no question that one of the best places to start is with Fortis (TSX: FTS).
Fortis is a utility stock and easily one of the best utility stocks you can buy. And utility stocks in general are perfect foundational investments.
They have reliable operations that don’t fluctuate much through different economic environments. They’re regulated by governments, ensuring consistent revenue, and they continue to have strong growth potential as energy demand rises.
Because of all this, Fortis generates consistent and predictable cash flow, making it an ideal long-term investment. In fact, Fortis has increased its dividend for 50 consecutive years, an impressive feat that highlights not just how strong its operations are, but also how reliably it performs through recessions, rising inflation, and other economic challenges.
So, if you’re looking for one of the safest and most dependable foundational stocks to buy now, Fortis is certainly a top choice.
An excellent way to gain exposure to the real estate sector
Another essential area for long-term investors to gain exposure to is real estate. And one of the best ways to do that is through Canadian Apartment Properties REIT (TSX: CAR.UN).
CAPREIT is the largest and most diversified residential REIT in Canada, with thousands of units spread across the country. It’s a stock that not only has plenty of long-term potential to grow in value but also consistently returns cash to investors through its monthly dividend.
While it may be a little more volatile than a stock like Fortis, CAPREIT offers investors a perfect combination of defensive cash flow and long-term capital gains potential.
As population growth continues to drive demand for housing in Canada, and as CAPREIT continues to leverage its scale and operational expertise, it’s well-positioned to keep growing steadily for years to come.
Therefore, for anyone looking to build a well-rounded, resilient portfolio, CAPREIT is one of the best foundational stocks to own for reliable exposure to the real estate sector.
Two top defensive growth stocks to buy and hold for years
Finally, some of the best stocks to own in your portfolio for the long haul are defensive growth stocks. These are businesses that can steadily expand over time while also offering reliability during economic volatility.
Thomson Reuters (TSX: TRI) is a perfect example. The company provides essential legal, tax, and financial information services, generating consistent revenue through subscription-based models.
It’s a high-quality, but more importantly low-volatility stock that continues to grow steadily over the long haul.
Meanwhile, Jamieson Wellness (TSX: JWEL) is another strong defensive growth stock to buy now.
As a manufacturer and distributor of vitamins and health supplements, Jamieson benefits from the growing demand for health and wellness products.
Furthermore, it has a strong brand, continues to expand internationally, and generates reliable cash flow even during economic downturns.
Therefore, if you’re looking for foundational stocks to buy now and hold for years to come, there’s no question that defensive growth stocks like Jamieson or Thomson Reuters are two of the best to buy now.
