Investing in the stock market as a Canadian, especially if you are new to investing, can be an overwhelming experience. Between balancing growth and income stocks and diversifying your portfolio, there’s plenty to be concerned about.
Fortunately, it’s not as hard as it sounds. If anything, starting to invest in the stock market as a Canadian can be a very rewarding experience over the long term.
And if you have just $5,000 to start your portfolio, here’s a handful of stocks to get you going.
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Start with a defensive back
Like any sporting reference, any portfolio needs a solid backline that can provide some defensive stability. And that stock to bolster any portfolio is Canadian Utilities (TSX: CU).
Utility stocks, such as Canadian Utilities, offer investors a stable means to generate dividends that is largely immune to market volatility. That’s because Canadian Utilities provides a necessary service that can’t be traded down.
Even better, utilities are bound by long-term regulated contracts that guarantee a recurring revenue stream which can span decades. That revenue stream is ample enough to invest in growth and pay out a generous dividend.
Speaking of dividends, Canadian Utilities offers a quarterly yield of 4.8%. The company has also provided annual dividend increases for over 50 consecutive years without fail. This makes Canadian Utilities one of just two Dividend Kings in Canada.
This fact makes Canadian Utilities a must-have option for those looking to invest in the stock market as a Canadian.
Keep in mind that new investors can opt to reinvest those dividends, allowing them to compound over a longer time. This allows any eventual income to continue growing until needed.
Add this incredible long-term option to your portfolio
Another great option that can provide both defensive and growth appeal is Enbridge (TSX: ENB). Enbridge is one of the largest energy infrastructure companies on the planet.
The company is best known for its pipeline business, but Enbridge also boasts a natural gas utility business and a growing renewable energy operation. All three segments provide defensive appeal to the stock while also boasting massive opportunity.
More importantly, the stable revenue that those segments provide allows Enbridge to invest in its multi-billion-dollar project backlog. It also allows Enbridge to pay out one of the best dividends on the market.
As of the time of writing, Enbridge offers a juicy 5.8% yield. And like Canadian Utilities, Enbridge has an established cadence of providing annual upticks to that dividend going back three decades without fail.
Consider a big-bank stock for your portfolio
Another fine option for new investors joining the stock market as a Canadian is Bank of Nova Scotia (TSX: BNS).
Canada’s big banks are almost always great options to add to a portfolio. In short, they offer reliable revenue generation from the domestic market at home, growth from international markets, and a juicy dividend.
In the case of Scotiabank, that international presence has refocused lately on the lucrative U.S. market and away from more volatile Latin American markets. This means that there are plenty of growth opportunities to realize over the longer term.
Turning to income, Scotiabank offers a tasty 6% quarterly dividend. The bank also has an established cadence of providing annual upticks to that dividend going back years.
Investing in the stock market as a Canadian can be profitable
The trio of stocks mentioned above can provide significant growth and income-earning capabilities that can last decades. More importantly, they can also provide defensive appeal to investors.
Perhaps best of all, the stocks can form the foundation of any long-term portfolio, even with just $5,000 to start.
In my opinion, one or all of the above stocks should be core holdings in any well-diversified portfolio.
Buy them, hold them, and watch your future income grow.
