$35,000 might not seem like a life-changing sum, but when building a resilient investment portfolio with it and managed strategically, it can be the foundation of long-term wealth. The key lies in striking a careful balance between risk and reward — combining income, growth, and defensive assets in a way that suits both market conditions and your personal financial goals.
The three-part strategy
This portfolio approach divides the $35,000 into three key segments:
- Dividend stocks (40%)
- Growth stocks (40%)
- Low-risk defensive assets (20%)
Let’s break down each component.
1. Dividend stocks — $14,000
Safe dividend-paying stocks provide consistent income and tend to be more stable during market turbulence. A good example is Royal Bank of Canada (TSX:RY), also known as RBC. As a leading Canadian bank, RBC offers a strong balance sheet and a diversified business across its operations: wealth management, personal and commercial banking, and capital markets. Currently, it offers a safe dividend, yielding 3.5%. By allocating $14,000 to dividend stalwarts like RBC, Fortis, and Enbridge, investors can benefit from both income and long-term capital appreciation, especially when shares are bought on meaningful market corrections. These companies also tend to have wide economic moats and are less volatile than tech or speculative names.
2. Growth stocks — $14,000
This segment targets higher long-term returns and includes Canadian and U.S. companies with strong growth trajectories. Think of businesses in technology, e-commerce, or green energy.
A sample mix might include the following:
- Shopify: Canada’s tech darling, turning around with innovation in enterprise tools and artificial intelligence (AI) integration.
- Nvidia: While not Canadian, this U.S. semiconductor giant is leading the charge in AI and computing.
- Brookfield Renewable Partners L.P.: For environmental-, social-, and governance-conscious growth exposure, this renewable energy play offers scale and global reach.
Growth stocks add greater volatility to a portfolio, but over time, they might outpace more conservative holdings. Trimming positions during overheated periods and reinvesting any capital gains is a good way to manage risk.
3. Low-risk defensive assets — $7,000
The final portion of the portfolio acts as a cushion. Consider:
- High-interest savings exchange-traded funds like Purpose High Interest Savings ETF, which offers stable returns and liquidity.
- Government bonds or guaranteed investment certificates for capital preservation and interest income.
- Cash in a high-interest savings account, providing liquidity to deploy capital during downturns.
Defensive assets won’t shoot the lights out, but they’ll help you sleep better during market selloffs and provide dry powder for future buying opportunities.
Why this strategy works
Balancing growth with income and safety creates a diversified portfolio that performs across different market environments. In bull markets, growth stocks lift returns. In bear markets, dividends and defensive assets cushion the fall.
Moreover, by including Canadian dividend-payers, you benefit from favourable tax treatment on eligible dividends in non-registered accounts — a nice bonus.
The Foolish investor takeaway
The $35,000 portfolio isn’t about making a quick fortune — it’s about building a lasting foundation. With regular contributions, smart rebalancing, and a focus on quality businesses like RBC, this strategy offers a compelling blend of risk management and long-term growth.
Whether you’re just starting out or reallocating an existing lump sum, this balanced approach can help you weather volatility while steadily growing your wealth. After all, in investing, consistency often beats excitement.
