New investors often struggle with the question of what stocks to invest in. Despite what appears to be a daunting task, there are some stocks that new investors can use to form an easy 5-stock portfolio.
Here’s a look at what that easy 5-stock portfolio comprises and how to get started.
Pick #1- Establish a recurring monthly income
REITs are some of the best long-term options on the market. They generate recurring, reliable revenue streams backed by defensive business models that help to generate a juicy monthly income.
The REIT for investors to consider as part of an easy 5-stock portfolio is Slate Grocery REIT (TSX:SGR.UN). Slate is a grocery-anchored REIT that has a portfolio of 120 properties across 24 U.S. states.
Apart from the incredible defensive appeal that comes from grocery properties, Slate boasts a juicy monthly distribution that carries an insane yield of 8.2%.
This means that a modest $2000 investment to kick off an easy 5-stock portfolio will earn almost one additional share each month through reinvestments.
For long-term investors, that makes Slate a solid part of any easy 5-stock portfolio.
Pick #2- The big bank for growth and income
Canada’s big banks are always great options to invest in, especially as part of an easy 5-stock portfolio. And chief among the big banks to consider is Bank of Montreal (TSX:BMO).
BMO has been paying out dividends longer than any other company in Canada. As of the time of writing, BMO pays a quarterly dividend with a yield of 4.49%.
The bank also has an established cadence of providing annual bumps to that dividend.
Apart from its juicy yield, BMO is also an appealing option for growth-seekers. Specifically, BMO has invested heavily in the U.S. market, where it has become one of the largest banks.
Pick #3 – Throw in some growth
Most Canadians are aware of Dollarama (TSX:DOL), but few realize the insane potential of the retail stock. Dollar stores are incredibly defensive investments that are known to surge during times of volatility.
That’s because consumers will often trade down to less expensive options when money is tight. Adding to that, Dollarama’s unique fixed-price point model, which includes bundling of lower-priced items, adds to the overall value appeal.
That potential isn’t just limited to Canada. Dollarama has been steadily and quietly expanding to international markets. That includes several hundred locations in Latin American nations under the Dollar City brand, and more recently, entry into the Australian market.
The result is that consumers continue to flock to this expanding growth stock, which, despite a 38% gain year-to-date, remains a stellar long-term pick in any easy 5-stock portfolio.
Pick #4 – Why compromise on growth or income?
Another point that new investors often struggle with is whether to invest in growth stocks or focus on dividends. But why compromise when you can attain both?
A prime example of this is Enbridge (TSX:ENB). The energy infrastructure behemoth is known for its lucrative pipeline network, but it also offers much more. That includes a growing renewable energy portfolio and a reliable natural gas utility.
Those segments generate ample revenue for Enbridge to pay out one of the best dividends on the market, while also investing in growth initiatives. Enbridge also boasts an incredible three decades of annual increases to its juicy 6% yield.
Pick #5 – This stock pays a massive 7% yield
Another segment of the market that should form part of any easy 5-stock portfolio is Canada’s big telecoms. Specifically, investors should consider Telus (TSX:T) right now.
Telecoms are among the most defensive options on the market. Telus boasts a reliable and recurring revenue stream through its subscriber-based offerings, as well as a growing digital services arm.
Both provide ample revenue to cover the quarterly dividend with a 7.6% yield, while also investing in growth.
Prospective investors should also note that Telus has provided semi-annual increases to that dividend going back over a decade.
The easy 5-Stock Portfolio
No stock is without risk. Fortunately, the easy 5-stock portfolio noted above offers some defensive appeal, diversification, growth, and income-earning potential, checking off all the boxes.
In my opinion, one or all of the above would do well in a larger, diversified portfolio.
