The economy seems uncertain these days. Tariffs, trade disputes, and geopolitical threats are all making it challenging to know how to invest. Yet, knowing the macroeconomic future rarely translates into better investment returns.
It is rare to find a rich economist. While they make forecasts and projections about the future, these forecasts are rarely right. Likewise, even if they are right, it doesn’t mean the market will react to those predictions in the way they anticipate.
The best thing an investor can do in uncertain times is to keep investing and manage their portfolio with prudence. If you want to be cautious, don’t use any leverage when investing. Likewise, diversify your portfolio across countries, sectors, and industries. Lastly, focus on buying stocks in good quality companies and holding them for long periods of time.
Ample research has shown that people who try to time the market tend to underperform the market. In contrast, people who just maintain positions in great businesses through market cycles tend to outperform. As many say, it’s time in the market, not timing the market.
If you are wondering how to invest $10,000 in these uncertain times, here are three low-risk stocks to consider investing in today.
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A growing utility to hold in a tough economy
AltaGas (TSX:ALA) is an excellent recession-resilient company. Over 50% of its income comes from a very good, regulated utility business in the United States. The remainder of its income comes from a mix of midstream assets in Western Canada.
Right now, over 80% of its income is from contracted assets. It targets 90% of its income to be from contracted sources in the next two to three years. For a utility/midstream business, AltaGas has above-average growth. Yet, it trades unfairly at a discount to other peers.
This stock yields 3.3% today. In the past five years, the company has had a record of growing its dividend by a mid-single-digit rate. For growth and resilience through a tough economy, AltaGas is an attractive buy today.
A top Canadian stock for essential goods
Another stock to hold through a wavering economy is Loblaw (TSX:L). With a market cap of $66 billion, it operates some of Canada’s largest grocery and pharmacy chains. Everyone needs groceries, essential goods, and medical supplies, regardless of the economy.
As the largest player, Loblaw can leverage its scale to offer the best pricing in the industry. With a strong loyalty program, customers are highly recurring. Although it has an established presence across Canada, it continues to grow its store count. It has premium, mid-market, and discount options that appeal to all Canadians.
Loblaw is arguably the best-managed grocery chain in Canada. It has delivered strong earnings and dividend per share growth in the past few years. While it is a pricey stock, it is a safe stock to hold in this challenging economy.
A small-cap software stock to hold in an uncertain economy
Another quality stock to buy for growth and safety in this economy is VitalHub (TSX:VHI). With a market cap of only $600 million, it is a bit more of a volatile choice in the mix. However, it has many factors that are appealing.
Firstly, VitalHub offers software to niche segments of the healthcare industry. Most of these areas are sponsored by federal, regional, or municipal governments. VitalHub offers SaaS services that provide recurring revenues and income.
Secondly, VitalHub has a great cash-rich balance sheet. It has been deploying that cash to acquire cheaper software providers. It has a great record of integration and growing profit margins.
Lastly, the company is growing at an attractive, high-teens rate. If it can continue to execute like it has, shareholders should do really well over the long term.
