Stock market investing is not always about picking the most defensive businesses to shore up your self-directed portfolio. It is necessary to have businesses with defensive qualities among your holdings. These can offer a degree of risk mitigation from the impact of market downturns. However, you cannot ignore the benefits of allocating some of the space in your portfolio to growth-focused investments.
Growth stocks add a degree of risk to your portfolio, but the potential rewards might be worth it. You can rely on your more risk-averse holdings to offset potential losses. It is important to remember that even the most defensive businesses are not immune to market crashes. However, well-capitalized companies with strong underlying businesses can emerge stronger on the other side and deliver substantial long-term returns.
Today, I will discuss two stocks. One of them is a high-growth stock, and the other is a reliable dividend stock. These two can be excellent investments as core holdings in your portfolio.
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MDA Space
MDA Space (TSX: MDA) is the riskier of the two stocks I will discuss today. The $2.87 billion market-cap company is an international space mission partner that provides advanced tech-based solutions and services to the growing space industry worldwide. While it might not be one of the biggest stocks to trade on the stock market, it might have the potential to become one.
Being a leading provider of digital satellite systems, geointellgence, and robotics, it might perform well as the space industry continues to grow. MDA Space is still largely considered to be a speculative investment, especially for the more risk-averse investors. That said, the stock boasts the potential to deliver outstanding long-term returns.
As of this writing, MDA stock trades for $22.26 per share, and it might be worth adding to your portfolio.
Enbridge
Enbridge (TSX: ENB) is a darling investment for many stock market investors. The $146.48 billion market-cap giant is a midstream energy company that owns an extensive network of energy infrastructure assets. The company is responsible for transporting a lot of the hydrocarbons produced and consumed in North America. Enbridge also has a growing portfolio of renewable energy assets, and it operates one of North America’s largest natural gas distribution and natural gas utility businesses.
The volatile nature of the energy industry might make it seem like a risky investment. However, its growing presence in the utility industry and renewable energy sector makes it a more attractive investment for risk-averse investors. Enbridge also boasts a 30-year streak for dividend hikes. As of this writing, Enbridge stock trades for $67.16 per share and boasts a juicy 5.61% dividend yield that you can lock into your self-directed portfolio today.
Foolish takeaway
No matter how reliable a stock and its reputation are, you must not forget that stock market investing is risky by nature. This means you should never go overboard and allocate your entire capital to just a few stocks. Building a sizeable portfolio by diversifying into several stocks across different industries can provide a bit of safety to your potential returns.
Stocks like Enbridge and MDA Space can be excellent foundations to inject defensiveness and growth to your self-directed portfolio. Beyond that, you can consider adding various stocks from different industries to shore up your holdings and set yourself up for long-term success as an investor.
