New investors: 3 stocks you should own for the long term


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Building a portfolio for the first time can be both exciting and nerve-wracking. Fortunately, there are many resources available to new investors today that can help make this process easier. Personally, I think the perfect portfolio for new investors will contain dividend aristocrats, blue chip growth stocks and a broad-market ETF. Finding the right mix between these different types of assets will depend on each investor’s financial goals and risk tolerance. In this article, I’m going to discuss three stocks that might get you started.

Start by finding great dividend stocks

When building your first portfolio, I think it’s crucial that investors start by building a core of strong dividend-paying stocks. This is because dividend stocks tend to be less volatile than growth stocks. It is also much easier, in my opinion, to value dividend stocks. This is because they tend to have a longer track record that investors can use to gauge performance.

For the reasons stated above, new investors should focus on Canadian dividend aristocrats. These are companies that have been able to increase their dividends for at least five consecutive years. The inclusion of a company in this list shows that its management company is able to allocate capital intelligently. A security that investors should consider fulfilling this characteristic is Bank of Nova Scotia. One of Canada’s Big Five banks, the Bank of Nova Scotia has successfully paid a dividend for 189 consecutive years.

Add growth to your portfolio

Once you’ve found a group of dividend-paying stocks that can form the core of your portfolio, consider adding blue chip growth stocks. These are companies that are established in their respective industries but still have plenty of room to continue growing. An example of such a business would be Shopify. This company has become one of the biggest players in the global e-commerce industry. However, despite its size, Shopify could still become a much bigger company than we know today.

Don’t forget that companies outside of the tech sector could also provide solid long-term growth. With approximately $690 billion in assets under management, Brookfield Asset Management is one of the largest alternative asset management companies in the world and is led by longtime CEO Bruce Flatt. I would recommend this stock to both new and experienced investors.

Don’t be afraid of ETFs

Finally, investors should not avoid exchange-traded funds (ETFs). It is a basket of assets similar to what you would find in a mutual fund. However, unlike a mutual fund, ETFs are much more liquid. This means that investors can buy and sell shares of these funds as much as they want (given that the market is open, of course).

An example of an ETF that new investors should consider owning is the Vanguard S&P 500 Index ETF. Owning shares of this ETF will give an investor exposure to the largest companies in the United States. This includes the likes of Apple, Amazon, You’re here, Visaand much more.


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