When you are new to investing, it is a smart idea to widely diversify your holdings in a wide mix of Canadian and American stocks. When you are new, you don't really know what types of stock categories or investment styles resonate with you.
You can only figure it out by actually making the investments. With time, you will start to see patterns and opportunities that you didn't see before. Likewise, you will start to compile a portfolio of stocks that fit a theme or strategy that works best for you.
If you are a beginner investor and just want a solid mixed portfolio, here are three stocks that could help you get started.
A Canadian blue-chip stock
The Canadian rail stocks provide a nice mix of growth, stability, and income for any investment portfolio. Canadian National Railway (TSX:CNR) business has certainly stood the test of time. Its company has been in operation for more than 100 years!
CNR's network spreads across Canada and the U.S. and serves a crucial economic role in North America. As a result, it has a solid competitive moat and consistent pricing power.
It has grown earnings per share by a 9.6% compounded annual growth (CAGR) over the past decade. It has grown its dividend per share by an even faster 13% CAGR!
The stock has pulled back on worries about an employee strike that could temporarily halt its Canadian network. While this is a concern, it is likely only a short-term challenge. This Canadian blue-chip stock yields 2.18% right now. It looks like a reasonable opportunity to buy for the long term.
A TSX dividend stock
It never hurts to have a bit of income in your portfolio. When the market dips, at least you earn a dividend return that helps provide stability. Granite Real Estate Investment Trust (TSX:GRT.UN) is a good bet for income and value.
It has a portfolio of large industrial and logistics properties across Canada, the U.S., and Europe. The stock has not performed well recently, but the real estate investment trust (REIT) has delivered steady mid- to high single-digit cash flow per unit growth for the past several years. Likewise, its distribution has grown steadily by a 4% CAGR over the past 10 years.
Granite yields 4.6% today. This Canadian stock also trades at an attractive valuation and a +25% discount to private market real estate.
High interest rates have pushed REITs down. However, interest rates are heading lower. That could create a valuation resurgence. That is especially true for high-quality Canadian real estate stocks like Granite.
A Canadian growth stock
Beyond the slightly boring income and value stocks, it's important to have some growth in every portfolio. One Canadian stock every investor should own is Constellation Software (TSX:CSU). This stock is up 1,424% in the past 10 years and 23,000% since its initial public offering (IPO)!
The company has an extremely successful strategy to invest in niche software companies all over the world. While its growth could start to slow, high-teens/low-20% annual returns are not out of the picture.
Constellation stock trades for $4,200 per share. That is larger than many beginner investors' portfolios. The great news is many brokerages are starting to allow investors to buy fractional shares.
If you still can't buy Constellation stock, you can also buy its spin-off, Topicus.com. It is completing a similar software acquisition strategy but with a focus on Europe. It is growing at an attractive rate and could be a good stock to buy today as well.