New Investors Shouldn’t Wait to Buy Into Growth Stocks

Lundin Mining Corp. (TSX:LUN) is one of the best mining stocks on the TSX. Here’s why it’s a buy for young investors.

| More on:

As leading stock market pundit Jim Cramer says, “When you have some certainty you get a nice rally.” It’s true that uncertainty is like kryptonite for investors. One thing that happens when uncertainty is reduced, though, is that gold tends to recede, and that doesn’t seem to be happening to a significant extent at the moment, as precious metals wait at a crossroads for the lights to change.

Go for growth rather than wait for weakness

Investors can either wait and see how 2020 pans out, or buy a diversified all-rounder. Value investing is one thing, but missing out on predicted upside is another. That’s why it might be better to invest in growth areas when it comes to certain commodities, rather than wait for the dip.

Of particular interest to the rising cohort of investors will be the green economy. Building out of the “ethical investment” space, the green economy is high growth and takes in such global trends as alternative protein and the renewable energy sector. Both investment themes are defensive, with food and electricity generation being a solid foundation for any new stock portfolio.

Young investors will inherit some key growth areas in the new decade, with some characteristic themes of the new generation also packing steep upside potential. Stocks such as Northland Power, Algonquin Power and Utilities, Beyond Meat, Restaurant Brands, Tesla, and Lundin Mining (TSX:LUN) all offer ways for new ethical investors to cash in while staying within the protective bubble of blue-chip companies.

IPOs that could see the light of day at the start of the new decade include such hopefuls as GFL Environmental, the fourth-largest recycling and waste management business in North America, and Heliogen, an alternative power company backed by such luminaries as Bill Gates. GFL put the brakes on debuting this year, but which could be popular if it did make the decision to go public in the ’20s.

Lundin Mining is an especially strong play since it offers upside from the growth trend of electric vehicles, or EVs. With a growing number of auto makers getting in EVs, the industry will likely drive prices of battery components through the roof. Elon Musk has expressed concern that rising metal prices could constrain the electric car industry, with the logical conclusion being increased mining activity.

Paying a 1.5% yielding dividend, Lundin offers passive income to new investors on top of that steep upside potential. It’s not just diversified across metals, with operations in Brazil, Chile, Portugal, and Sweden, which further spreads the risk of adding Lundin to a long-term dividend stock portfolio.

The bottom line

Lundin is cheap, and yet its potential to break out next year is vast. With access to high growth in the electric vehicle space as well as the green economy in general, Lundin’s spread of gold, zinc, nickel, and copper provides stockholders with a range of industry exposure. This diversified miner is also a play on both sides of uncertainty, with its gold assets providing some key wealth-hiding safety.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. David Gardner owns shares of Tesla. Tom Gardner owns shares of Tesla. The Motley Fool owns shares of and recommends RESTAURANT BRANDS INTERNATIONAL INC and Tesla. The Motley Fool has the following options: short January 2020 $94 calls on Restaurant Brands International.

More on Dividend Stocks

Paper Canadian currency of various denominations
Dividend Stocks

Should You Buy the 3 Highest-Paying Dividend Stocks in Canada?

A few dividend stocks saw a sharp correction in November, increasing their yields. Are they a buy for high dividends?

Read more »

money while you sleep
Dividend Stocks

Buy These 2 High-Yield Dividend Stocks Today and Sleep Soundly for a Decade

These stocks pay attractive dividends that should continue to grow.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

$15,000 Windfall? This Dividend Stock Is the Perfect Buy for Monthly Passive Income

If you get a windfall, after debt investing should be your next top option to create even more passive income!

Read more »

senior relaxes in hammock with e-book
Dividend Stocks

3 Canadian Dividend Stocks for Worry-Free Income

These Canadian stocks have consistently paid dividends, generating a worry-free passive income for investors.

Read more »

people relax on mountain ledge
Dividend Stocks

Invest $10,000 in This Dividend Stock for $4,791.70 in Annual Passive Income

A dividend stock doesn't have to be risky, or without growth. And in the case of this one, the growth…

Read more »

ETF chart stocks
Dividend Stocks

2 Top TSX ETFs to Buy and Hold in a TFSA Forever

Don't get crazy. Just think simple growth with these two ETFs that are perfect in any TFSA.

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Use Your TFSA to Earn $900 Per Year in Tax-Free Income

This covered call ETF plus a TFSA could be your ticket to high tax-free passive income.

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Turn a $15,000 TFSA Into $171,000

$15,000 may not seem like a lot, but over time that amount can balloon into serious cash.

Read more »