3 Top Canadian Stocks That Are Perfect for New Investors

Don’t let the market’s volatility keep you from investing today. Here are three top Canadian stocks for a new investor’s portfolio.

| More on:

Building a portfolio of individual stocks can take time. You may already have the funds to invest in 25 different stocks today, quickly amassing a well-diversified portfolio. However, that may not be the case for everyone. 

If you’re just starting out with limited funds, the first few companies you choose to invest in should be chosen wisely.

I’ve put together a list of three top Canadian stocks that are perfect for anyone just starting out. 

Don’t think that these companies are only for new investors, though. Even for seasoned investors, now’s as good a time as any to start a position in any one of these three companies.

Brookfield Asset Management

There aren’t many more well-diversified companies on the TSX than Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM). Owning shares of this asset management company is as close as you’ll get to owning an index fund.

The $110 billion company has a growing international presence, with investments also spread across a range of different industries.

Despite the Canadian stock’s diversified portfolio, it has still managed to deliver consistent market-beating returns. Shares of Brookfield Asset Management are up more than 100% over the past five years. In comparison, the Canadian stock market has returned less than 50%.

If diversification is what you’re in search of, this market-beating Canadian stock should be at the top of your watch list.

Shopify

Investors in search of growth don’t need to look much further than the largest tech company in the country. Shopify (TSX:SHOP)(NYSE:SHOP) has been a market-crushing performer ever since it went public, and I don’t expect that to change anytime soon.

One of the major criticisms of Shopify is its valuation. Even with the Canadian stock trading at a discount today, it’s still priced at a lofty valuation. 

The reality is, if you’re planning on owning a top growth stock, you’re going to need to pay up.

One of the risks of owning an expensive stock is volatility. Over the past half-year, we’ve witnessed many Canadian stocks in the tech sector, including Shopify, sell off dramatically. Shares of Shopify have been more than cut in half over the past six months.

In the short term, it’s extremely difficult to predict how the tech sector will continue to perform. I’d be very cautious making any bets with a timeline of under three years, whether that’s on a specific company or an entire industry. 

What I am willing to bet on is Shopify’s long-term growth potential. If you can handle the volatility, this is a growth stock you’ll want to own, especially while it’s trading at these must-buy prices.

Toronto-Dominion Bank

The last pick on my list is certainly not as exciting as the first two companies. But there’s absolutely nothing wrong with owning a boring stock. In fact, if you’re going to own a couple of high-priced growth stocks in your portfolio, you’d be wise to also own a few boring, but dependable, companies.

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) can provide a portfolio with both dependability and passive income. 

Since the bank will likely endure far less volatility than most growth stocks, it can help keep a portfolio afloat during inevitable selloffs. On top of that, the Canadian stock pays a top dividend, which yields above 3.5% at today’s stock price.

TD Bank may be trading near all-time highs, but I wouldn’t let that prevent you from starting a position today. This is the type of company that you can feel good about buying at just about any price.

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 Nicholas Dobroruka owns Shopify. The Motley Fool owns and recommends Shopify. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV.

More on Stocks for Beginners

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Emerging Canadian AI Companies With Big Potential

These tech stocks are paving the way to an AI-filled future, but still offer enough growth ahead for a strong…

Read more »

Young Boy with Jet Pack Dreams of Flying
Tech Stocks

Is Constellation Software Stock a Buy, Sell, or Hold for 2025?

CSU stock has long been a strong option for high growth, high value stocks. But are there now too many…

Read more »

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

Asset Management
Stocks for Beginners

TFSA: 4 Canadian Stocks to Buy and Hold Forever

Thinking about what to buy with the new TFSA contribution space in 2025? These four Canadian stocks are worth holding…

Read more »

concept of real estate evaluation
Stocks for Beginners

2 No-Brainer Real Estate Stocks to Buy Right Now for Less Than $1,000

These two real estate sector-focused stocks have the potential to deliver strong returns on your investments in the coming years.

Read more »

engineer at wind farm
Energy Stocks

Invest $20,000 in This Dividend Stock for $100 in Monthly Passive Income

This dividend stock has it all – a strong outlook, monthly income, and even more to consider buying today.

Read more »

stocks climbing green bull market
Stocks for Beginners

3 TSX Stocks Soaring Higher With No Signs of Slowing

Don't ignore stocks just because they look like they're at a high price. Instead, see exactly why they've driven so…

Read more »

Middle aged man drinks coffee
Dividend Stocks

Here’s the Average TFSA Balance at Age 35 in Canada

At age 35, it might not seem like you need to be thinking about your future cash flow. But ideally,…

Read more »