Written by Brian Paradza, CFA at The Motley Fool Canada
Researching individual stocks to buy now can be time consuming. Investors looking to deploy new capital into the market in November have a lot to chew on this earnings season. Unless one has a high-conviction investment idea gleaned from a crystal ball, uncertainty and the fear of making the wrong investment decision could potentially paralyze an individual. However, you still have to save and invest in something to secure your financial future.
I will touch on two potential investment options Canadian individuals could consider when deciding on where to invest new money before the close of 2023.
Before we get into what to buy in November 2023, consider the necessity of diversifying your holdings across several assets, and asset classes. No single stock or economic sector’s unexpectedly poor performance during your investment horizon should derail your progress toward attaining personal investment goals.
How to invest $10,000 right now
If you have $10,000 available to invest this month, and this amount is material to your future financial well-being (it is to me), you should seriously consider diversifying your investments into several holdings of different assets from various asset classes.
The 60:40 portfolio is increasingly coming back in investment asset-allocation strategies for individuals post the vagaries of 2022. Fixed-income securities like bonds and short-term Guaranteed Investment Certificates (GICs) currently offer more juicy yields than they did during the past low interest rate regimes. Meanwhile, Canadian and international stocks are still as volatile as usual in 2023. Real estate investment trusts (REITs) remain largely beaten down, and yields look bloated right now. Investors are spoilt for choice.
That said, researching individual stocks and REITs could be time consuming, and consistently monitoring each position is even more demanding. Diversified exchange-traded funds (ETFs) come in handy. If you have no high-conviction idea, limited time to do your own research, and you do not belong to an investing group where dedicated analysts spend hours digging into corporate reports and filings, investing through ETFs could be your low-cost investment and diversifying option.
Two Canadian ETFs stand out today: Harvest Brand Leaders Plus Income ETF (TSX:HBF.B) and Vanguard Growth ETF Portfolio (TSX:VGRO).
One Canadian ETF to buy for top brands exposure and passive income
The Harvest Brands Leaders Plus Income ETF invests in an equally weighted portfolio of 20 of the most successful global brands and can pay you handsome passive income every month. The fund has more than $417 million in assets under management and deploys its capital buying stocks of stable, well-established U.S. large-cap businesses with leading market share positions in their given market verticals.
The ETF’s primary holdings have low business risk, and the recent news of slowing inflation in the United States could uplift investor spirits into 2024, lifting valuations higher. The ETF touts an average return on equity of 44.1% over the past five years.
Most noteworthy, HBF amplifies the dividend income from the portfolio by selling some derivatives (covered calls) to augment portfolio income. As a result, it pays monthly distributions that yield 7.8% annually. It’s an actively managed ETF that pays handsome income, and a management expense ratio (MER) of 0.93% looks justifiable.
Grow and diversify with the Vanguard Growth ETF Portfolio
The Vanguard Growth ETF Portfolio provides investors with a diversified portfolio of portfolios. The ETF essentially invests more than $4 billion of its net assets into several other Vanguard ETFs, offering investors a widely diversified portfolio of stocks and bonds.
The ETF provides 80% allocation to stocks and a 20% allocation to bonds. Further, investors gain access to returns on U.S. and Canadian stocks and bonds and a small (5.6%) exposure to emerging markets. Diversification is wide, and the fund has a low MER of 0.24% annually — it offers cheap access to diversified investment returns all at once.
Before you consider Vanguard Growth Etf Portfolio, you'll want to hear this.
Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in November 2023... and Vanguard Growth Etf Portfolio wasn't on the list.
The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 24 percentage points. And right now, they think there are 5 stocks that are better buys.
See the 5 Stocks * Returns as of 11/14/23