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As macroeconomic factors continue to impact the economy, stock market investing is becoming more risky. The Russia-Ukraine War has disrupted global oil supplies, supply chains, and increased fuel and food prices.
Inflationary conditions have been controlled by central banks. Inflation can be controlled by raising interest rates, which slows down economic growth and creates fears of recession. Inflation hit multi-decade highs of 7.7% in May, and economists expect it to go as high as 8% in June’s figures once they come out.
As part of its ongoing efforts to curb inflation, the Bank of Canada (BoC), announced a record 100-basis point interest rate increase.
These factors continue making the stock market volatile. If you’re new to investing in stock markets and are looking to make long-term investments for your portfolio, here are some suggestions. Stocks for beginners You can think about. You can also consider other options.
Fortis
Fortis (TSX.FTS)(NYSE.FTS), a Canadian utility holdings firm with a market capitalization $29.49 Billion that owns and manages several utility businesses throughout Canada, the U.S. and Central America.
The company offers electricity and natural gas utility services for around 3.4 million customers in different markets. Most of the company’s cash flow comes through highly rate-regulated and long-term, contracted assets.
Fortis is able to generate predictable cash flows, which allow it to easily fund its capital programs as well as grow shareholder dividends. Fortis stock has a Canadian Dividend Aristocrat status with a 48 year streak of dividend growth.
The company’s recent capital investment programs to expand its rate base could see Fortis deliver dividend hikes at a CAGR of 6% in the next few years. Fortis stock is traded at $61.76 per Share at the time of writing, and boasts a dividend yield of 3.47%.
BCE
BCE The Canadian telecom giant, TSX:BCE (NYSE:BCE), has a market capitalization of $58.34 billion. It is the largest entity in Canada’s largely consolidated telecom industry. The demand for telecom services will increase with each passing year. This sector will grow rapidly with the advent of 5G technology, which could provide high-speed internet access and other benefits.
BCE stock is one the largest 5G and broadband internet providers Canada. The company intends to extend its 5G service in Canada to 80% of the population by 2022, and to add 900,000. The company has strong cash flows, and could see dividend increases in the future.
BCE shares trade at $64.02 per Share at the time of writing, and have a juicy dividend yield of 5.75%. The company has made several dividend hikes in the last 14 year at a CAGR 5%.
Foolish takeaway
It is important that you remember that investing in stock markets is risky. While there are stocks that are less vulnerable to uncertainty in stock markets, equity securities cannot be immune from macroeconomic factors. You should do your homework to ensure that you only invest in high-quality companies capable of surviving harsh economic environments.
BCE stock and Fortis stock both have essential underlying businesses. No matter what happens, people will still need to have access to their utilities, internet and telecom services. Fortis stock and BCE stock could have cash flows that are safer than those of other publicly traded companies listed on the TSX.
Both stocks might not be able to provide significant short-term growth. The reliability of the underlying businesses can make them safer investments to be added to your self-directed portfolio.