Today, I will discuss five stocks you can consider buying for $500 and what type of returns to expect from them. I will start with passive-income stocks and then move to growth stocks.
Stocks to buy if you want passive income
If you expect to get a payout every month while keeping your invested amount safe, CT REIT (TSX:CRT.UN) is a stock worth buying. As the real estate investment trust (REIT) of retailer Canadian Tire, CT REIT enjoys stable cash flow from rent. The REIT pays 75% of its distributable cash flow as monthly distributions and increases them by over 3% annually.
CT REIT’s stock price depends on the value of its property portfolio. When the interest rate hike began in April 2022, property prices slumped as mortgages became expensive. CT REIT’s stock price fell 17% throughout the rate hike. But now that the U.S. Fed has hinted at a rate cut in 2024, CT REIT’s stock price is about to turn around. It has already surged 11% in two months and could rally further.
Another stock that fell 26% during the rate hike and is now reversing its course is BCE (TSX:BCE). It has already surged 4% as a rate cut could ease the interest expense that has been eating up its profits. BCE can give you dividend income every quarter for years and even grow it. The 5G trend will help BCE support its dividend growth as it opens many new cloud opportunities for the telco.
Now is a good time to buy the two stocks as they have just begun a recovery rally. If you have $500, you can consider buying these two stocks and lock in a 6.1% and 7.1% dividend yield, respectively, and a chance to grow your $500 investment by 10-15%.
Stocks to buy if you want your invested amount to grow
While BCE and CT REIT can give you passive income, they may not be able to double your money. For that, you need growth stocks. Such companies don’t give payouts, but their stock price volatility could give 20-50% capital appreciation.
Air Canadastock
Air Canada (TSX:AC) stock is my first pick, as it is trading at a sweet spot of $18. It is a cyclical stock that tends to cross the $24 price during summer as the airline sees an influx of leisure travellers. The airline has improved its fundamentals, with its 2023 net profit surpassing its pre-pandemic profit levels.
Despite rising profits and falling debt, Air Canada has been slow to pick up because the airline diluted its shares by issuing new shares during the pandemic. But the worst is over for the airline, and it is on track to generate higher profits and add value to shareholders in the coming five years. If you want short-term profit, you can consider selling the share at the $24 price point in May or hold it for the long term to grow your money severalfold.
Magna International
Magna International (TSX:MG) stock saw a sharp dip of 5% in two days after Goldman Sachs downgraded it due to slower growth in content per vehicle and a slow production ramp from some automakers. The overall automotive market has had a slow year due to monetary tightening, but Magna has the potential to grow when electric vehicle (EV) sales pick up. It is a stock to buy at every dip because Magna stock could be among the big winners when the EV trend returns.
Ballard Power Systems
My final pick is a high-risk hydrogen fuel cell stock Ballard Power Systems (TSX:BLDP). While this relatively new technology has ups and downs, the company is prepared to address the challenges with its $783 million cash reserve. It can see a triple-digit surge in the long term if the green hydrogen fuel cell technology gains wider acceptance.
Warren Buffett says, “Risk comes from not knowing what you are doing.” You can hold the above stocks while they are on track with your expectations.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
