Business & Investment

Two TSX shares that young investors need to buy and hold forever

Young investors need to focus on buy and hold stocks. Not only is this investment strategy easy to implement, it has also proven to be the most successful. Warren Buffett has benefited from this strategy for decades.

But which stock can you keep in possession for almost a lifetime? The following two options are the best bet.

This is already a reliable stock

Thousands of people are already rich by buying and holding Embridge (TSX: ENB)(NYSE: ENB) stock. Equities have generated double-digit annual profits for almost 30 years.

Embridge was a dream for young investors. This is a great case of buying once and then continuing to buy.

But why was Embridge so successful?

First, it operates in a trillion-dollar industry: energy.Young investors should focus Big An opportunity set like this. If you want to own a company that grows for decades at a time, you need to identify an industry that can host such long-term growth.

Second, Embridge owns a significant asset in the supply chain. On the one hand, there are oil producers. On the other hand, there are oil consumers. The process in between is managed by Embridge, the largest pipeline operator on the continent. About 20% of North American crude oil flows through infrastructure.

Owning a pipeline is similar to owning a toll road. If people want to transport something, they have to pay. Also, the world is short of structural pipeline supplies, so existing operators will win.

There is only one problem. Oil is a dying market. Sure, we will consume smooth material over the next few decades, but there is no doubt that we are on the other side of the bell curve.

Embridge is a great stock, but it’s no longer suitable for young investors. Thankfully, the next stock starts where the embridge was interrupted.

Young investors should choose this instead

Oil of the future is renewable energy. The writing is already on the wall.

Over $ 1 trillion Invested The last 10 years of renewable energy projects. Bloomberg Energy We believe that the next decade should bring an additional $ 10 trillion in investment. The investment flow is changing, Brookfield renewable (TSX: BEP.UN)(NYSE: BEP) to win.

Like Embridge, Brookfield owns significant assets. However, instead of pipelines, they own power generation facilities such as hydro, solar and wind infrastructure. After that, we will sell the power generation under a long-term contract. This is a dream of a young investor.

When renewable energy facilities are built, marginal costs will be nearly zero. They are impossible to compete, that is, they have their own market. And because Brookfield’s projects will exist for decades to come, companies just have to sit down and collect cash.

Conclusion

Brookfield is building a renewable energy empire. The momentum will last for decades and early investors will get the most rewards. But Brookfield isn’t the only stock currently worth buying.

More than ever, young investors need to maintain diversification. We are experiencing the rise and fall of multiple industries, from energy to technology. Owning some promising stocks ensures that you take advantage of every available opportunity.

Our professional stock picker has curated a list of stocks to buy now, especially for young investors.

10 Best Stocks to Buy This Month

Ian Butler, a well-known Canadian investor, has nominated 10 shares for Canadians to buy today. So if you’re tired of reading about getting rich in the stock market, today may be a good day for you.
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Motley Fool owns and recommends a stake in Enbridge. Stupid contributor Ryan Vanzo has no position in any of the shares mentioned.

Two TSX shares that young investors need to buy and hold forever

https://www.fool.ca/2020/12/27/2-tsx-stocks-young-investors-should-buy-and-hold-forever/ Two TSX shares that young investors need to buy and hold forever

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