Investing in Stocks for the Long Term (2023)

While investing in stocks used to require significant time and effort, modern online brokerages have made it easier than ever for Canadians to build wealth through the stock market. By opening an account with a discount broker and purchasing a diverse portfolio of high-quality stocks, long-term investors stand an excellent chance of seeing their capital appreciate substantially over the coming decades.

Choosing an Online Brokerage

The first step is selecting a brokerage that suits your needs. Discount brokers like Questrade and Wealthsimple Trade allow investors to trade Canadian and U.S. stocks for low fees. Their intuitive platforms simplify the process of researching companies, placing orders, and tracking performance. For active traders, Questrade's advanced tools provide powerful functionality, while Wealthsimple Trade's zero-commission model makes it very cost-effective for buy-and-hold investors.

Implementing a Long-Term Strategy

Rather than trying to time the market or chase short-term trends, focus on identifying companies with strong fundamentals, attractive valuations, and long runways for growth. Blue-chip stocks in stable industries like consumer staples and utilities provide a degree of stability, while growth sectors like technology and healthcare offer higher upside potential. Reinvesting dividends is a simple way to steadily accumulate more shares over the years. Rebalancing periodically ensures your allocation to each sector stays within your desired risk tolerance. With patience and discipline, compound returns can grow significantly given enough time in the market.

The Benefits of a Buy-and-Hold Approach

History shows that markets tend to rise over periods of 10 years or longer, despite short-term volatility. By investing for the long haul, you benefit from dollar cost averaging and allow your winners to really run. Taxes are minimized with a buy-and-hold strategy held outside a registered account since capital gains are only realized upon selling. And selecting a globally diversified portfolio of high-quality, income-producing stocks is a virtually hands-off way to participate in the wealth-generating power of compound returns. With the right brokerage and a long-term mindset, building wealth through stocks has never been more accessible.


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