We often talk about investing with a long-term mindset, and it’s a recommendation that several famous investors and advisors give all the time. But what exactly does it mean to invest for the long term, and how does it impact your investments if you’re still finding the best Canadian stocks to buy?
Investing is crucial, because it’s the best way to grow your money. However, there are other investments you can buy instead of stocks to help grow your money, such as GICs. And in this environment, you definitely don’t want to hold too much cash.
But the best place to invest is the stock market. And the best way to invest is for the long term. Over the years, the economy is constantly growing. It has dips and cycles, of course, but over the long run, with a continuously growing population, and technology and innovation that increases productivity, the economy is continually expanding.
Since the economy is always expanding over the long run, it’s crucial that when we find the best Canadian stocks to buy, we invest for the long term as well for several reasons.
First, having a long-term mindset helps to remind us that we are buying a business. When stocks move rapidly day in and day out, it can be easy to forget that they represent ownership in a business. So, anytime you decide to pull the trigger and invest in a company, it should be done with a long-term mindset.
Secondly, when you give yourself a longer-term horizon, you help to mitigate any short-term risk or volatility. It’s impossible to tell what may happen in the short term and which way stocks are going to move today or tomorrow.
What’s much easier to predict is how well a business can expand its operations or increase its profitability over a period of a few years. So, by investing for the long run, you not only put yourself in the right mindset, but you also help eliminate some risk.
The last reason to always invest for the long run is that the best companies will be growing rapidly and consistently for years. So, often, when you find the best Canadian stocks to buy, you’ll want to own them for years. As Warren Buffett has said before, “Our favourite holding period is forever.”
Often, investors can want to take profits when they see a stock is up big. However, if you continue to believe in the company and its ability to grow, it doesn’t make sense to sell. Instead, you’ll want to hold the business for the long haul. And only when you think the situation has changed, and you don’t believe the stock is as dominant as it was before, should you consider selling the position.
The best Canadian stock to buy today
These tips are crucial to remember to help make better investing decisions. However, they will be all for not if investors don’t find high-quality investments. So, here’s one of the best Canadian stocks to buy today that you’ll certainly want to hold for the long haul.
Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP) is an exceptional company with a portfolio of high-quality infrastructure assets all over the world. It’s an outstanding business to buy and hold long term for investors of all ages.
One of the first reasons the stock is such an excellent long-term investment is its portfolio’s diversification. Not only does Brookfield own a tonne of high-quality assets in different industries, but they are also located all over the world. Plus, essentially all of these assets are highly defensive.
The company owns assets in the midstream energy industry, utility businesses, transportation assets, and a tonne of investments in the data industry. In addition to all these reasons, though, the number one factor in Brookfield’s continuous success is its management team.
Brookfield companies are well known to be some of the best investment managers. Its why the stock targets to grow investors’ capital by 15% annually over the long run.
So, if you’re looking for a top long-term Canadian stock to buy and are committed to investing for the long haul, Brookfield Infrastructure is one of the best there is.