Canada markets closed
  • S&P/TSX

    -174.18 (-0.76%)
  • S&P 500

    -128.61 (-2.31%)
  • DOW

    -504.22 (-1.25%)

    -0.0002 (-0.03%)

    -0.07 (-0.09%)
  • Bitcoin CAD

    -782.69 (-0.86%)
  • CMC Crypto 200

    -24.16 (-1.77%)

    -16.70 (-0.69%)
  • RUSSELL 2000

    -47.89 (-2.13%)
  • 10-Yr Bond

    +0.0470 (+1.11%)
  • NASDAQ futures

    +82.00 (+0.43%)

    +3.32 (+22.55%)
  • FTSE

    -13.68 (-0.17%)
  • NIKKEI 225

    -439.54 (-1.11%)

    -0.0001 (-0.01%)

Have $500? 2 Absurdly Cheap Stocks Long-Term Investors Should Buy Now

Image source: Getty Images
Image source: Getty Images

Written by Joey Frenette at The Motley Fool Canada

You don’t need a significant sum to get started investing, especially if you’re a young person who’s looking to learn the ropes before you really start putting new money to work. If you have a broker that allows low-cost (or even no-cost) trades, perhaps $500 is a good point to get started. Of course, a low-free, vanilla index fund that tracks the S&P 500 or TSX Index is good enough to get the job done. You can simply buy and forget with such index funds or exchange-traded funds (ETFs).

However, if you really want to learn more about the process of picking your own stocks, I’d argue that it can’t hurt to put in your research by analyzing companies that you’d be tempted to buy with relatively small amounts. Sure, a mockfolio is good enough to get the job done.


However, I’d argue that you may also be likely to speculate and overextend on risk with money you know isn’t the real deal. In any case, this piece will focus on two Canadian stocks I view as underpriced that new investors may wish to consider picking up right now, provided your broker doesn’t charge more than $6 per trade.

With the rise of no-free trading, it may not make much sense to pay $9.99 per trade to invest a sum as small as $500. In any case, if you have a low-cost broker and are ready to put in the homework to build your starter portfolio, you’ve come to the right place. Here are two that are worth checking out as we inch closer to the heat of the summer!

Royal Bank of Canada

Royal Bank of Canada (TSX:RY) is Canada’s largest bank and it’s also one of the better-performing of the Big Six banking cohort in recent years. The stock recently hit new all-time highs, just shy of $150 per share, before pulling back to around $142. I think the more than 4% pullback is unjustified and could represent a great buying opportunity for new investors who like solid dividends.

At writing, shares trade at 13.1 times trailing price-to-earnings (P/E) ratio to go with a 3.96% dividend yield. Of course, RY stock isn’t a deep-value play, given some of its peers are struggling to sustain gains out of their depths.

However, when it comes to Royal Bank, it’s one of the bluest blue chips of the group. Also, the HSBC Bank Canada acquisition is a stellar deal that should unlock value for long-term shareholders. As a “gold standard” banking play, RY stock is one of the names you can buy and forget about for years at a time.


Shopify (TSX:SHOP) is a riskier, high-growth stock for new, young investors who really want to build their market “legs.” Heightened volatility may be perceived as a risk, but for those who know how to navigate tougher terrain, the rewards (growth) could be substantial over the long term.

Shopify stock is attempting to rally after a brutal implosion suffered back in May on a sub-par quarterly earnings report. I think the quarter, though not incredible, wasn’t deserving of a substantial plunge.

On Friday, the stock soared 4.6% in a day as a new bull stepped forward in the analyst community. Given Shopify’s massive market opportunity and its impressive tech talent, I’d be inclined to buy the $119.6 billion Canadian tech titan on the way up.

The post Have $500? 2 Absurdly Cheap Stocks Long-Term Investors Should Buy Now appeared first on The Motley Fool Canada.

Should you invest $1,000 in Royal Bank of Canada right now?

Before you buy stock in Royal Bank of Canada, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Royal Bank of Canada wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $17,363.76!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 26 percentage points since 2013*.

See the 10 stocks * Returns as of 6/3/24

More reading

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.