The S&P 500 is arguably the most well-known collection of stocks and followed index in the world. It represents many of the corporate giants in the global economy (based in the U.S.) and the most highly valued companies in the world.
Canadian investors are well positioned to take advantage of these S&P 500 stocks. The stocks can be bought through most online trading apps or conventional brokerages in Canada and can be held in registered accounts like the Tax-Free Savings AccountÂ (TFSA) or Registered Retirement Savings Plan (RRSP).
While most investors may have preferences regarding U.S. stocks or stocks in general, many S&P companies may be a good fit in virtually all Canadian portfolios. Â
Berkshire Hathaway (NYSE:BRK.B) is a massive holding company that owns dozens of companies around the globe. It’s one of the few companies that owe most of its recognition to their leader — in this case, Warren Buffett. Berkshire’s portfolio of companies represents many of his investment tendencies and preferences.
Itâs one of the safest S&P stocks you can own. Itâs fairly valued, it has a massive cash and investment pile for its future acquisitions, and the beta is 0.87. But safety is not the only reason to hold this stock. It has managed to outperform the S&P 500 stock quite consistently and returned over 220% to its investors in the last decade.
Apple (NASDAQ:AAPL) is arguably the star of the S&P and the largest tech company in the world by market capitalization and revenue. At US$2.78 trillion, its market capitalization is larger than Canada’s gross domestic product. It is one of the most successful tech companies in the world in terms of brand recognition as well, some of which can be traced back to the founder, Steve Jobs.
There are several reasons to consider Apple as an investment, including the trust institutional investors and conservative investors like Warren Buffett have in the company. Apple represents over 46% of Berkshire Hathawayâs portfolio.
However, the primary reason to consider this stock is its explosive growth potential. It has returned almost 900% to its investors in the last decade, and the number goes to four digits if you include the dividends.
Microsoft (NASDAQ:MSFT) is just as famous, if not more than Apple, and has far more global penetration, at least when it comes to software. Microsoft Windows is used in over 70% of the personal computers worldwide. It also has the second most used Cloud in the world (Azure).
Now, Microsoft is emerging as one of the largest artificial intelligence players, which is the most significant transformative force in the tech world right now.
Even though Microsoft’s compelling long-term performance, like its 950% growth in the last 10 years, is reason enough to consider holding this stock in your portfolio, it’s the tech company’s resilience that might be attractive to most investors. It has been among the giants of technology since the 80s, which is quite a feat in a sector like tech that’s constantly in a state of flux.
While U.S. stocks may seem very familiar to Canadian investors, they technically are international stocks, so buying them can add another layer of diversification to your portfolio.
The three companies are global leaders in their respective domains, and they offer a compelling combination of safety and return potential.
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* Returns as of 8/16/23
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