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The Best Stocks to Invest $50,000 in Right Now

Alex Smith

Alex Smith

2 hours ago

5 min read 👁 1 views
The Best Stocks to Invest $50,000 in Right Now

If you have $50,000 to invest, the best thing you can do is diversify that investment across multiple stocks. The market is incredibly volatile these days. Overexposure to any one sector or industry can be extremely damaging to a portfolio if market sentiment sours in that specific industry. The rapid decline of software stocks is a perfect case in point.

Amply diversify and slowly build your stock positions

If you are deploying a handsome sum of capital (like $50,000), it is prudent to dollar-cost average into a position over several months and slowly build your position. Given how topsy-turvey the market is, you are likely to get better opportunities to fill out a position over the course of a year.

It also depends how much $50,000 means in your broader portfolio. If it is just 5% of your overall portfolio, you can be more generous to one position.

However, if the $50,000 is your entire portfolio, you are smart to split that between 10 and 15 stocks. If you are looking for a few places to start today, here are two stocks I would be looking to build a position right now.

Descartes Systems: Beaten down but ready to rise

Descartes Systems Group (TSX:DSG) has been smacked in the SaaS-apocalypse. The market has applied a shoot-first, ask questions later mentality to software stocks like Descartes. It is down 36% in the past year.

Descartes is more than just a software stock. It operates the global logistic network where around 65% of global trade flows. Descartes collect proprietary data. It can use this data to create AI applications that drastically streamline its customers businesses. It is already using AI to automate work flows and reduce operating expenses.

The company has a tonne of cash, no debt, high margins, and strong cash flows. If anything AI will be a net positive for this business. You can buy this stock at it its cheapest valuation in the past 10 years. It provides investors a very attractive opportunity here.

Secure Waste: Stable and growing

If you just can’t stomach the volatility of software stocks right now, you may want to look at Secure Waste Infrastructure (TSX:SES). This is an interesting stock because it trades like an energy stock, but its business is much more stable and resilient than an energy stock.

Secure operates over 80 waste disposal, water management, and recycling facilities across Western Canada. It has such a strong competitive moat that the Canadian competition authority forced it to sell part of its portfolio to a peer. Secure earns industry leading margins and around 80% of its income is recurring. It generates very attractive cash flows.

Secure’s stock trades at a near 30% discount to other waste industry leaders. As it continues to prove out the strength of its business model, investors should see that discount narrow. In the meantime, the company has been very aggressive at share buybacks. Since 2024, it has bought back nearly 30% of its shares.

While it is not as cheap as it was this time last year, there is still an opportunity to add Secure stock at an attractive valuation (and a 2% yield).

The post The Best Stocks to Invest $50,000 in Right Now appeared first on The Motley Fool Canada.

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Fool contributor Robin Brown has positions in Descartes Systems Group and Secure Waste Infrastructure Corp. The Motley Fool recommends Descartes Systems Group and Secure Waste Infrastructure Corp. The Motley Fool has a disclosure policy.

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