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These are tough markets for investors who are just beginning or who have been sitting on the sidelines with a ton of cash watching stock indexes hit new records.

Many analysts now believe that stocks are anywhere from fairly priced to grossly overpriced. No one is saying they're cheap. If you've been building your portfolio over the years, you're probably sitting on some good profits right now. In that case, your dilemma is whether to take some profits off the table or stay the course in the hope markets will continue to rise (my advice is to take some profits).

But what if you're just starting out? Here's a question from a reader that came in last week.

"I have subscribed to your newsletter for a few months and I know that in the past you recommended many stocks. However, I am a beginner in stock investing and I would like to know if you could recommend stocks with which I could begin (between 10 and 15). The reason I am asking is that certain analysts are saying that there are no more opportunities, as most stocks are expensive and also the markets are now too high. In other words, unless you have a lot of money there are no more possibilities for now. I am very lost with all I hear and read!" – Pierre L.

I understand our reader's dilemma but if he waits around for stocks to become "cheap" again he could wait a long time. Here's my advice in this situation.

For starters, focus on quality. Anyone who does not already have a stock portfolio in place should begin with core companies. By this I mean industry leaders that are going to retain that status for the foreseeable future. Typically, these firms will have a history of solid revenue growth, increasing earnings per share, regular dividend hikes, and a clean balance sheet.

Canadian issues that I regard as "core" include Bank of Nova Scotia, BCE Inc., Brookfield Asset Management, CN Rail, Enbridge Inc., Fortis Inc., Intact Financial, Suncor Energy, and Teck Resources.

In the U.S., look at AT&T, American Express, Boeing, General Electric, Google, MetLife, United Health Group, Wal-Mart, Walt Disney and Wells Fargo.

Any combination of those stocks is a good starting place for a portfolio.

Build the portfolio over time – say six months to a year. With indexes setting new records, it's not a good idea to rush out and spend all your cash at once. You could end up buying at the top of the market.

Instead, decide on which stocks you want to own and then gradually build a position using dollar-cost averaging. Keep some cash in reserve to take advantage of any market correction.

Always keep in mind that you're investing for the long term. When you make your decisions, don't worry about what the markets will do next week. Rather, ask yourself which companies are likely to be thriving a decade from now while rewarding you in the interim with dividends. If you base your stock choices on that kind of analysis, you won't go far wrong.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 3:44pm EDT.

SymbolName% changeLast
A-N
Agilent Technologies
-1.26%145.51
AXP-N
American Express Company
-0.03%227.69
B-N
Barnes Group
-0.88%37.15
BA-N
Boeing Company
+0.54%192.99
BAM-N
Brookfield Asset Management Ltd
+0.53%42.02
BAM-T
Brookfield Asset Management Ltd
+0.34%56.9
BCE-N
BCE Inc
-0.82%33.98
BCE-T
BCE Inc
-1.01%46.03
BNS-N
Bank of Nova Scotia
+1.21%51.78
BNS-T
Bank of Nova Scotia
+0.94%70.07
CE-N
Celanese Corp
+1.31%171.86
DIS-N
Walt Disney Company
+1.14%122.36
E-N
Eni S.P.A. ADR
+0.79%31.72
ENB-N
Enbridge Inc
+0.53%36.18
ENB-T
Enbridge Inc
+0.29%48.95
FTS-N
Fortis Inc
+0.36%39.51
FTS-T
Fortis Inc
+0.22%53.52
GE-N
General Electric Company
-2.55%175.53
GOOG-Q
Alphabet Cl C
+0.21%152.26
GOOGL-Q
Alphabet Cl A
+0.04%150.93
H-N
Hyatt Hotels Corp
-0.76%159.62
IFC-T
Intact Financial Corp
-0.2%220.04
MET-N
Metlife Inc
+0.26%74.11
NB-T
Niocorp Developments Ltd
+0.82%3.68
NS-N
Nustar Energy LP
+0.74%23.27
S-N
Sentinelone Inc Cl A
+2.78%23.31
S-T
Sherritt Intl Rv
0%0.28
SU-N
Suncor Energy Inc
+1.18%36.91
SU-T
Suncor Energy Inc
+0.99%49.99
T-N
AT&T Inc
+0.28%17.6
T-T
Telus Corp
+0.37%21.67
TBB-N
AT&T Inc 5.350% Global Notes Due 2066
-2.65%23.5
TECK-N
Teck Resources Ltd
+4.23%45.78
TU-N
Telus Corp
+0.63%16.01
UNH-N
Unitedhealth Group Inc
+0.32%494.7
WFC-N
Wells Fargo & Company
+0.61%57.96
WMT-N
Walmart Inc
-0.91%60.17

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