How to use HD photos on small canvas without losing quality?

Hi there,

I'm a beginner with Photoshop, currently making a cover image for a Facebook page in a photomontage style. All the tutorials I've seen say that my canvas should be around 850 x 351 to fit the dimensions on FB, so I've been selecting, copy and pasting HD photos, and always resizing them to fit the small canvas. I've noticed that the quality of the images really deteriorate this way and I can't figure out how to fix it. I've done some research about resizing and changing resolutions but it's just too confusing for me. I also can't tell if the quality gets worse the more I move around the images and add adjustments. Would it solve the problem if I create the cover image on a bigger canvas and resize it at the end?

Thanks in advance for any help!