There are a slew of ways to add transitions between two clips, or to fade a clip in or out. But one of the quickest and easiest ways is through the use of the contexual menu.

This will simply apply a 1 second Cross Dissolve between the two clips, as well as for the audio clips. This saves a vast amount of time than the traditional method of searching for the transition in the Effects tab and dragging it onto the clips. You can tell which transition you have set as default because it will be underlined:

Don't want the Cross Dissolve as your default transition?

Now whenever you right click to quickly add a transition, you will see "Add Transition Page Pel" (or whichever transition you chose.)
Extra Hint!: Using this right-click to add transitions for video can be applied to audio clips as well!