Investing

Safest stock for 2%+

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  • Jan 4th, 2021 12:31 pm
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[OP]
Deal Fanatic
Feb 1, 2006
9618 posts
854 upvotes
Muskoka

Safest stock for 2%+

Looking to keep a six figure amount of leveraged funds liquid for usage outside of the stock market in the next few years, and I would like to at least earn 2% on it so I am not losing money while in the holding pattern. If I put it in HISA's, I'll be losing money.

First thought was dump it all in VEQT, but there is a Return of Capital component to that ETF that complicates taxes. So I am looking at maybe a basket of CDN stocks (dividend taxes are advantageous, and don't want currency risk), like 1 stock from major sectors.

But also considering putting it all in one single stock that is super boring and safe, to keep it simple, and thought I'd ask for ideas here. CAR.UN or MI.UN (CAPReit and Minto) seems like decent candidates. Or BAM.A? CP?

What do you think is the safest stock in Canada?
23 replies
Penalty Box
Apr 27, 2015
2307 posts
940 upvotes
OP, if you think about REIT, better to buy ETF like ZRE ... more safe than individual stock...
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Member
Jul 20, 2019
211 posts
111 upvotes
Reits are not very safe imo, div might get cut then price will drop too
Deal Addict
Dec 4, 2011
1865 posts
1471 upvotes
Montréal
BatmoBeal wrote: Reits are not very safe imo, div might get cut then price will drop too
Not all REITS are the same fyi. Just like stocks. Don't see AP or WIR (I believe even SRU and FCR will do fine as well) cutting dividends any time soon.

EDIT: OK super secret 2% tip lol
Last edited by admiralackbar on Dec 30th, 2020 10:48 am, edited 1 time in total.
Member
Dec 26, 2012
343 posts
287 upvotes
Hamilton
lol, when people send me a PM with a tip, i assume they're full of crap. anywhere from some crappy Forex scheme to shorting something or pumping some crappy penny stock. The guy is looking for a low risk safe stock, anything that is in a PM and can't be shared with the forum for people to scrutinize or vouch for is not safe.
Deal Expert
User avatar
Feb 8, 2014
22052 posts
8461 upvotes
Socially Distanced
I don't think any stock is guaranteed.
That said you can look at things like high interest savings accounts that most banks have promos for, they are often a few months at a time but are guaranteed. You can also look at segregated funds, market linked GICs, regular GICs, Canada savings bonds, US treasuries and so forth.
In fact in Rand McNally they wear hats on their feet and hamburgers eat people
Deal Fanatic
Jul 30, 2003
5883 posts
717 upvotes
Toronto
If you just want 2% you can just put it in high savings account ... that will still be below inflation (real inflation - not fake inflation FEDS tells us).

Really -
A - balanced portfolio
B - Dividend Portfolio

your top choices imo

Also, you didn't specify timeline - I assume its for long term (10+ years)
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Deal Guru
Feb 9, 2009
11549 posts
10039 upvotes
porticoman2 wrote: thats the thing isnt it about posting tips on forums.

guy wants a tip, send it in a PM, let them decide.

if they like the tip they can post back on the forum the tip was good, bad or indifferent.

and no, I wont post/PM the tip to anyone else.
But he put it on a public forum asking so the knowledge can be shared with everyone so I disagree with your method unless op specifically asked for a pm answer
Deal Guru
Feb 9, 2009
11549 posts
10039 upvotes
Anyways if your looking long term there is no blue chopper chart from the 25 years that looks better than Canadian national railway.
Member
Jun 28, 2010
316 posts
92 upvotes
Richmond Hill, ON
This thread deteriorated fast. lol
Newbie
Mar 18, 2010
45 posts
18 upvotes
Is there a reason you're bailing - do you see a crash coming? I've been considering this too, but I'm not sure how to time this bloated market.
[OP]
Deal Fanatic
Feb 1, 2006
9618 posts
854 upvotes
Muskoka
mtinaturner wrote: Is there a reason you're bailing - do you see a crash coming? I've been considering this too, but I'm not sure how to time this bloated market.
Not pulling anything out of the market.
Deal Fanatic
Jan 19, 2017
5610 posts
3133 upvotes
Bullseye wrote: Looking to keep a six figure amount of leveraged funds liquid for usage outside of the stock market in the next few years, and I would like to at least earn 2% on it so I am not losing money while in the holding pattern. If I put it in HISA's, I'll be losing money.

First thought was dump it all in VEQT, but there is a Return of Capital component to that ETF that complicates taxes. So I am looking at maybe a basket of CDN stocks (dividend taxes are advantageous, and don't want currency risk), like 1 stock from major sectors.

But also considering putting it all in one single stock that is super boring and safe, to keep it simple, and thought I'd ask for ideas here. CAR.UN or MI.UN (CAPReit and Minto) seems like decent candidates. Or BAM.A? CP?

What do you think is the safest stock in Canada?
You are right about loosing money for putting into HISA. If you can get 2% from HISA and your marginal tax rate at 50%, then the after tax return is only 1%. If inflation is more than 1%, you will loose purchasing power.
Sr. Member
Jun 2, 2020
644 posts
597 upvotes
V5y1v1
porticoman2 wrote: *there are no safe stocks*

* there are no guarantees*

* there are (as far as I can find) not anything that guarantee's better than 2% unless you can find an HISA or GIC promo.

want to say the following is not a tip, its a look at an alternative investment that produces ongoing income.

at my age I'm always looking for products that have the lowest of lows risk with a decent ongoing income.

at this stage of my life I'm not looking long term or wealth building, just ongoing income.

look at all the product profiles & overview.

I have held several Quadravest products & found *what has worked for me* are the split share series of those the preferred shares have worked best.

I hold BK.PR.A

https://www.theglobeandmail.com/investi ... BK-PR-A-T/

https://www.quadravest.com/bk-fund-features

https://www.quadravest.com/bk-distributions

https://www.quadravest.com/productsgallery

same with Brompton, another similar product

https://www.bromptongroup.com/all-products/

makes for an alternative to the ETF's the crowd may follow.
I have the other side of your split shares. I love these things.
Sr. Member
Jun 2, 2020
644 posts
597 upvotes
V5y1v1
porticoman2 wrote: the class A split shares are not for the faint of heart

as long as can live with the volatility of the class A shares & the months/quarters they dont pay ... then great.
I feel the same way. It seems like the people holding them get spooked easily (maybe because they are in current need of that money). Very volatile but in March and April there were a few selling at large (10-20%) discounts relative to NAV. Lower quality, higher risk and inconsistent payouts - still my ACB on DFN as an example is now ~$3.80. Pretty hard to beat a $3.80 stock that *has a chance* to pay out $1.20/year. Needless to say - if I were to have these at retirement I’d likely flip them to the preferred or just buy a preferred ETF. Split shares seem to get a lot of hate in investing blogs/the globe and mail but I think they’re very much under appreciated.
Deal Fanatic
User avatar
Jun 11, 2001
9421 posts
1576 upvotes
Thoughts on something like ZWC.to? 7.5% dividend and holds most of the Canadian big players. Assume much less "risky" than the splitshares strategies.
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Deal Addict
Sep 14, 2012
1852 posts
1327 upvotes
Montreal, QC
Cowboy905 wrote: lol, when people send me a PM with a tip, i assume they're full of crap. anywhere from some crappy Forex scheme to shorting something or pumping some crappy penny stock. The guy is looking for a low risk safe stock, anything that is in a PM and can't be shared with the forum for people to scrutinize or vouch for is not safe.
I'm somewhat the same in that any PMs sent to me regarding something (outside of RFD since I've disabled PMs here), I'm skeptical of the response. If someone feels the need to ask me something about what I posted, they can post their question and if someone has an answer for me, they can post their answer (which may help others)

It is like if someone mentions that he has $300k in their RRSP and has $0 in their TFSA (and has never contributed to their TFSA before even though they've been eligible since its inception) and wanted to know if they can transfer the $75,500 from their RRSP to their TFSA tax free and receive a PM stating that they can do it (tax free), if the poster doesn't know anything about TFSA and RRSP or doesn't know a lot about them (since he posted the question) the person might follow this advice not realizing that even though both accounts are registered, doing so incurs paying tax. The same PM written on the forum would have other posters correct the "advisor".

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