The federal government announced this month that it will be extending the Canada Emergency Response Benefit (CERB) by another two months. The CERB now covers a 24-week period, and that means the maximum an eligible individual can receive will be $12,000. That’s over six monthly installments of $2,000.
It’s a fair bit of money that could generate some decent dividend income for investors. Let’s take a look at how much you could have earned from a $12,000 investment, assuming you had the money available to you right from the start of the year. The purpose of this isn’t to say that you should spend your CERB payments all on stocks but to show how important it is to save and accumulate a decent amount of savings that can help generate long-term growth for your portfolio.
Growth stocks
One of the hottest stocks on the TSX this year has been Shopify. Through the first five months of the year, shares of the popular tech stock doubled in value. A $12,000 investment into the stock would’ve earned you an additional $12,000. And if you’d made that investment within a Tax-Free Savings Account (TFSA), those could have been earnings that were also tax-free.
But not all tech stocks have been as impressive this year. Shares of Amazon were up 34% over the same period. The same investment there would’ve earned you about $4,080 in capital gains. If you were bullish on self-driving cars, then a $12,000 investment in Tesla would’ve outshone Shopify and netted you a profit of nearly $14,000.
Dividend stocks
Investing in growth stocks can be hit or miss. If you were to invest in dividend stocks, however, they could produce some solid stream of income for you, potentially for many years.
Bank stocks are always a great option for dividend investors; they don’t involve much risk, so let’s start there. Shares of Canadian Imperial Bank of Commerce pay a dividend of around 6.2% annually, thanks to the stock tanking due to the COVID-19 pandemic. At that yield, a $12,000 investment would earn you $744 per year in dividend income. That’s a recurring and growing dividend that you can count on to help build your portfolio’s value over the years.
If you’re a bit more impatient and want more frequent payouts, you can opt for a stock like RioCan Real Estate Investment Trust. It pays a monthly dividend payment of $0.12 per share. If you’d bought the stock at $16, that would mean you’d be earning an incredible 9% per year in dividends. On a $12,000 investment, you’d be making $1,080 per year, which comes out to monthly payments of $90. That could be enough to help cover a bill payment or two.
Bottom line
A $12,000 investment is by no means a fortune. But the above examples show just how far you can stretch that size of an investment today. If you’re collecting CERB, it’s a good idea to put aside some of that money, if you can afford to do so, to help build up your savings. And the more you can build your nest egg, the more you can earn from it by investing it wisely, whether via growth stocks or dividend stocks.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
