It is the Registered Retirement Savings Plan (RRSP) season. The RRSP deadline for the 2022 tax year is March 1, 2023. Canadians should take a proactive approach. If possible, save and invest regularly in your RRSP instead of delaying until RRSP season to make contributions, especially if you know how much you’ll be earning (and therefore know the size of contribution that makes sense).
Because we have a progressive income tax system in Canada, it means the more income you earn in a year, the more you will be taxed for your next dollar of income based on your marginal tax rate. Consequently, in many cases, it makes sense to make numerous RRSP contributions every year instead of a big lump sum contribution in a single year.
Here are some solid dividend stocks you can consider buying and holding for passive investing. That is, you can add to your positions over time opportunistically on dips.
U.S. dividend stocks
U.S. dividend stocks that pay qualified dividends could be an excellent addition for your investment portfolio. U.S. stocks can provide more diversification in terms of sector and geography exposure. By investing these stocks in your RRSP (or RRSP turned Registered Retirement Income Fund in the future), there are no U.S. foreign withholding tax on the dividends — unlike holding the shares anywhere else. You want to hold U.S. stocks that offer nice dividend yields in your RRSP/RRIF.
One U.S. dividend stock that looks interesting right now is Public Storage (NYSE:PSA). Rising interest rates increased the cost of capital for companies and brought stock valuations down, including for the industrial real estate investment trust (REIT) in the self-storage space.
Earlier this month, the REIT increased its common stock dividend by a whopping 50%, boosting its dividend yield to about 4% at writing. It could be a good time to pick up the value stock that can continue growing at a stable rate of about 6%.
At $300 per share at writing, analysts believe the stock trades at a slight discount of about 11%. So, excluding valuation expansion potential, the stock might deliver annualized returns of about 10% over the next few years.
Other dividend stocks
You can also invest in other quality dividend stocks right on the TSX if you have excess room in your RRSP. For example, Brookfield Infrastructure Partners L.P. (TSX:BIP.UN) stock has dipped meaningfully by about 17% from its 52-week and all-time high. The utility has a proven track record of execution and delivering market- and industry-beating returns. Over the last decade, it returned about 16.8% per year, which roughly doubled investors money every 4.3 years, approximated by the Rule of 72.
It owns and operates a portfolio of long-life infrastructure assets that are diversified across industry and geography. Therefore, it has unlimited opportunities for investment based on the best risk-adjusted returns in any economic environment.
At $46.60 per unit at writing, the stock yields about 4.4% and analysts believe it trades at a discount of approximately 20%.
Foolish investing takeaway
Grow your funds tax free until retirement, at which time you have to withdraw a certain percentage every year that will be taxed as ordinary income. Currently, Public Storage and Brookfield Infrastructure Partners are decent dividend stocks for consideration in an RRSP.
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.
