I retired more than a decade ago. I was lucky. When I left my job of some 35 years, the market was in the grip of a big bear. I was able to buy cheap. A lot of the stocks I discuss in my posts on building a retirement portfolio are among the stock that I bought at the time.
In a bear market, Canadian banks easily deliver more than four percent, many more than five percent and if the bear is truly nasty, some banks will deliver more than six percent. Since traditionally one tries to withdraw no more than four percent annually, generous yields like the above are very important.
Some folks resist investing in pipelines. Don't ignore the pipelines. Many pipelines, like ENB and TRP, yield more than six percent and sometimes more than seven. Not only are these yields amazingly high but they can be trusted.
As I write this, March 7th, 2023, there is a lot of talk about a strengthening bear market. I'm smiling and you should be too. Bear markets are good for retirees. We get to buy low and collect wonderfully high yields.
One caveat, don't put money in the market that you cannot afford to have tied up for a long time. You want to enjoy the yield, you want to live on the yield, you do not want to find yourself in a financial squeeze that forces you to sell low. Losing money is not part of the game plan.
Until you sell, you haven't locked in your loss. I bought Algonquin Power for something in the neighbourhood of $15. It then dropped to less than $9. Ouch! Since then, it has climbed to almost $11. I am sure that someday, it will hit $15 again. I am not worried in the least. The dividend was cut by 40% but AQN is still yielding about 5.5%.
If you want some good professional investment advice, find the latest advice from Morningstar. You cannot go far wrong buying the Morningstar Income Portfolio or the Morningstar Core Portfolio holdings. My portfolio often overlaps the Morningstar portfolios but I confess to weighting my holding towards the high yielding stocks.
Good luck investing!
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