When sinking money into the market I follow the five-year-rule: only invest money that will not be needed sooner than five years. If you may need it sooner, a money market fund like TDB8150 is a great place to park the money. Today that fund is paying 4.05%. A very nice return for a no-risk investment.
In retirement, I like to spend the dividends and leave the stock untouched. At the moment, one of my buy and hold picks is CIBC, stock exchange symbol CM. This bank stock is selling for $57.70 as of market close Friday. The dividend is $3.40 for a yield of 5.9%.
$30,000 buys 520 shares and pays one an annual dividend of $1768. With many analysts projecting a future value of approximately $70, CIBC offers the chance to make a very nice capital gain -- especially nice if the gain is inside a registered account (RRSP, RRIF, TFSA).
In interests of full disclosure, I hold CIBC in my retirement portfolio and have added to my position recently. Another Canadian bank well worth a second look is Toronto Dominion (TD). It is somewhat beaten up at the moment and thus is offering a better yield that is usually offered. I also bought a little extra TD recently. I like to take my own advice.
Cheers and good investing.
