3 Low-Risk Investments for Canadians to Consider in 2023

Are you nervous about the next year? Let yourself sleep at night with these three great choices for the next year and beyond on the TSX today.

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While there are a lot of opportunities for investors wanting to get in on growth stocks, it shouldn’t be all that you’re buying these days. In fact, riskier stocks should be a small portion of your overall portfolio. Today, I’m going to focus on some low-risk options.

During the next year, Canadians are likely to go through a recession. That means the TSX could drop even further. However, what you want is to come out the other side strong. You also want to make sure your current investments don’t fall into oblivion in case you need them!

With that in mind, here are three options on the TSX I would consider for the next year at least that offer low-risk protection.

iShares Core Canadian Universe Bond Index ETF

iShares Core Canadian Universe Bond Index ETF (TSX:XBB) is a great option for those seeking fixed income. The aggregate bond exchange-traded fund (ETF) focuses mainly on government bonds and currently offers a 2.83% dividend yield.

Given its focus on bonds, the company does not hold any equity. So, this is a great way to balance your portfolio if its equity heavy. What’s more, this doesn’t have to be a short-term buy. While there are many short-term bond ETFs out there, this one is designed to be held long term.

The ETF costs little with a management expense ratio (MER) at just 0.10% and pays cash out monthly!

BMO High Quality Corporate Bond Index ETF

Now, having government bonds is a good option, but corporate bonds are also a high-quality, low-risk choice as well. In that case, BMO High Quality Corporate Bond Index ETF (TSX:ZQB) is a great choice for those seeking more fixed income during the next year.

This fund invests in debt securities, and, again, is a solid long-term hold for those seeking core assets. The ETF aims at a term to maturity greater than one year but less than a decade. Each bond has a rating of A or better and mainly holds the Big Six banks and insurance companies.

Again, you have a low cost and dividend to look forward to at 2.75% and 0.11% MER.

TD Bank

If you’re wanting a bit more growth in the future and higher dividends to start, and if you have some room for risk in the near term, then I would look at Toronto-Dominion Bank (TSX:TD). On the TSX today, the Big Six banks continue to do pretty poorly.

However, Canadian banks have come out the other side of recessions relatively unscathed. That’s because of provisions for loan losses. Therefore, these are some of the better choices if you’re looking for a cheap stock that’s going to recover.

TD stock currently trades at 9.54 times earnings and is down 10% in the last year. You can grab a 4.2% dividend yield as well.

Bottom line

If you’re looking for some safe options, these three stocks on the TSX today are some strong choices for investors to consider. Each offers stable long-term income as well as during this year when the market is down. So, definitely consider this option with your financial advisor today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in Toronto-Dominion Bank. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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