Retirees may think all they need is quick cash when it comes to investing in retirement. That couldn’t be further from the truth! Yet there certainly is a fine balance between buying some growth stocks for quick cash and investing in a stock with 1% gains.
You’re still living your life!
When investing during your twenties and thirties, you’re hoping you’re not going to need to take out cash any time soon. This allows you to invest long term, watching your shares climb higher and higher as the decades go on.
Yet during retirement, there is a shift. You can’t afford to have your money just sit there because you’re going to need it right away. Right? Well, that’s somewhat true. While there’s certainly going to be an amount you need to take out in retirement, there should still be a long-term investing strategy available.
After all, your retirement years are going to be about fun. But after that, there’s the aging years. Years when you’re not going to be able to invest anymore and may need more money on hand for chronic care conditions. These are items you are going to want to figure out now, and see how much you may need down the line.
With that in mind, there is certainly still time to consider picking up shares of stocks to hold over the next decade or so. These are the two I’d consider first.
Hydro One
When it comes to investing, utilities are a strong choice. However, Hydro One (TSX:H) might just be the best of the batch. There is still so much room for this stock to grow, yet because it hasn’t been around long retirees may be a bit unsure of it.
That’s where analyst recommendations and analysis come into play. In the case of Hydro One stock, the company looks like a winner thanks to its investments in renewable energy, coupled with providing most of the power for Ontario. Which just so happens to be Canada’s most populated province. What’s more, the Province of Ontario holds a 47% stake in the company!
While Hydro One stock isn’t in value territory, it’s still a long-term hold to consider during the next decade. Shares are up 11% in the last year, though down 5% in the last month, providing a nice little dip. Investors will also gain a 3.15% dividend yield as of writing. The stock has grown 72% since coming on the market. Should that occur again in the next decade, your retirement will start looking pretty good.
Royal Bank of Canada
Now if you’re worried you might need cash during another downturn, then the Big Six banks can be a pretty scary place. While Canadian banks have provisions for loan losses and come back quickly after downturns, that doesn’t help during the downturn.
Yet among the Big Six, Royal Bank of Canada (TSX:RY) has been more protected than the rest. This likely comes from its incredibly lucrative wealth and commercial management sector, as well as its emerging and capital markets investments.
Now the bank remains in value territory trading at just 12.2 times earnings, with shares down about 6% in the last three months. However, shares are down just 1% in the last year, while other banks remain in the double digits. I’m not saying this is going to be the case every downturn, but it does show the protection Royal Bank stock offers. All while offering a dividend yield at 4.31% as of writing, and shares up 107% in the last decade.
