No matter where you are in the world, financial stress abounds. Yet perhaps it’s the worst during downturns, when investors have pretty much zero idea of what to do with their funds. Do you put it in the stock market and cross your fingers over a recovery? Find that next growth stock? Hold out on what you have? And what do you do with the savings you’re putting aside?
This last point can be especially hard if you have cash stashed in your Tax-Free Savings Account (TFSA). The purpose was to create more income, and yet here you are, sitting on cash, with no idea what to do with it. And summer is right around the corner when you’re supposed to relax!
So let’s deal with these summer stresses by investing in one stable stock that will absolutely help you sleep better at night.
What to consider
If you’re looking to decrease stress, then what you want is to have your investments pretty much out of your hands. In this case, you’re going to want to look at exchange-traded funds (ETF).
But that doesn’t necessarily mean your options become limited. There are thousands of ETFs out there, each with their own type of focus. However, what I would consider is an ETF that offers high yields, with exposure to a broad and diverse set of equities.
In fact, there are some ETFs out there that invest in other ETFs. This is like gaining hundreds if not thousands of equities in your portfolio, with the click of one button. What’s more, it will be managed by fund managers, as if you have someone investing on your behalf. Because, well, you do!
But be careful. Make sure you’re not paying high management fees, as this can take away from your overall returns. So let’s look at one I would consider if you want strong returns, dividends, and low stress.
Vanguard Balanced ETF
If you really want to reduce stress, see funds climb, and collect dividends, I would recommend the Vanguard Balanced ETF Portfolio (TSX: VBAL). What you get is in the name. The ETF has a balanced portfolio of 60% equities and 30% bonds. The investments come from the ETF investing in other Vanguard funds, including those focused on the United States market, global bonds, and emerging markets. You’re therefore getting an enormous investment from just one ETF.
What’s more, you’ll be collecting dividends as well. The VBAL ETF currently offers a yield at 2.26%, so you’ll be collecting passive income along with returns. It offers a cheap management expense ratio, currently at 0.24%. Shares are up 9% in the last year as well, providing you with some stable growth to look forward to.
And that’s exactly what investors should be seeking out this summer. Stability for their TFSA, which can be hard to find in this market. Which is exactly why VBAL ETF is a strong option. You get security, safety, dividend income, and long-term returns that keep your cash safe. No matter what the market does. And that will allow you to enjoy your summer in style.
