Retirement should be a time when investors can worry less about cash flow. However, if you’re aiming to retire soon, it might be that retirement is instead causing you a large amount of stress. Especially with TSX stocks down by incredible amounts in 2023.
However, it looks as though there might be some light at the end of this dark tunnel. Analysts continue to weigh in believing that there is going to be a positive end to 2023. That’s certainly becoming the case in the United States, where analysts such as Tom Lee forecast the S&P 500 reaching record highs.
Even so, retirees should be careful. Instead of looking at the riskier growth stocks, look to blue-chip stocks that provide a deal right now. Then, couple that by placing these investments in your Tax-Free Savings Account (TFSA). Combined, you could create a superior retirement portfolio for 2023 and beyond.
What to consider
Investors likely learned, retirees included, that companies aren’t the best choices just because they’re trending. This lesson was apparent during the surge in share prices in 2020 and 2021, followed by the drop in 2021 and 2022, and now continuing in 2023.
Yet now, it seems that investors have started to hoard their cash instead of investing it at all. That can be just as dire a mistake. If you’re hoarding your cash and aren’t making interest on it at all, or collecting dividends, it will remain the way it is. It won’t rise the way inflation does, but instead collect dust.
That’s why it’s still important to invest even during downturns, but perhaps shift your focus to other investments. That might mean jumping in on a blue-chip stock while it’s down 10%, knowing from research that it will rise back. It might be choosing an exchange-traded fund (ETF), or even investing in guaranteed investment certificates (GIC).
For me, I would go with the drop in blue-chip stocks. You can find many that are down now, but have a long history of growth and more to come. In that case, these are the ones I would choose.
TFSA stocks to consider
If you want stability, then you need to consider blue-chip stocks for your TFSA. These are companies that have become household names, with practically every Canadian – investor or not – knowing the company you’re speaking of.
In that case, the first option I would watch is Sun Life Financial (TSX: SLF). Sunlife stock provides insurance and asset management across North America and Asia. While insurance is its life blood, its asset management services have grown to provide about 38% of its adjusted earnings, as of writing.
What’s more, higher interest rates tend to be good for insurance companies such as Sun Life stock. The stock should hit mid to high single-digit growth in revenue and earnings throughout 2023. This means it should also continue growing its dividend, with the company currently holding Dividend Aristocrat status. The stock currently offers a 4.42% dividend yield, far higher than its 3.86% five-year average, and trades at a valuable 12.7 times earnings as of writing.
Another strong option is TFI International (TSX: TFII), which has seen immense growth since the boom in shipping that came with the pandemic. The trucking and logistics company continues to keep a solid balance sheet, making smart acquisitions during the last few months, and indeed years. TFI stock managed to take advantage of struggling companies and create a massive network at a discount.
It’s important to note that although the company’s earnings reports fell below estimates, this stock still deserves a place on your radar among TFSA stocks. Once these acquisitions are put to work, especially during a stronger economic environment, it should bring in more earnings than ever. This should also allow the stock to increase its dividend once more. Shares of the blue-chip stock currently trade at 13 times earnings, with its 1.23% dividend yield nearly double its five-year average yield.
Bottom line
Now isn’t the time to panic, but I wouldn’t blame you for not wanting to get greedy either. Retirement can be stressful, especially if all that cash you’ve worked so hard for goes down the drain. Instead, place these blue-chip stocks on your watchlist, popping them in your TFSA when value strikes. You’ll then be able to collect dividends, and increase returns for decades to come.
