There is renewed hope that we’re heading towards a stronger 2024. Even if we continue in a bit of volatility, economists are predicting a soft landing for this bear market and economic downturn. This comes as we continue to see interest rates remain stable as well as inflation come down.
But that doesn’t mean you should give up on all the hard work you’ve done in the past. Today, let’s look at how you can protect your investments in 2024. And what’s more, protect and grow it beyond what you can imagine.
Get a TFSA
One of the best ways to invest and make sure you’re secure for the future is by holding a Tax-Free Savings Account (TFSA). That TFSA has multiple benefits, with one being that all returns and dividends can be taken out, tax-free. But what I like is that while you can save for long-term goals, should an emergency occur, you can take out every penny if you need to.
That makes the TFSA the perfect place to start saving for an emergency fund. To get started, start working towards putting aside three to six months of savings that would cover your monthly budget. By doing this, even if you lose your job, you should be more than covered for costs.
Get in on GIC
Furthermore, the TFSA is a great place to store long-term income. Right now is a great time to consider some ways of investing in long-term fixed income. This would include Guaranteed Investment Certificates (GICs). The GIC average rate is still at 5%. That means every year you hold the GIC, you get a 5% fixed income!
While not all of your cash should be stored in a GIC, at least a portion of it should be. This would be for long-term goals such as retirement, a house, or perhaps even your child’s future. By investing in a GIC, you don’t have to worry about market turbulence at all. And that will help you sleep at night should volatility come our way again.
Create a reinvestment strategy
Now that you’ve put aside cash for an emergency, as well as your long-term goals, some other income should be set towards a reinvestment strategy. This is where you look for stocks, exchange-traded funds and other methods of bringing in dividend income.
That dividend income can be used to reinvest right back into your investments. A great way to start is by putting aside cash every month through automated contributions. Then, have a date in mind each month for investing that amount into your investment option no matter what.
This is called dollar-cost averaging (DCA), and it can be incredibly lucrative over time. While sometimes you buy lower, others will be higher, and over time, you will see the cost “average” out. It’s a great way to maintain your investments without being overwhelmed in the process.
A strong option
So, if you’re looking to put all this to work, I would recommend investing in a strong company that’s increased its dividend yield for several years. For example, Great-West Lifeco (TSX:GWO) is a stellar option that investors can pick up and hold for years to come.
GWO stock currently holds a dividend yield of 4.75%, which can be used to invest again and again into your portfolio. It also offers a diverse set of revenue streams through asset and wealth management and insurance. What’s more, the stock continues to expand around the world and acquire more businesses. Therefore, it also offers a growth opportunity for investors.
Meanwhile, shares of GWO stock are up 43% in the last year, far outpacing any of the market indexes out there. So, while shares still have a fairly strong opportunity for growth, I would certainly consider it as a strong long-term hold — one that can be invested into again and again.
