If you’re a Canadian who has invested in your Tax-Free Savings Account (TFSA) every year since 2009, you now have an added $7,000 this year! While that can be great news, it’s also a bit scary these days. Investors want to get in on the stocks that are going to do well in the next few months and years, but it’s unclear where that might be.
That’s why I would look to consistency instead of growth options. That consistency should be in both how you’re saving, how you’re investing, and what you’re aiming for. So today, let’s look at how to create a bulletproof investment portfolio, starting with that $7,000.
What are your goals?
If you’re looking to create a monthly passive-income portfolio, that’s great. But what are those goals for? Are you hoping to create a lot of cash immediately? Why? Or is this an eventuality you want to set up for retirement?
Whatever your goals are, certainly go meet with your financial advisor to discuss them before you invest even a penny. These goals are basically worthless if you’re not meeting with them to discuss what you can afford to invest, and what you hope to create in your portfolio by certain dates.
Ideally, they will ask you to put at least some cash away in a Guaranteed Investment Certificate (GIC) right now. There are some that offer even 30-day 4.5% interest rates, and those won’t last long once interest rates come down from the Bank of Canada.
Don’t invest in just stocks
It might seem overwhelming if you’re going to take that $7,000 and invest it in a few stocks. Where on earth would you start? You can keep some aside so that you can put that cash to some run use with riskier investments. However, overall, you may want to stick to an exchange-traded fund (ETF).
A great option these days if you’re looking for monthly passive income is iShares Canadian Financial Monthly Income ETF (TSX: FIE). This ETF offers a diverse set of stocks in its holdings, as well as bonds and investments in other iShares ETFs. Therefore, you’re getting a diversified portfolio, all managed by finance managers.
This is especially ideal for long-term investing. The portfolio will be rebalanced by someone other than yourself, allowing you to invest again and again without worry. And this ETF has done quite well. You can grab a dividend yield at 7.35% as of writing, with shares up 16% in the last two months alone.
But if you’re already diversified…
Now, this ETF would certainly create a diversified portfolio that would remain bulletproof in 2024. However, if you’ve been investing year after year, as I mentioned, perhaps consider a strong future option such as Nutrien (TSX: NTR).
Analysts believe that Nutrien stock has a strong future ahead going into 2024. The market is normalizing, and the impacts of the Russian invasion of Ukraine have receded. Potash prices seem to have bottomed out, and other crop nutrients should remain down for a little while. But the company should still provide solid cash generation throughout 2024 and indeed increase substantially going through 2024.
For now, the stock looks undervalued, so for those seeking high returns and dividends, this could be a great option for a monthly passive-income portfolio. Here is what investors could achieve in 2024 by investing $7,000 and seeing it return to 52-week highs.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | PORTFOLIO TOTAL |
| NTR – now | $70 | 100 | $2.81 | $281 | quarterly | $7,000 |
| NTR – highs | $113 | 100 | $2.81 | $281 | quarterly | $11,300 |
In total, you could create passive income of $4,300 in returns and $281 in dividends. That’s a total of $4,581, or $381.75 each month!
