Where to Invest $5,000 in October

So you have a windfall in October. Let’s take a look at the different considerations, and where might be the best place to invest.

| More on:
Doctor talking to a patient in the corridor of a hospital.

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you’ve been saving all year, putting cash away, you might have created some cash to invest this October. Or you may be one of the lucky ones with a windfall your way! Yet with $5,000 to invest in October, the decision on where to allocate your money is influenced by some significant economic shifts.

Inflation is starting to cool, and the Bank of Canada has just made the bold move of cutting interest rates by 50 basis points. This sets the stage for a more favourable investing environment, especially for sectors that thrive when borrowing costs are lower and market sentiment improves. So let’s look at a sector that might be a great place to dig into this October.

Created with Highcharts 11.4.3Extendicare PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Why now

Now, why is October a critical month for investment? First, lower inflation means companies can better manage costs, making earnings more predictable. The recent rate cut also boosts borrowing, providing liquidity to sectors that require significant capital for growth and maintenance. If you’re looking for an investment that can capitalize on these changes, Extendicare (TSX:EXE) in the healthcare sector stands out as a solid contender.

Extendicare stock is a leader in the long-term care sector, which is poised for a rebound as the healthcare industry stabilizes post-pandemic. As people live longer and the aging population grows, demand for senior care services will only increase. Extendicare stock has been performing well recently, with a year-to-date return of over 31%. The company’s ability to maintain consistent revenue, with a trailing 12-month figure of $1.4 billion, highlights its robust position in the industry.

Current benefits

Extendicare stock’s forward dividend yield of 5.3% is another reason to take a closer look. In an era of falling interest rates, dividends like this become more attractive as bond yields drop, thus making Extendicare stock an appealing income play for investors. If you’re looking for stability with a bit of growth, Extendicare stock provides a nice balance of both. Its recent stock performance has shown significant strength, with a one-year return of 59.2%, outpacing the broader S&P/TSX Composite index.

In terms of valuation, Extendicare stock has a trailing price/earnings (P/E) ratio of 13.4, indicating that the stock is reasonably priced compared to its earnings. With an enterprise value of $953.6 million, it remains relatively accessible for individual investors. The company’s strong profitability metrics, including a profit margin of 4.3% and a return on equity of 60%, show that Extendicare stock is efficiently using its assets to generate returns.

Bottom line

What makes Extendicare stock particularly compelling in October is its ex-dividend date at the end of the month. This provides an opportunity to capture the next dividend payout if you invest soon. As a long-term care provider, Extendicare is in a resilient sector that benefits from consistent demand, thus making it an ideal choice for those looking to ride out market volatility with a dependable stock.

If you’re considering putting your $5,000 in Extendicare stock this month, it could be a strategic move. The recent rate cut, combined with EXE’s strong market performance and attractive dividend yield, sets the stage for solid returns as we head into the final months of the year. Investing in the long-term care sector not only offers potential growth but also provides a hedge against market uncertainty – thus making it one of the best places to allocate cash in this shifting economic environment.

Should you invest $1,000 in Bmo Low Volatility Canadian Equity Etf right now?

Before you buy stock in Bmo Low Volatility Canadian Equity Etf, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Bmo Low Volatility Canadian Equity Etf wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

rail train
Dividend Stocks

What to Know About Canadian Pacific Railway Stock for 2025

CP stock has now gone through a major merger, so what do investors have to look forward to?

Read more »

ways to boost income
Dividend Stocks

Top Canadian Value Stocks I’d Buy for Dividend Growth and Appreciation

If you are looking for income and capital appreciation, here are three Canadian value stocks for a great total return…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Canadian Stock to Buy With $2,000 Right Now

The company’s powerful combination of growth, income, and value, positions it well to deliver solid returns, making it a smart…

Read more »

Transparent umbrella under heavy rain against water drops splash background. Rainy weather concept.
Dividend Stocks

This 10.6 Percent Dividend Stock Pays Cash Every Single Month

Are you looking to invest for a rainy day? This 10.6% dividend stock pays cash every month, irrespective of the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Market Dip: Opportunity or Risk This April?

This market dip might have investors worried, but should they be excited instead?

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Why I’d Add This Top TSX Dividend Stock to My TFSA During the Current Dip

The market is full of volatility right now. Fortunately, this top TSX dividend trades at a discount and pays a…

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Invest $20,000 in 2 TSX Stocks for $1,421.09 in Passive Income

Are you looking to bump up your passive income? Then consider these two TSX stocks.

Read more »

A plant grows from coins.
Dividend Stocks

Where I’d Invest in Canadian Value Stocks for Long-Term Compounding

When markets plunge, Warren Buffett's wisdom shines: Get greedy when others are fearful. Canadian value stocks like Scotiabank await patient…

Read more »