Trump tariffs have increased the fears of inflation and a slowdown in certain sectors. If the tariffs materialize, investors might see a steep dip in their portfolio value. If you are retiring this year or have already retired, you might want to own low-volatility stocks that can give you a stable income even in times of uncertainty. The TSX has such stocks that are retiree-friendly and worth owning in 2025.
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Stocks retirees might want to avoid in 2025
As a retiree, you might want to avoid stocks whose performances are dependent on economic growth. For instance, airline stocks like Air Canada and Cargojet could be severely affected by rising geopolitical tensions and a slowing economy. The trade between America and Canada could be stressed, reducing demand for air cargo.
You also might want to steer clear of automotive stocks like Magna International and BlackBerry as America is one of the biggest markets for automotive. The free trade agreement is a pre-requisite for the industry as auto components cross the American, Canadian, and Mexican borders several times before they are assembled in the market they are sold.
A decrease in the share price could eat up a significant amount of your retirement savings, leaving you with fewer investments.
Retiree-friendly stocks to own in 2025
As you near retirement, it is a good practice to gradually move your portfolio to resilient stocks with consistent growth and stable income. Now is a good time to up your defensive game and invest in the below three stocks to prepare your portfolio for every market cycle.
Slate Grocery REIT
Slate Grocery REIT (TSX: SGR.UN) is a perfect defence stock for the current economic scenario. A looming trade war could strengthen the U.S. dollar and make several American goods expensive. A higher price for goods could reduce consumer’s discretionary spending. However, grocery stores would likely remain unaffected by an economic slowdown, if any.
Slate Grocery REIT has 116 properties in 23 states of America, of which 46% is leased to supermarkets and groceries. With a shortage of vacant and affordable retail spaces, Slate Grocery REIT might continue to enjoy high occupancy and pay regular monthly distributions.
As the real estate investment trust earns rental income in U.S. dollars, it pays distribution in U.S. dollars. However, Canadians get the payout in Canadian dollars. A weaker Canadian dollar could mean higher payouts from Slate Grocery REIT.
Telus Corporation
Telus (TSX: T) stock will remain unaffected by the looming trade war and economic slowdown. It earns revenue from Canadians who subscribe to its communication and broadband services. A possibility of an economic slowdown could encourage the Bank of Canada to accelerate interest rate cuts, allowing Telus to restructure its debt and reduce interest expenses. A 25-basis point rate cut could increase Telus’s net profit by $4 million.
The stock is trading near its pandemic low, creating an opportunity to lock in a 7.78% annual dividend yield. The management plans to increase its dividend by 7% this year. It has already announced a 3.5% dividend growth in January.
Constellation Software
While the above two dividend stocks can give stable income in 2025, Constellation Software (TSX: CSU) can help you grow your overall retirement portfolio by 20-30% in 2025. Constellation acquires vertical-specific software companies with mission-critical applications and stable cash flows. They reinvest these cash flows to acquire more companies, thereby growing the market value of Constellation’s share price.
Constellation has proved its resilience for over 15 years. It has a five-year compounded annual growth rate of 20% despite turbulent economic conditions. The stock is already close to $5,000 and could reach $10,000 by 2030.
Retirees takeaway
Do not make hasty decisions with your retirement pool. You do not want to lose your life’s savings on one wrong investment. Consider diversifying your portfolio in low-volatility investment options.
