Investing is one of the few fields where being lazy may actually work in your favour. Indeed, with the rise of meme trading and commission-free trading platforms (those that still charge per trade will feel the pressure to reduce their commission fees over time), the barriers between you and making that next trade are as low as ever. But just because it costs you little (or nothing) to hit the buy or sell button does not mean you should.
Arguably, the less you do, the more you’ll allow your investments to flourish, and the less you’ll follow the herd into or out of stocks or the broad market, possibly at a less-than-ideal time. Perhaps it is a good thing that it costs something to hit the buy or sell button. That way, we’ll be sure to put in the homework and really take the time to ensure that we’re getting our money’s worth and not simply making our brokerage or bank rich with all that trading activity.
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TFSA investing for the lazy investor
Furthermore, excessive trading in a TFSA (Tax-Free Savings Account) is a detrimental practice, as the Canada Revenue Agency (CRA) may classify it as business trading. If they do, penalties and fees are likely to follow, kind of similar to a speeding ticket.
At the end of the day, lazy investing involves buying and holding onto truly sound long-term investments, potentially for years at a time. If a stock’s intrinsic value or the sum of its future discounted cash flows is far higher than its market share, then it makes sense to sell. However, making a sell decision based on a startling headline, I think, is detrimental to one’s wealth.
In any case, here are dividend growth stocks that I think ought to be worth a near-permanent (no stock is really a name to hold forever) spot in one’s TFSA. And if they pull back, they’re even better bets. So, if you’re ready to buy and do nothing (more laziness, the better), consider the following plays, which I view as perfect for lazy investors who don’t care to make more than a handful of trades in any given year.
Royal Bank of Canada
Royal Bank of Canada (TSX:RY) is a shining star on the TSX Index, especially this latest bank earnings season. For the latest quarter, Royal Bank knocked one out of the ballpark. The stock reacted by soaring just north of 5% in a day. At over $200 per share, RY shares are at fresh new highs, but they’re still worth buying, even as tariffs represent a haze of uncertainty (even cautiousness) for the quarters ahead.
With a well-covered and growthy 3.24%-yielding dividend and so much to love about that last quarter, I’d not be afraid to pick up a few shares here, provided you’re willing to add to a position on a dip back below the $200 mark. Sure, 15.9 times trailing price to earnings (P/E) may be viewed as a high price to pay for a bank stock. But the $282 billion giant has really shown it’s a king among men in the banking scene.
It deserves a premium, given its premier leadership and ability to persevere in bad times while really thriving in good times. If we are in the early days of the bank bull market, RY stock, I think, is where TFSA investors will want to be. Now up nearly 100% in the last five years, RY stock is a wealth compounder that’s a perfect fit for any long-term dividend-growth-focused portfolio.
