Every person has different financial goals. Some invest to build wealth, and some invest to protect it. If you have built a sizeable portfolio, you definitely want to rebalance instead of keeping that money in highly volatile stocks. For instance, many investors who bought Micron Technology stock last year saw their money grow eightfold. Although this stock is a hold as the growth potential is intact, one should consider booking some profit and protecting this wealth from any cyclical downturn.
Source: Getty Images
Everyday stocks that do a good job of protecting your wealth
Each stock has a role to play only if you know how to make use of it. Some everyday stocks, like a grocer or a banker, may not give windfall gains or a 6–8% dividend yield. However, they do give stability because of the very nature of their business. Such stocks are a great investment for protecting your wealth. You know their stock price won’t dip much and that any dip will rebound in a year.
These everyday stocks are important for the economy and enjoy the moat of consumer trust.
Loblaw stock
Loblaw Companies (TSX:L) stock is a low-volatility stock with a beta of 0.4, which is below the market beta of 1.0. Beta is a measure of volatility, and having a low beta indicates the stock is resilient to market downturns. The company has food and pharmacy retail stores and keeps adding new stores to expand market reach. Consumer demand is not a problem, which makes it a relevant stock that can protect your wealth and also give a 1% dividend yield. In fact, Loblaw tends to do well amid high inflation as consumption shifts from discretionary to essentials.
Loblaw stock has surged 244% in the last five years. It dips 8–10% at the most and rebounds quickly. You can book profits from high-growth stocks and park them in Loblaw when you don’t know where to safely invest.
Royal Bank of Canada
Royal Bank of Canada (TSX:RY) is another low-volatility stock with a beta of 0.9. As one of the big six banks, RBC is strategically important for Canada. Its share price is sensitive to interest rate decisions and delinquency rates. However, tighter credit rules and capital adequacy requirements reduce the risk, making it a resilient stock to preserve your wealth. You can get a 2.6% annual dividend yield.
Royal Bank of Canada stock has surged 48% in a year and over 100% in five years. RY can grow your wealth as per the economic scenario.
Dividend stocks that can quietly preserve your wealth
Some long-term dividend stocks, like Canadian Natural Resources (TSX:CNQ) and CT REIT, are also good options. These stocks can convert your wealth into regular payouts while the principal value remains more or less intact.
Let’s take the Micron Technology scenario. If you invested $10,000 in Micron in April 2025, you would have purchased 116 shares, whose value has now grown to $86,652.
| Month | Average stock price of Micron | Portfolio value |
| May-25 | $85.86 | $10,000.00 |
| May-26 | $747.00 | $86,652.00 |
You can withdraw 50% of this value and invest it in Canadian Natural Resources, which is trading close to $61 per share.
| Stock | Average Stock Price in May | Dividend per Share | Number of Shares Bought From $40,000 | Total Dividend Amount |
| CNQ | $60.89 | $2.50 | 657 | $1,642.50 |
A $40,000 investment can buy 657 Canadian Natural Resources shares and pay $1,642.50 in annual dividends. This dividend will keep growing as the energy company includes the dividend amount in its breakeven price of mid-$40s per barrel. It keeps enhancing its efficiency, which reduces production costs and increases the dividend portion. The company has a 25-year history of growing dividends at an average annual rate of over 20%. By booking a $40,000 profit, you secured your windfall gain and assured a regular payout from it. Meanwhile, the remaining $46,652 in Micron can enjoy the future rally.
Hence, you always see small corrections in stocks after a splendid rally. Smart investors book partial profits to protect the wealth a growth stock has created.
