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If you’re retired, you might bemoan the lack of high-yield investments available today. With bond yields low and GICs paying almost nothing, there’s not a lot of yield out there among “safe” securities. Sure, you can throw your money in a bond fund. But if it yields less than 1%, then what’s the point? In recent years, Canada’s inflation rate has been averaging about 2%. It might be a little bit lower now because of the COVID-19 recession, but it will climb back up eventually.
The simple fact is that bonds and related instruments barely do anything in 2021. With ultra low interest, they’re little better than high yield savings accounts.
The most popular stock and ETF quotes on Globe Investor in 2020 theglobeandmail.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from theglobeandmail.com Daily Mail and Mail on Sunday newspapers.
Source: CNN Money
#1. Algonquin Power & Utilities
Algonquin Power & Utilities Corp. (NYSE:AQN) owns and operates a portfolio of regulated and non-regulated generation, distribution, and transmission utility assets in the United States and Canada. Algonquin controls 3 gigawatts of contracted renewable energy and serves 2.7 million regulated electric, water and natural gas utilities customers. While those numbers pale in comparison to NextEra’s, which will bring 3.2 GW of new renewable energy storage into service in 2020 alone, Algonquin’s fairer valuation is a key attraction.
Indeed, Algonquin’s valuation of 20x expected next 12 months earnings is one third less than NEE’s while its dividend yield of close to 4% is twice NextEra’s, despite the two companies having a very similar annual payout growth rate of 10%.
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Active Tax-Free Savings Account (TFSA) users look forward to November because the Canada Revenue Agency (CRA) makes an important announcement. If you have an account but unaware of the latest news, the new $6,000 TFSA contribution limit for 2021 is a pivotal change.
If you maxed out your limit in 2020 and withdrew $6,000 or less too, you can recontribute the same amount in January 2021 or succeeding months. In case there’s an unused contribution room, you can add it to the new space and contribute more to your TFSA.
The TFSA has become an all-important saving and investment tool for all Canadians 18 years old and above. Those who have been maximizing their TFSAs since 2009 must have a small fortune by now. Besides the instant hedge against inflation, users can derive tax savings or compensate for tax payables every tax season.
The set-up for 2021 is strong : Desjardins Securities reveals its top TSX stock picks for the new year theglobeandmail.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from theglobeandmail.com Daily Mail and Mail on Sunday newspapers.