Experts say dividend stocks can offer some protection against inflation
BNN Bloomberg
As the annual pace of inflation rises, investors who depend on their portfolios to provide income may want to consider dividend paying stocks as one way to help them keep up with the rising cost of living, experts say.
OTTAWA -- As the annual pace of inflation rises, investors who depend on their portfolios to provide income may want to consider dividend paying stocks as one way to help them keep up with the rising cost of living, experts say.
Laura Barclay, a senior portfolio manager at TD Wealth, said after taxes and inflation, the yield on investments like guaranteed investment certificates and government bonds right now leaves you with a negative return on your money.
"That tells me you don't really want to live there," Barclay said.
"If you can tolerate that negative return you can probably just tolerate the volatility that you know a portfolio would produce in some manner."
Inflation has always been a risk for retirees, slowly eroding the buying power of anyone on a fixed income.
And as interest rates have steadily declined in recent decades, investors looking for yield have had to take on greater risk to find investments that provide some income, but the recent spike in inflation has brought the issue into the spotlight once more.
