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Seeking cash flow

by | Aug 24, 2012 | OTHER, SELF-PUBLISHED

Q – What types of investments do you recommend to invest in, given the continued uncertainly in the stock market? I am looking for stocks that provide cash flow. – Jim W., Fort Erie, Ontario

A – There is no question that in today’s markets, it’s a tough time to be an investor. Depending on your risk tolerance, I would recommend you focus on funds or stocks that generate cash flow in the form of dividends or interest, and underweight stocks that are higher risk, like speculative small-cap resource stocks, for example. Look instead for big blue-chip stocks that have a record of consistent and increasing dividend payments in the consumer sector – for example, food, beverages, tobacco, and household items. These types of stocks are considered non-cyclical, because they are always in demand, no matter how well the economy is performing.

Real Estate Investment Trusts (REITs) are another good option if you are looking for income. They trade like a stock on the major exchanges, but they are in fact structured as trusts. REITs typically invest in real estate through ownership of properties like shopping malls, apartments, or warehouses, which produce a steady rental income stream. Some may also hold mortgages. REIT Income is distributed back to shareholders. Typically REITs offer high yields and give you direct exposure to the commercial real estate market.

Depending on your situation, I’d also consider adding a fixed-income component to help cushion your portfolio in the event of a market downturn. – R.T.



© 2023 by Robyn K. Thompson. All rights reserved. Reproduction without permission is prohibited. This article is for information only and is not intended as personal investment or financial advice.

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