Should retirees buy dividend stocks instead of bonds?

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Retirement

More specifically, should retirees who need a steady source of investment income hold dividend stocks instead of long-term government bonds?

In some ways, BCE is the ultimate dividend stock. It is a national institution that has been paying a steady dividend for the past 25 years.

The bond portfolio consisted of $50,000 in long-term Canada bonds which I will assume were bought and held for 25 years. By buying the bonds in 1999, the yield at the time of purchase of over 6 per cent could be locked in for the next 25 years.). These were not necessarily the best performers in their respective sectors but were representative of reliable dividend payers in those sectors, and picking three provided some much-needed diversification.

I would conclude that if your investment horizon is very short and you can’t afford a capital loss, you might simply put all your money into bonds or GICs or maybe T-bills.

 

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