The stock market has turned bearish on dividend stocks, making it an opportune time to buy them at a dip and build a bulletproof passive-income portfolio. While all investments carry inherent risks, there are ways to mitigate these risks and strengthen your passive-income portfolio.
Diversifying investments across sectors, having exposure to contrarian stocks, and buying fundamentally strong stocks near their lows are three effective strategies to minimize risk and maximize potential returns.
Two Dividend Stocks for a Bulletproof Passive-Income Portfolio
CT REIT (TSX:CRT.UN) and Timbercreek Financial (TSX:TF) are two stocks worth considering for a $10,000 investment at the current market conditions. CT REIT, which buys and manages stores of its parent company, Canadian Tire, has been consistently growing its distributions for the last 10 years by an average of 3%. With over 90% of its rent coming from Canadian Tire, CT REIT enjoys stable cash flow and annual rent increases, making it a robust investment option. However, its heavy dependence on Canadian Tire and susceptibility to high interest rates pose potential risks.
On the other hand, Timbercreek Financial, while moving in the same direction as CT REIT, has a contrarian impact on its distributions. The company focuses on providing shorter-term customized financing solutions to real estate investors, making it a unique addition to a passive-income portfolio. With a diversified investment approach and a focus on fundamentally strong stocks, investors can build a resilient passive-income portfolio with just $10,000.
