Looking for somewhere to invest
Question: I am 57 and thinking of retiring in about 1-1/2 years. I have a nice sum of money invested in mutual funds. I also have two rental properties from which I receive a monthly income. My thoughts are to sell one of my rental properties, which should net about $100,000. The rent, however, is providing me with a steady monthly income which I have grown accustomed to. I am not relying on the money right now while I am still working – however once I retire I would count it in as income along with a company pension.
My question: if I sell, where can I park this money conservatively to make a respectable return, plus allow me to take a monthly income from it? GICs pay very little and the capital would be locked up for the term, not allowing me to draw on it. I survived the tech bust but was hurt badly, so I really don’t want to go through another one of those now that I am close to a retirement date.
I know to make a good return you have to take some risk and that’s okay as long as it’s not too aggressive for my age. Can you suggest a vehicle for my money which would provide a decent return and still allow me to draw money monthly once I retire? – G.S.
Gordon awers: It sounds to me like one of the no-load monthly income funds offered by the major banks is exactly what you’re looking for. The portfolios vary somewhat depending on which bank fund you buy but all the funds are basically some combination of bonds, income trusts, preferred shares, and high-yielding common stocks.
At present, the BMO and CIBC Monthly Income Funds are each paying 6c a unit (72c a year). The RBC Monthly Income Fund pays 4.25c a unit (51c a year) while TD Monthly Income recently increased its monthly payout to 3.5c a unit (42c a year). Other companies offering monthly income funds include Altamira, Ethical, HSBC, and National Bank.
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