Millennial investors can afford to take on riskier securities with their investment portfolios. They have more time to get back up if they ever get knocked down. But that doesn’t mean it’s a good idea to chase returns and run the risk of getting knocked down continuously.
Like in boxing, you should protect yourself at all times and try to minimize your chances of getting hit. That means having the right defences in place (keep your hands up!) and doing your best to avoid eating a power punch.
In the world of investing, you should take risks as long as the odds are on your side, and the risk of irrecoverable losses is minimized.
Millennial investors: Balancing the risk and reward
Though younger investors should pursue growth plays, there is no shame in investing in the boring, proven dividend stocks that have been commonplace in many Baby Boomer portfolios. When the stock market corrects, it’s these such plays that can have your back.
As we learned through 2022, it can pay to have a solid foundation of proven defensive plays for your portfolio. That way, your portfolio won’t be in a world of pain if one risky holding folds up like a lawn chair, plunging more than 75% of its value from peak to trough.
Now that the bull market is alive and well, many may be inclined to overextend themselves on the front of risky assets. It’s always important to know your own risk tolerance, so you can stay within it and avoid those devastating losses that can set investors back by months or even years.
Without further ado, consider Telus (TSX:T), one solid telecom stock that I’d not be afraid to buy as a millennial seeking to play a bit more defence. Indeed, zigging when others zag is not easy. You’ll look foolish (that’s a lower-case f) at times until the tides turn and suddenly you look like a genius.
Telus stock: It’s a great stock for Millennials, too!
Telus stock is a favourite among older income investors, thanks to its reliable dividend payout. At writing, shares yield 5.77%. That’s on the high side for the $36.9 billion wireless giant.
Telus stock is down 26% from its 2022 high of around $35 per share and at a fresh 52-week low at around $25 and change. I think the dip is more than buyable if you’re looking to take some risk off the table while getting paid a nice dividend to do so.
Like it or not, artificial intelligence isn’t the only tech trend that could change the world. 5G wireless is still a transformative technology. And though 5G has lost its hype among market chasers, I think it holds enough potential to help propel investors to decent results over time.
With a recession potentially on the horizon, investors would be wise to buy a small chunk of shares now, and perhaps a larger chunk on a continued pullback. Undoubtedly, if Telus stock doesn’t fall much further from here, you’ll miss your shot to buy more. Regardless, you’ll still “win” from being a small buyer in the first place.
The bottom line on Telus shares
Personally, I think Telus stock could retreat closer to $20 per share. If it does, the yield may swell well above the 6% mark, making shares a terrific buy, regardless of your age.
