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The 4% rule — a rule of thumb that suggests retirees should average a 4% dividend yield with their investment for retirement passive income — seems to be a tad too restrictive in the era of high interest rates. Of course, rates are bound to come down from here, perhaps in a matter of months. In any case, the Bank of Canada is in no rush, leaving rates unchanged in its latest meeting.
Undoubtedly, the TSX Index finished the day up around 0.3% anyway, indicating that investor hopes for a March rate cut were not in the cards. However, as we move into the summer months, the odds of a rate cut could increase. Undoubtedly, any such rate cuts could help various battered TSX stocks gain ground, all while their dividend yields look to compress, bit by bit, closer to historical norms.
In any case, we’ll check out one dominating TSX stock that is in a rut now but has shown signs of life…
