Canadian DIY buyers with an additional $50,000 or so in new cash to place to work have loads of choices. And whereas the TSX Index is coming into 2026 sizzling, I wouldn’t hit the panic button over the subsequent inventory market correction. Undoubtedly, one ought to at all times be ready in any given yr, and the important thing isn’t timing when it’ll begin, however having a sport plan for the way to react as soon as shares inevitably do begin placing collectively nasty dropping streaks.
On the subject of a substantial sum (let’s say within the 5 figures), I’m an advocate of dollar-cost avereraging (or incremental shopping for by way of the course of a yr), reasonably than placing the whole lot to work at one occasion in time, particularly if the broad fairness markets are near a brand new all-time excessive and we’re contemporary off probably the greatest return years in latest reminiscence. After all, dollar-cost averaging isn’t a magic system for good returns. Actually, if shares proceed to roar greater with this sort of momentum, placing a lump sum into shares without delay would possibly outpace an incremental shopping for method.
Certainly, there are trade-offs to contemplate. For buyers who don’t have liquidity past the quantity they’re seeking to make investments, although, I’d view the dollar-cost averaging method as a approach to calm one’s nerves if the notion of a correction is excessive or if one doesn’t have liquidity to be a internet purchaser on such a dip. After all, all of it comes down to at least one’s consolation degree.
Incremental shopping for might make extra sense when coping with massive sums
For a comparatively new investor, the professionals (much less panic) of incremental shopping for, I believe, outweigh the potential negatives. That mentioned, if 2025 wasn’t a red-hot yr for the TSX Index and we’re within the midst of a bear market, maybe the lump-sum method would have confirmed higher. In any case, buyers eager on formulating a passive revenue stream might want to steadily add to their holdings over time.
In the event you’re seeking to common a 4% yield, a $50,000 portfolio would payout $2,000 earlier than taxes. After all, in case you’re in a TFSA, that’d be tax-free revenue. Both method, backing up the truck on a 4%-yielder at one occasion could also be the easiest way to lock in that yield. Nonetheless, incremental consumers keen to common up their yield might want to construct such a passive revenue stream over time.
As it’s possible you’ll know, the yield goes greater when share costs transfer decrease, so on the subject of an revenue stream, a dollar-cost averaging method might show clever, particularly if the market is pricey and a few froth wants to come back off the highest of a number of the names (most notably the large Canadian banks, which have endured yield compression prior to now yr because of massive capital features in 2025).
What about Telus’ enormous yield?
For buyers in search of greater yields, a reputation like Telus (TSX:T) might be a worthy choice, given its yield is round 9.3%. And with a dividend development pause and loads of efforts to enhance the money flows, I do discover the battered telecom to be intriguing for these risk-takers who prioritize revenue over development, even when it means tackling critical volatility.
Both method, Telus shares have been gaining in latest classes, and if the dividend does survive, nibbling on the inventory whereas the yield’s nonetheless above 9% might make sense. Given the annual revenue from $50,000, the inventory might work out to greater than $4,500 in annual revenue.
That’s an excellent deal, however buyers must be cautious about placing an excessive amount of to work at any given time, as there are dividend reduce dangers and capital draw back to be involved about. Both method, for stability, I’d be an incremental purchaser of Telus’ diversified dividend (in small doses) with yields within the 3–4% vary.
