Canadian DIY traders 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 scorching, I wouldn’t hit the panic button over the following inventory market correction. Undoubtedly, one ought to all the time be ready in any given 12 months, and the important thing isn’t timing when it’ll begin, however having a sport plan for learn how to react as soon as shares inevitably do begin placing collectively nasty dropping streaks.
In relation to a substantial sum (let’s say within the 5 figures), I’m an advocate of dollar-cost avereraging (or incremental shopping for via the course of a 12 months), relatively than placing every part to work at one occasion in time, particularly if the broad fairness markets are near a brand new all-time excessive and we’re recent off among the best return years in latest reminiscence. In fact, dollar-cost averaging isn’t a magic system for good returns. In truth, if shares proceed to roar larger with this sort of momentum, placing a lump sum into shares directly may outpace an incremental shopping for strategy.
Certainly, there are trade-offs to think about. For traders who don’t have liquidity past the quantity they’re seeking to make investments, although, I’d view the dollar-cost averaging strategy as a method 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. In fact, all of it comes down to at least one’s consolation degree.
Incremental shopping for may make extra sense when coping with massive sums
For a comparatively new investor, the professionals (much less panic) of incremental shopping for, I feel, outweigh the potential negatives. That stated, if 2025 wasn’t a red-hot 12 months for the TSX Index and we’re within the midst of a bear market, maybe the lump-sum strategy would have confirmed higher. In any case, traders eager on formulating a passive earnings stream could 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. In fact, if you happen to’re in a TFSA, that’d be tax-free earnings. Both method, backing up the truck on a 4%-yielder at one occasion could also be one of the best ways to lock in that yield. Nevertheless, incremental patrons prepared to common up their yield could want to construct such a passive earnings stream over time.
As chances are you’ll know, the yield goes larger when share costs transfer decrease, so in terms of an earnings stream, a dollar-cost averaging strategy may show sensible, particularly if the market is pricey and a few froth wants to return off the highest of among the names (most notably the massive Canadian banks, which have endured yield compression up to now 12 months on account of massive capital positive factors in 2025).
What about Telus’ big yield?
For traders in search of larger yields, a reputation like Telus (TSX:T) might be a worthy possibility, given its yield is round 9.3%. And with a dividend progress 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 earnings over progress, even when it means tackling critical volatility.
Both method, Telus shares have been gaining in latest periods, and if the dividend does survive, nibbling on the inventory whereas the yield’s nonetheless above 9% may make sense. Given the annual earnings from $50,000, the inventory may work out to greater than $4,500 in annual earnings.
That’s an important deal, however traders ought to be cautious about placing an excessive amount of to work at any given time, as there are dividend minimize 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.
