2 stocks every Canadian retiree should seriously avoid

I spend most of my time discussing the best Canadian stocks that I think investors should own right now. Whether these are growth stocks, dividend stocks, or a range of other defensive companies in other sectors, I see plenty of incredible bullish cases to be made around some leading TSX names with great reputations.

That said, there are still a few TSX-listed stocks that I think are worth avoiding right now. For those approaching or nearing retirement, here are two specific stocks that I think are worth avoiding right now.

Bit farms

The cryptocurrency revolution has not really become what many investors hoped for. That’s what Bit farms’ (TSX:BITF) stock chart highlights below.

Now the company has transitioned from a full-fledged crypto miner to a cloud/data center computing story. By leasing its GPU processing power to such companies, he hoped that Bitfarms would see its operating metrics improve.

Unfortunately that has not been the case. Bitfarms’ peers have all made the same move, and the commoditization of excess computing capacity appears to be driving down margins. With potential restrictions on the horizon around AI spending, and what that could mean for backend companies like Bitfarms, this is a more speculative name that I think investors should seriously consider moving away from.

That’s simply because, in my opinion, there are so many better growth opportunities in the market right now to consider.

Allied Properties REIT

Overall, I’m optimistic about the Real Estate Investment Trust (REIT) landscape over the long term, but Allied Properties REIT (TSX:AP.UN) is one such REIT that I think investors should avoid.

In short, there are a plethora of Canadian REITs to choose from with better balance sheets, net income growth and payout ratios. I think the company’s near double-digit dividend yield is worth reminiscing about. Indeed, the market seems to imply that at some point Allied will no longer be able to pay out its 7.8% yield. I’m not 100% sure either way, but a dividend cut or suspension could be the death knell for most companies in this sector.

In addition, the company’s portfolio has deteriorated, with weak fundamentals in office space prompting investors to look at other sub-segments of the real estate market. Until these dynamics change, this is a stock I will remain wary of, given Allied’s payout ratio and the seemingly unsustainable yield this stock offers.