Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances.
Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities.
Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. Amy’s work can be found regularly on the Financial Post and MoneyWise Canada.
When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog Finley, and travel.
3 Dividend Stocks to Double Up on Right Now - March 14, 2024
Beyond Canadian Bank Stocks: 3 Insurance Plays With Nice Dividends - March 14, 2024
1 Dividend Stock Down 22% to Buy Right Now - March 14, 2024
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The TSX today continues to show some signs of improvement, but is still down compared to all-time highs. As of writing, the TSX is down 3% in the last year. Now, this is a huge improvement after falling to 52-week lows in October 2022. However, Tax-Free Savings Account (TFSA) investors are most likely sick of seeing these losses.
So let’s fix that. Today, we’ll look at three TSX stocks TFSA investors can buy up to outperform the market. And not just in 2023, but far beyond.
CP stock
Canadian Pacific Railway (TSX:CP) looks like it hit the three-digit range and it’s now here to stay. The company was up and down for a while there as TFSA investors waited to see if its Kansas City Southern acquisition would pull through. Now, it looks like all but a certainty with CP expecting approval to come “within a matter of weeks.”
That will be huge for TFSA investors. The company is in a strong financial position, which helped lead it to the massive acquisition. And that acquisition will pay huge rewards, and already has for investors who picked up the stock. It’s now one of the rising TSX stocks, up 17.5% in the last year alone!
While it’s not the dividend payer it once was because of the acquisition, those looking for growth through returns should definitely consider the stock – especially TFSA investors looking to make back some of their losses from the last few years.
Northland Power
Another strong choice for TFSA investors among TSX stocks is Northland Power (TSX:NPI). Northland stock has a few things going for it. The company is a monthly dividend payer, with a yield at 3.52% as of writing. Further, it’s in the renewable energy sector.
This last point is important, as the company has created a massive portfolio of renewable energy assets in locations around the world. The diverse portfolio means no matter what type of renewable energy future lies ahead, Northland stock has access to it.
Yet right now, Northland stock offers incredible value. After climbing to 52-week highs in August, shares have dropped down. Except those shares have still beat out the market, back to where they were in February 2022. Trading at 12.2 times earnings, I would pick up the stock while you can, as the drop is due to short-term issues of inflation. Something every company is hampering with right now.
Restaurant Brands
Finally, if you want a crazy growth stock, then I would consider Restaurant Brands (TSX:QSR). RBI stock is a strong choice among TFSA investors who are looking for TSX stocks on the move. Shares are already up 33% in the last year alone, with an incredible amount of momentum surging it upwards.
In fact, during this year shares should continue to grow. It comes down to a recession. RBI stock may have crashed during the pandemic, but it created the opportunity to get its product to consumers any way possible. Now, those consumers are likely to continue purchasing even during a recession, given it’s a cheaper way to eat out compared to the pricier options chosen during periods of growth.
So TFSA investors should look to TSX stocks like this one, which offers protection during a recession and growth, as well as a 3.26% dividend yield as of writing.
There's no right number of stocks to hold in a TFSA, as it'll depend on your overall risk portfolio. However, it's hard to go wrong with five to 10 blue-chip stocks like TD that can generate both capital appreciation and dividend income.
U.S. stocks held in a TFSA are subject to 15% withholding tax on U.S. dividend income. Withholding tax would apply to other foreign stocks held in a TFSA, with rates starting at 15%, depending on the country. Only Canadian stocks are not subject to withholding tax on their dividends inside a TFSA.
Regardless of your strategy, you'll need a brokerage to start trading TSX stocks. Just be careful about who you choose. Beginners often make the mistake of opening an account with “just anyone,” without doing the necessary research into what that broker offers.
goeasy (TSX:GSY) is another incredible TFSA stock for a long-term hold. Like TFI, it has already delivered an incredible record of returns. Its stock is up 1,000% over the past 10 years. Add in dividends reinvested, and investors have earned a 1,300% total return (a 30% compounded annual growth rate).
The best investment for a TFSA depends on your unique circ*mstances and hinges on how soon you'll need the money and your risk tolerance. Choose stable investments like cash or GICs for the money you'll need soon. If you are investing for the long term, stocks or ETFs could help you grow your account.
Yes, you can lose money on a TFSA, but it is easy to avoid losing your money. Typically, people who lose their money on a Tax-Free Savings Account are people who are using it for more volatile investments or people who are over-contributing.
First, holding U.S. dividend-paying stocks in TFSAs will lead to a 15-per-cent withholding tax on that dividend when received (either in cash or on a dividend reinvestment plan). This applies to common or preferred shares held directly or those held within managed products such as exchange-traded funds or mutual funds.
The tax exemption provided for in the Convention between Canada and the United States for RRSPs and RRIFs is rather exceptional and not found in any other tax treaty signed by Canada. Therefore, for tax purposes, it will generally always be better to hold US investments in RRSPs rather than TFSAs.
The median prediction of 23 portfolio managers and strategists in the Feb. 9-21 poll was for the S&P/TSX Composite Index (. GSPTSE) , opens new tab to advance 2.5% to 21,750 by the end of 2024, compared with 21,000 expected in a previous poll in November.
When there are no buyers, you can't sell your shares—you'll be stuck with them until there is some buying interest from other investors. A buyer could pop in a few seconds, or it could take minutes, days, or even weeks in the case of very thinly traded stocks.
But there's one group of investors who charge in to buy when stocks are selling off: the corporate insiders. How do they do it? They have 2 key advantages over you and me that provide them the edge during uncertain times. If you follow their lead, you can have that edge too.
Regulations vary by country, but in general, when all or almost shares in a company are owned by one or only a few people, the stock is delisted. In some jurisdictions, a takeover offer must be made to purchase the few remaining shares.
For non-dividend U.S. stocks, holding them in TFSA could be a smart choice. Like Canadian stocks, you won't pay a capital gains tax on U.S. stocks when you sell them for a gain. And unlike RRSPs, you won't pay taxes when you withdraw money from your TFSA before retirement.
A good range for how many stocks to own is 15 to 20. You can keep adding to your holdings and also invest in other types of assets such as bonds, REITs, and ETFs. The key is to conduct the necessary research on each investment to make sure you know what you are buying and why.
At one extreme, if you buy or sell a stock once a month there should be no problem. At the other extreme, if you are trading almost every day and holding stocks for only a few days at a time, that will be considered carrying on business and the TFSA will be taxed. So be careful about this!
Introduction: My name is Lakeisha Bayer VM, I am a brainy, kind, enchanting, healthy, lovely, clean, witty person who loves writing and wants to share my knowledge and understanding with you.
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