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These 2 Technology Stocks Will Make the Perfect Investments for Your TFSA

Despite a little bit of turbulence in Friday’s trading session, stock markets around the world are near all-time highs, as the focus now turns to expectations for robust economic growth in 2018, spurred by a stronger U.S. economy and increased expectations for inflation.

Understanding the TFSA

While the Canadian Revenue Agency provides a tax credit for dividends, it does not do so for capital gains. As a result, the best way to minimize paying taxes on your capital gains is to “shelter” them in your Tax-Free-Savings-Account (TFSA).

No matter how much money you make from the investments inside your TFSA, you will never have to pay tax on your gains.

As of 2018, if you’ve been over the age of 18 since the TFSA was created in 2009, you’re eligible to contribute up to $57,500 to your TFSA — it is the perfect vehicle for stocks that don’t pay dividends and where the bulk of your returns are expected to come from gains on the price of your investment.

These two technology stocks fit that criteria perfectly — they don’t pay dividends, and they stand to be much bigger companies in 10 years than they are now.

Shopify Inc. (TSX:SHOP)(NYSE:SHOP)

Shopify distributes and sells its own e-commerce platform of the same name, which is designed to make it easier for small-business owners, drop-shippers, and hobbyists to sell their products online.

The online platform, which includes an API, allowing developers to create and sell their own applications in the company’s own app store, was designed by its founders after they had tried to launch their own snowboard equipment e-commerce store, but were they disappointed with the solutions that were available in the market at the time.

Shopify has been praised by CNET, an online reviewer of technology and consumer electronics, for the platform’s “clean, simple, and easy-to-use” functionality.

There’s no denying that digital commerce has arrived and is here to stay.

Shopify just so happens to be one of the pre-eminent leaders in the space with recent financial performance confirming the success the company has been enjoying –sales at Shopify were up 72% in the most recent quarter.

Tucows Inc. (TSX:TC)(NASDAQ:TCX)

If you’re thinking about opening your own e-commerce store using the Shopify platform, the first thing you’re going to have to do is set up a website and email to host your online business.

And that’s where Tucows comes in as the second-largest domain registrar worldwide.

If you aren’t sure what a domain registrar is, don’t worry; it’s not very complicated at all.

Essentially, Tucows operates the online exchange that allows website owners to register their URL, or website address, so that those surfing on the internet can easily find it.

Every website owner in the world is required to go through a domain registrar before their site goes up on the internet, so, as you can probably imagine, life is pretty good at Tucows these days.

Conclusion

E-commerce is forecast to grow by more than 20% in 2018, making it one of the fastest-growing markets that you can invest in today.

Shopify and Tucows offer a winning combination to take advantage of this emergent trend, making them the perfect investments for your TFSA.

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Fool contributor jphillips has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify and Tucows. The Motley Fool owns shares of Shopify, SHOPIFY INC, and Tucows. Shopify and Tucows are recommendations of Stock Advisor Canada.

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