The TFSA is a powerful wealth-snowballing vehicle, and if you’re a young or experienced investor with an appetite for aggressive growth and higher risks, you could snowball your TFSA at a quicker rate than many conservative investors who have opted for safer plays, like defensive dividend stocks.
While it’s true you can’t use TFSA losses to offset gains in a non-registered investment account, it’s also noteworthy that massive market-beating gains within a TFSA are untouchable by the taxman! (Unless you’re one of the select few TFSA millionaires who’ve made huge dough since the TFSA’s inception.)
In addition, if you lock in a loss in your TFSA, you won’t be able to make up for it until a new year grants you the opportunity to contribute another $5,500. Thus, many investors err on the side of caution when it comes to investments within their TFSAs. This is a fine strategy if it’s suitable for one’s unique risk tolerance; however, it’s not an ideal strategy for everybody, especially young investors who have time on their side and want to make the most of it.
Without further ado, here are three small-cap growth stocks for aggressive investors who want to grow their TFSAs at the quickest rate possible:
StorageVault Canada Inc. (TSXV:SVI)
Fellow Fool contributor Will Ashworth called StorageVault Canada the best stock to own on the TSXV, and I couldn’t agree more. While you may think the TSXV is full of uninvestible penny stocks of venture miners, overnight marijuana companies, or crypto firms, the fact remains that StorageVault is a legitimate earnings-growth king that really stands out from the crowd.
There are many long-term tailwinds that will drive demand for self-storage units over the next decade. The Canadian real-estate-for-your-stuff business is red hot and is on the verge of massive consolidation as demand continues to surge.
StorageVault is a name that I believe is worthy of a spot on the TSX. Over the next few years, look for the name to graduate and receive more attention and coverage from analysts as the growth story becomes too great to ignore.
Park Lawn Corp. (TSX:PLC)
I’m going to risk sounding morbid with this recommendation, but I think Park Lawn Corp. is probably the best defensive stock that you’ve never heard of. The company is the leading provider of goods and services associated with the death-care industry.
Deaths happen every day, and that’s a consistent stream of revenue for Park Lawn, which is able to charge its clients a hefty premium for caskets and other high-margin tangible items in addition to its services, which have the utmost pricing power.
As such, Park Lawn, like StorageVault, is in an easy-to-understand industry that’s experiencing next-level growth. Park Lawn has grown its top line by double digits on a year-over-year basis, and as long as deaths happen, Park Lawn will be able to do its business and reward shareholders profoundly.
Cargojet Inc. (TSX:CJT)
This name has been a huge winner over the past five years, clocking in a 523% return over the time span. Cargojet is an airline that’s in charge of delivering time-sensitive packages to your door. With the continued growth of e-commerce and expedited shipments across the country, Cargojet has continued to take off to new highs.
Although it may seem like anybody can provide such urgent logistics services, a startup would be faced with a massive barrier to entry in the form of the costs associated to form a competitive fleet of high-payout aircraft. In addition, expertise is needed, as time is of the essence in Cargojet’s niche business.
If you’re a bull on the continued rise of Canadian e-commerce, I’d buy shares here in spite of the rich ~33 trailing P/E multiple. With Cargojet, you’ll get next-level growth, and as the market cap moves higher, I suspect analyst coverage will begin to shed light on this wonderful company, which I think’s a hidden gem.
Stay hungry. Stay Foolish.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Joey Frenette has no position in any of the stocks mentioned.