TFSA Investors: Retire Early With This Growth Stock

You will thank yourself later for building your position in this growth stock during this bear market!

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Early retirement handwritten in a note

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TFSA investors who have room in their accounts should be eager to shop for stocks right now. Thanks to the stock market crash, you can select stocks that will allow you to push your retirement date potentially years earlier!

That’s because the investments in your TFSA account will compound tax free. Investing in top-notch, high-growth stocks inside your TFSA will, therefore, allow you to retire early.

Because all withdrawals from TFSAs are tax free, when you retire, you’re free to withdraw your TFSA funds without worrying about any tax consequences or OAS clawback.

Here are a couple of growth stocks you’ll want to explore in this bear market.

Brookfield Asset Management: Quick business overview

Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) stock is a leading global alternative asset manager with roughly US$540 billion of assets under management across real estate, infrastructure, renewable power, private equity, and credit.

There’s a high demand for what BAM offers

Because BAM owns the assets and has the expertise to optimize the operations, investors can trust that their money is in excellent hands.

The evidence is there.

The company is always able to attract large amounts of funds for investment. For example, in February, it closed its latest flagship global infrastructure fund with total equity commitments of US$20 billion, while it aimed to only raise US$17 billion.

Notably, though, BAM also committed US$5 billion to the fund, as it invests alongside its shareholders as an owner and manager.

The investments come from 170 institutional investors from across the globe, including public and private pension plans, sovereign wealth funds, insurance companies, financial institutions, endowments and foundations, family offices, and private wealth investors.

And that’s just one of the funds. Over the last two years or so, BAM raised more than US$50 billion across its investing strategies.

BAM has generated double-digit returns in the long run. That’s why global institutional investors are so eager to invest in BAM’s funds whenever they’re offered.

More greatness from investing in BAM

As the manager, BAM earns management fees and performance fees. It has US$290 billion of assets under management that it earns fees from.

Brookfield Asset Management had accumulated net unrealized carried interest of almost US$2.4 billion at 2019 year end. This is massive!

Carried interest is a fixed percentage of investment gains generated within private funds provided that the investors receive a predetermined minimum return. And BAM has billions of dollars of that that it hasn’t realized yet.

Additionally, its carried interest will only keep growing. For instance, since 2015, it has risen its net unrealized carried interest at more than 50% per year on average!

The Foolish bottom line

There’s no doubt that BAM stock will grow. After TFSA investors do their research on the wonderful business, they’ll probably put it in the top five stocks to buy on their growth stock lists!

Buying the stock in today’s bear market will lead to extraordinary long-term returns. However, the stock is going to be volatile in today’s market. So, consider averaging into the stock over time, as you’ll probably get a lower average cost basis.

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 Kay Ng owns shares of BROOKFIELD ASSET MANAGEMENT INC. CL.A LV. The Motley Fool owns shares of and recommends Brookfield Asset Management. The Motley Fool recommends BROOKFIELD ASSET MANAGEMENT INC. CL.A LV.

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