Upset Over Losing Money? Buy These 2 Safe Stocks for Your TFSA

Losing money is upsetting to people with long-term financial goals. In the 2020 pandemic, the BCE stock and Fortis stock are the best investment choices for TFSA users hoping to earn income, despite the harsh market environment.

| More on:
Man with no money. Businessman holding empty wallet

Image source: Getty Images

Investors’ appetites have been crushed by the massive selloff in the Toronto Stock Exchange (TSX). Canada’s main stock market index is sinking again — particularly stocks in the energy sector. There seems to be no formula to arrest collapsing oil prices.

The federal government has been combating the market slide with several fiscal measures. Income investors are desperately scouting for safe equities to park their money.

People with holdings in BCE (TSX:BCE)(NYSE:BCE) and Fortis (TSX:FTS)(NYSE:FTS) are not feeling the pinch. This pair of top-notch stocks is among the safest for your Tax-Free Savings Account (TFSA). Both are holding up well in the pandemic. Losses are less than 5%, while dividends are safe.

Critical services in the pandemic

Telecommunications giant BCE continues to dominate the advanced broadband wireless, TV, internet, and business communications services in Canada. The shares of this $51.2 billion company are down 4.2% year to date, which is minimal compared with the double-digit losses of other blue-chip stocks.

Bell Wireless, Bell Wireline, and Bell Media are the three primary subsidiaries that comprise this largest telco in Canada. BCE has the reach and resources to provide critical communications services and business connections to over 22 billion clients.

Because the company churns out consistent profits every quarter, you can take a defensive stance during the pandemic. Likewise, the 5.81% dividend is super attractive. In your TFSA, $50,000 worth of BCE shares will deliver $2,905 in tax-free passive income.

The company donated 1.5 million protective masks to the federal, provincial, and territorial governments for use by the thousands of healthcare and other frontline public workers throughout Canada. BCE knows its social responsibility in the wake of the coronavirus outbreak.

Bond-like stock

As usual, top utility stocks like Fortis are displaying resiliency during this worst-ever market decline. Three factors make this $24.5 billion electric and gas company one of your best options in a bear market or recession. There is growing income, visible long-term growth, and a diversified, regulated-utility asset base.

I need to make mention too of Fortis’s 45-year record of dividend increases. Many companies don’t have the characteristics to achieve such a feat. Its operations are regulated or under long-term contracts, and therefore, earnings are very stable. With almost 100% of revenue coming from solid sources, the business endures.

The hit of the coronavirus outbreak on the stock is negligible. Fortis’s year-to-date loss is only 1.27% versus the TSX’s -18.30% (as of April 21, 2020). At present, the dividend yield is 3.59%.

Your $6,000 annual TFSA contribution limit in 2020 can easily produce $215.40 in tax-free income. Fortis is often likened to a bond because of its inherent safety features.

Anchors in a crisis

The 2020 market crash can torpedo not only long-term financial goals but retirement plans as well. You must exercise caution when making investment decisions. In times of heightened market volatility and uncertainty, BCE and Fortis are the anchors of risk-averse TFSA users.

This pair of traditional safe-haven assets should quell your fears during extraordinary market crashes. You’ll continue to derive profits and not lose money.

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 Christopher Liew has no position in any of the stocks mentioned.

More on Dividend Stocks

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »