As economic uncertainties continue to loom, the stock market remains unsettled. While some stocks appear risky, there are stocks available that are perfect for long-term TFSA investing.
The power of the TFSA when it comes to investing for the long run cannot be overstated. When compared to a traditional account, the tax savings compounded over time can make a massive difference.
One of the most popular uses for the TFSA is to buy and hold blue-chip TSX stocks. Over time, investors collect the dividends and make gains on the unit price — all free of taxes.
Today, we’ll look at three stocks that can put $6,000 to work properly over the long run.
Like with most other TSX stocks, this TFSA investing heavyweight has been hit hard by the pandemic. Quarterly revenue growth is down over 30% year over year, and loan-loss provisions rose fairly drastically in the last earnings report.
However, this stock has one of the best reputations when it comes to maintaining its dividend — even through financial crises. While the stock might have a bumpy ride in store for the near term, it still has a healthy and resilient balance sheet.
As of this writing, RY is offering a yield of 4.69%, which exceeds the five-year average yield. As such, investors can now lock in an outsized yield with a TSX stalwart.
While this TFSA investing stock has long been focused on wireless, wireline, TV, internet, and entertainment services, Telus has also branched out with Telus Health. This segment has quickly become a global leader when it comes to digital healthcare services and solutions.
In times like these, that seems like just the right kind of sector to be in. Telus has also been focused on improving the reach of its networks as Canadian schools have been transitioning towards online learning.
Canadian 5G access is also on the horizon for Telus, and it will look to continue to continue providing top-tier infrastructure and service to its customers as demand for data continues to rise.
As of this writing, this TFSA investing superstar is trading at $22.73 and yielding 5.13%. The company has also maintained it hopes to continue growing its dividend for the foreseeable future.
Defensive TFSA investing
For investors looking for a more defensive TFSA investing stock, Fortis is a great pick. Due to the nature of its contract-based distribution channels, it has very reliable revenue and predictable earnings.
Its rock-solid stability is highlighted by its beta of 0.06. Fortis has long been a top TSX stock when it comes to making reliable dividend payments.
As of this writing, Fortis is trading at $52.03 and yielding 3.67%. So, while Fortis offers investors protection against the swings of the market, this is paid for in the form of a smaller yield.
Even still, Fortis’s stability makes it a great anchor for any TFSA investing plan.
TFSA investing strategy
If you’re looking to invest $6,000 in a TFSA now, these three stocks can all be valuable parts of a portfolio.
Over time, the high yields and stability they offer coupled with the tax savings achieved in a TFSA will make for some jaw-dropping total returns.
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 Jared Seguin has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC.