Manifest the Full Power of Your TFSA With 3 Stocks

The TFSA can be a powerful tool if used the right way, which involves using it to grow the right investment assets.

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The RRSP and TFSA are not really different when it comes to flexibility and frequency of investments, so you can just as easily create and close positions in volatile assets in your RRSP as you can in your TFSA. But one reason why many investors prefer keeping growth stocks in their TFSA is that it’s wealth that you have access to at any given time.

So, if you want to use your TFSA to not just save for retirement but help you with your short-term financial/wealth-building goals as well, which is akin to unleashing its full potential, there are three stocks that should be on your radar.

A growth-oriented REIT

Granite Real Estate (TSX:GRT.UN) has so many good things going right for it that it has almost become a no-brainer investment. As a commercial REIT with a globally diversified portfolio of light industrial properties (warehouse and logistics), it’s perfectly positioned to benefit from the e-commerce boom. It’s a Dividend Aristocrat that, despite exhibiting powerful growth in the last five years, is still offering a modestly decent 2.9% yield.

The 10-year CAGR of the REIT of 17.9% is quite sustainable, and its growth history has been phenomenal, even before it got the e-commerce boom boosted the stock. On top of that, the stock is currently undervalued. However, even though Granite is a great stock to hold in your TFSA, now might not be the best time. Wait for the stock to simmer down a bit and lock in a better yield to get the best of both growth and dividends.

A solid waste collection company

Essential services like waste collection are an evergreen business, making companies like Waste Connection (TSX:WCN)(NYSE:WCN) a good long-term holding. But capital preservation is not the only thing you want from a TFSA stock, and while Waste Connection offers both dividends and growth, it’s the company’s potential with the latter that attracts most investors.

The stock grew its investors’ capital by 146% in the last five years, and even more attractive than the pace of growth is the consistency. It also displayed amazing resilience against the market crash and reclaimed its pre-pandemic valuation in July 2020 and has been growing at a steady pace since. That’s the kind of stock you may not want to wait to buy and leash in your TFSA as soon as possible.

A real estate company

Another real estate business that you might consider adding to your TFSA is Colliers International Group (TSX:CIGI)(NASDAQ:CIGI). The company has been around since 1972 and has an extensive global presence (65 countries). The company has $46 billion worth of assets under management. Its track record for growth is impeccable.

The company offers a 20-year CAGR of over 20%, and if it continues to grow at its current pace, it can easily double its capital every three or four years. Thanks to its international presence, the company is not exposed enough to the local real estate market to go down with the “housing market” ship if it sinks.

Foolish takeaway

The three growth stocks can help you grow your TFSA funds at an incredible pace. You might easily be able to double your TFSA capital in about five years, and that’s if the three stocks don’t grow at their full potential (or not all three investments perform well). You can use the doubled capital to meet your short-term financial goals, or you can keep growing it for retirement.  

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends COLLIERS INTERNATIONAL GROUP INC and GRANITE REAL ESTATE INVESTMENT TRUST.

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