If you’re hoping to achieve financial independence, it’s imperative that you make use of tax-advantaged accounts. These are accounts that allow investors to make tax-free or tax-deferred investments. Obviously, a tax-free account is more appealing, since you don’t have to pay anything after making a return. However, by investing in a tax-deferred account, investors can pay taxes on their investments when they’re at a lower tax bracket (ideally during retirement).
In this article, I’ll discuss three stocks that investors should hold in a Tax-Free Savings Account (TFSA). Although it’s labelled a savings account, investors can invest in stocks in a TFSA. In fact, I’d argue that investors should max out their TFSA before opening a taxable account. Here are three stocks investors should hold for long-term growth.
Take advantage of secular trends
If you’re looking for growth, then it’s imperative that you take advantage of secular trends. For example, investors that bought Apple stock at the start of the smartphone trend have seen massive returns since then. One massive trend that seems to be taking over the world today is the shift towards ecommerce. Shopify (TSX:SHOP)(NYSE:SHOP) has grown to become a massive enabler of this industry. It provides merchants of all sizes with a platform and all the tools necessary to operate online stores.
Historically, Amazon has been the largest player in this space. Through its massive marketplace, merchants have been able to reach the masses and sell high quantities of product. However, Shopify seems to have surpassed Amazon in terms of customer traffic. This happened for the first time in Q2 2021 when Shopify recorded an average of 1.16 billion unique monthly users. That compared to 1.10 billion unique monthly users on Amazon.
As e-commerce continues to increase in penetration, expect more customers to find their way to Shopify stores. Today, e-commerce only accounts for about 11% of all Canadian retail sales. If the industry continues to grow, Shopify could be much larger in a few years’ time.
Invest in companies that are industry leaders
As mentioned with Shopify, it’s a clear leader within the e-commerce industry. However, what’s better than a company that leads an industry? What about a company that leads two industries? Telus (TSX:T)(NYSE:TU) is a powerhouse company that not enough people talk about. It’s well known for its telecom business. Alongside BCE, Telus operates the largest telecom network in Canada. Its coverage area provides access to 99% of Canada’s population.
However, what I find more interesting about Telus is its healthcare business. Telus Health can be viewed as two distinct segments. The first portion of Telus Health contains the services Telus provides to healthcare professionals. These include a massive EMR network, billing and administrative services, and more. The second portion of Telus Health is its personal care segment. MyCare is the company’s personal care app, which allows patients to seek doctors, dieticians, and mental health counsellors from their phone.
The telehealth industry is still in its infancy, but Telus has already managed to claim a share of the market. As the company continues to succeed in its telecom business, it can shift some of that capital towards growing its telehealth business. This is a two-headed beast that investors should be aware of.
