One of the first rules of investing is to start as early as you can. When you are in your 20s and 30s, trying to build a life and enjoy it at the same time while saving/investing for retirement may seem like an unnecessary burden, but that’s exactly the right time to start working on your nest egg. Not only will you have more time for growth, but you will also have time to rectify most (if not all) of your investment mistakes and reach retirement in great financial health.
However, not many people have this luxury, and when you are late to your nest egg building, you have to make up for lost time with speed and more capital. And though that doesn’t mean you should invest in the fastest growing but also the riskiest assets, you can invest a heavy penny in some great, time-tested growth stocks.
A trucking giant
TFI International (TSX: TFII)(NYSE: TFII) has grown to become one of the largest trucking/transport companies in North America. The stock, which already had a decent long-term growth potential before the pandemic, went through the roof, riding the post-pandemic recovery wave (fueled by the company’s association with the e-commerce market).
And though the 431% growth that stock has made so far from its market crash valuation would have been great if you had bought the company when it was in a rut, it has made the stock too “frothy” to buy right now. But once it has gone through its correction phase, which has already started, you should consider adding this promising company to your RRSP.
Even if its growth potential falls a little from what its 10-year CAGR of 24.8% is promising, it can still stir things up in your portfolio.
A media and telecom company
One would think that thanks to the internet and streaming services, the days of TV and conventional media are long gone, but it’s a little more complicated than that. Media companies rooted in the community that can evolve with time might not just stay afloat; they may soar. Quebecor (TSX: QBR.B) is one such contender. The company has been growing at an incredibly steady pace since the fall of 2009.
The company’s last decade’s growth is evident from its 10-year CAGR of 14.3%. It’s a sustainable growth pace, especially the current, modestly valued, and discounted price (15.8% since the yearly peak). The company also offers healthy dividends, and the current yield is quite decent (3.6%). You can opt for dividend reinvesting to grow your stake till you retire.
An alternative financial company
In a country like Canada, where a few banking giants dominate the financial market, it’s relatively difficult for small companies to compete in similar, overlapping domains. However, goeasy (TSX: GSY) pulled it off, in a way. It focused on an underserved denomination of the market: people with relatively low or poor credit that couldn’t get the big banks to help them.
And by catering to that market, the company did quite well for itself, and its stock followed. Currently, the stock is dipping or balancing out against the monstrous growth phase post-pandemic, which pushed the value of the company well over 600% in less than two years. It’s also a very generous aristocrat, but the yield is often low thanks to its powerful capital-appreciation potential.
Foolish takeaway
Choosing growth stocks is easy. However, choosing the right growth stocks that you can hold into your RRSP for decades, where they reliably contribute towards the growth of your nest egg, can be a bit challenging. You can’t just take the company’s past performance into account but also look at the business model and what its future success potential is.
