TFSA Investors: 2 Top TSX Stocks to Buy in March

TFSA investors should have these two TSX stocks at the top of their watch lists in March.

| More on:
analyze data

Image source: Getty Images

With the 2021 RRSP contribution deadline now behind us, it’s time to think about maxing out your Tax-Free Savings Account (TFSA). 

The TFSA annual contribution limit is $6,000 in 2022 but the total limit is $81,500, dating back to 2009. Unused contributions can be carried over from year to year, so don’t worry if you’re behind on your savings.

Canadians have a few options when it comes to what can be held within a TFSA. To determine which funds are right for you, you’ll need to have an idea of your time horizon. 

If you’re saving towards a short-term goal, holding a low-volatility fund, such as a GIC, would be a wise idea. But if you’ve got a longer time horizon and can withstand some volatility, investing in stocks is your golden ticket to building wealth.

Tax-free compounded growth 

As the name suggests, one of the main selling points of a TFSA are the tax-free withdrawals. At any point in time, you can make a withdrawal from your account completely free of tax. The contribution room is also regained 12 months following the withdrawal.

Tax-free withdrawals are great, but it’s not the main reason why I’m a huge fan of the TFSA. Capital gains and dividends earned within the account are also not taxed, meaning that your investments can compound year after year tax free.

The total TFSA contribution limit may only be $81,500 today. But if you’ve got decades of time until you plan on withdrawing your funds, the magic of compound interest could turn that $81,500 into a sizable nest egg.

To get you on your way to benefitting from tax-free compounded gains, here are two top TSX stocks that have loads of long-term growth potential. 

TSX stock #1: Docebo

The tech sector has been going through a rough selloff over the past several months. There are plenty of market-leading tech companies across the TSX trading well below 52-week highs right now.

Down nearly 50% over the past six months, Docebo (TSX:DCBO)(NASDAQ:DCBO) is at the top of my own watch list right now.

The tech company has only been trading on the TSX since late 2019, but long-term investors have lots to be bullish about. Shares are already up more than 300% since the tech stock went public. 

From a valuation perspective, Docebo is not exactly a cheap stock, even with a 50% pullback. If you’re looking for TSX stocks with market-beating growth potential, though, expect to pay a premium.

TSX stock #2: WELL Health Technologies

Speaking of discounted growth stocks, WELL Health Technologies (TSX:WELL) has dropped more than 40% over the past year. In comparison, the S&P/TSX Composite Index is up 15%.

Early on in the pandemic, demand for WELL Health’s telehealth services surged, which resulted in huge growth for the TSX stock. The company ended 2020 with a gain of more than 400%. 

In the short term, investors may not be out of the woods just yet. A lot of growth was pulled forward in 2020, which is why it’s not all that surprising to the TSX stock correct itself over the past year. It’s anybody’s guess as to where WELL Health will be trading at the end of the year.

If you’re investing for the long term, though, telemedicine is one industry that I’d strongly encourage gaining exposure to. And with WELL Health trading below $5 a share today, this is a fantastic time to start a long-term position in the telemedicine company.

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 Nicholas Dobroruka has no position in any of the stocks mentioned. The Motley Fool recommends Docebo Inc.

More on Tech Stocks

shopping online, e-commerce
Tech Stocks

Young Investors: Shopify (TSX:SHOP) Stock May Finally Be Worth Buying

Shopify (TSX:SHOP)(NYSE:SHOP) stock is attempting to stage a bottom, but should investors be buyers amid the market chaos?

Read more »

STACKED COINS DEPICTING MONEY GROWTH
Tech Stocks

How to Easily Turn a $25,000 RRSP Into $250,000

You can hold quality growth stocks such as Shopify in your RRSP and benefit from market-beating gains in the long…

Read more »

Male IT Specialist Holds Laptop and Discusses Work with Female Server Technician. They're Standing in Data Center, Rack Server Cabinet with Cloud Server Icon and Visualization
Tech Stocks

Kinaxis vs. Descartes: Which Is the Better Tech Stock to Buy?

Top tech stocks like Kinaxis Inc. (TSX:KXS) and Descartes Systems Group Inc. (TSX:DSG)(NASDAQ:DSGX) are worth your attention right now.

Read more »

tech and analysis
Tech Stocks

2 Top Tech Stocks Investors Should Consider Buying Right Now

Tech stocks such as Sierra Wireless and Open Text are well positioned to deliver outsized gains to investors in 2022…

Read more »

cup of cappuccino with a sad face
Tech Stocks

Shopify (TSX:SHOP) Stock Has Been a Bloodbath

The share price of the TSX’s tech phenomenon could still plunge if the bloodbath continues due to the slowdown of…

Read more »

sad concerned deep in thought
Tech Stocks

Tech Stocks Crumble: Is it Time to Buy?

Shopify is coming down from its pandemic highs as its business falters, but BlackBerry's business is just gaining steam.

Read more »

young woman celebrating a victory while working with mobile phone in the office
Tech Stocks

This 1 High-Growth Stock Just Got Irresistible

Despite a challenging macro environment, Lightspeed continues to post strong growth, which could help this high-growth stock stage a sharp…

Read more »

exchange-traded funds
Tech Stocks

Buy the Dip: 3 ETFs That Have Taken a Beating in 2022

Three prominent TSX ETFs trades at bargain prices in 2022 because of their significant exposure to the slumping technology sector.

Read more »