3 RRSP Stocks for Expedited Nest Egg Growth

Even if you have enough time for steady capital appreciation, some fast-paced growth stocks can be thoughtful additions to your RRSP.

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There are plenty of reasons to want to expedite the growth rate of your RRSP-based nest egg. You might be nearing retirement and still falling short of the amount you were hoping to have at retirement. Or you simply want to reach a milestone with your retirement funds, so you can divert more funds to other, more short-term financial needs or large-ticket purchases.

Whatever the reason, there are three stocks that may help you achieve desired results.

A powerful growth catalyst

TFI International (TSX:TFII)(NYSE:TFII) has always been a significant growth stock. It grew over 1,000% between 2009 and 2020 and at a very consistent pace. Annualized, that’s over 90% capital appreciation a year — a number many stocks take several years to achieve. But its growth in the last two years has been too explosive to be consistent.

The stock rose over 440% in less than two years, and it’s now normalizing, but at a relatively slow pace. And since it’s quite fairly valued right now is also likely to slow down the correction. The current 17.8% discount is not nearly good enough to consider buying the company now, but you should not wait for the stock to reach or below its pre-pandemic level since its organic growth might prevent that and buy whenever this dip matures.

A real estate company

A slightly more reasonably paced version of TFII’s post-pandemic growth can be seen in the Colliers International Group’s (TSX:CIGI)(NASDAQ:CIGI) growth. The stock also saw an expedited growth phase post-crash but only about twice as fast, and it’s already deep into the recovery phase, with the stock down over 19% from its recent peak.

But if we consider the long-term growth history of the company, the 10-year CAGR of 24.7% doesn’t seem too heavily skewed by the recent rapid growth. Even if we take the rapid growth out, a company growing at about 20% a year will double your capital in half a decade. That kind of growth can have powerful positive implications for your RRSP portfolio, especially if you are decades away from retirement.

A time-tested growth stock

If you are looking for a company that didn’t change its growth pattern much in the last two years and has a long-term and steady growth record, few can match Constellation Software (TSX:CSU). You would have to look past a very high price tag, but if you are amiable with a company you can’t even buy one whole share of with $2,000, you can lock in incredible growth in your portfolio and expedite your nest egg’s growth considerably.

The company comes with a 10-year CAGR of 38.8%, putting it among the most potent growth stocks in the country and one of the few that offer consistency with such growth. Naturally, the stock is relatively overvalued, but that’s a small price to pay for a company that could potentially double your capital every three years.

Foolish takeaway

It’s easy to buy powerful growers in a bull market, but not all of those stocks may offer long-term growth, irrespective of the market dynamics. When you are choosing stocks for your long-term retirement portfolio, the long-term nature of their capital-appreciation potential is one trait you cannot and should not compromise on.

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 Constellation Software.

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