TFSA Investors: Why You Should Invest Your Room ASAP With These 3 Stocks

Choosing the right TFSA stocks for your portfolio might take some time. But with the right choices, you can stick with them for decades.

| More on:
Gold bullion on a chart

Image source: Getty Images.

It’s not smart to put off important decisions and tasks until the last minute. Avoiding procrastinating is just as important for investing as it is for other endeavours in life.

If you wait too long for a compelling stock to drop down to the price/value you consider just right, you may lose a lot of precious time and growth opportunities associated with it. It’s essential to time the market, but you should also learn the importance of timing.

On that note, if you still need to utilize your TFSA contribution room (this year’s or carryover from the past), there are three stocks you may consider for the job.

An asset management company

Brookfield Asset Management (TSX:BAM.A) is one of the largest asset-management companies in Canada and has assets in five major categories in over 30 countries in the world. The total assets under ,anagement (AUM) are worth over $750 billion.

The asset classes it invests in include critical infrastructure, renewables, and real estate, in which it’s expected to make significant additions leveraging the distressed Chinese market.

The company is a good investment for more than its stable business model and extensive reach. BAM.A stock has rewarded its investors with both dividends and growth for a long time and has proven its mettle in distressed markets as well, assuming its investors stuck around for long enough.

An example would be the great recession, when the stock fell over 54% but got back on track, though it took around three years.

A bank

National Bank of Canada (TSX:NA), the smallest of the largest Canadian banks, has a solid regional presence, though it lags behind the others when it comes to a presence in the international market. However, it’s one of the top choices among the big six bank stocks if you consider its collective (dividend and capital appreciation) return potential, at least in the last decade.

NA stock returned over 270% to its investors in the last 10 years and is currently offering a modestly high yield of 4.1%, though you can lock in a significantly better number by buying it in a bear market.

Its growth, apart from being better than most in the banking sector in Canada, has also been relatively steady. Though the upward progress hit a bump due to the pandemic, it may revert to its former bullish momentum when the market becomes healthy.

A gold stock

Few gold stocks offer decent long-term growth potential. They may rise when the market is weak, and there is a high demand for gold but then get in a rut when the market is strong again. However, Franco Nevada (TSX:FNV) has been a decent growth stock in the last 15 years.

Since 2007, the stock has risen roughly 1,200%. And even though the road up has yet to be steady, if it performs even half as well in the future (40% a year growth equivalent, instead of 80%), you may see your capital double within three years.

It’s also a well-established dividend aristocrat that has grown its payouts for over 14 consecutive years.

Foolish takeaway

None of the three can currently be classified as “undervalued stocks.” But their long-term growth potential is decent enough that if you hold them for a long time in your TFSA, you may experience decent growth, even if you can’t snatch up a bargain. All three are dividend payers, so if you are buying them purely for growth, you may consider opting for the DRIP reinvestment option to enhance your long-term return potential.

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 Brookfield Asset Management. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Dividend Stocks

10 Years From Now, You’ll Be Glad You Bought These Magnificent TSX Dividend Stocks

The TSX is lucrative to buy these magnificent dividend stocks in bulk and be proud of this decision 10 years…

Read more »

calculate and analyze stock
Dividend Stocks

4 Fabulous Dividend Stocks to Buy in July

Are you looking for long-term income? These four dividend stocks should not only provide you with value in July but…

Read more »

financial freedom sign
Dividend Stocks

5 Steps to Financial Freedom for Canadian Millennials

Follow these steps and nothing can stop Canadian millennials from achieving their early retirement dreams.

Read more »

Investor wonders if it's safe to buy stocks now
Dividend Stocks

We’re Only Getting Older: A Top TSX Stock That Benefits From an Aging Population

For a bet on the aging population, consider this small-cap stock with growth potential.

Read more »

Growing plant shoots on coins
Dividend Stocks

Yield Today, Growth Tomorrow: 3 Stocks to Keep Building Your Wealth

For investors seeking yield today and growth tomorrow, these top Canadian dividend stocks are certainly worth considering right now.

Read more »

Payday ringed on a calendar
Dividend Stocks

This 10.72% Dividend Stock Pays Cash Every Month

This dividend stock remains a consistent, defensive dividend producer that will give up over 10% in income each and every…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

TFSA Investors: 2 Standout Domestic Stocks With 7% Yields

These top dividend-growth stocks look oversold.

Read more »

Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Despite their recent declines, the long-term growth outlook of these two top dividend stocks remains strong, which could help their…

Read more »