For many investors, the goal when it comes to the stock market is to build for themselves a secure financial future. To put it simply, that could mean ensuring a comfortable retirement. However, for new investors, getting started can be very difficult. There are many different kinds of accounts you can open and even more possible stocks someone could invest in.
In my opinion, I believe all investors should focus on maxing out a Tax-Free Savings Account (TFSA) first. As its name suggests, any gains generated in one of these accounts can be withdrawn tax free. That could help investors snowball their accounts much faster than they’d be able to in another account type. In this article, I’ll discuss two TSX stocks that investors should consider buying in their TFSA. I believe these companies could help you achieve the comfortable retirement you’re dreaming of.
This is one of the best stocks in Canada
I believe Fortis (TSX:FTS) is one of the best stocks to hold over the long term. For new investors, this company has a business that is easy to understand and a stock that isn’t very volatile. In my opinion, those are the kinds of companies that you should be after in a TFSA. If you haven’t heard of it before, Fortis is a utility company. It provides regulated gas and electric utilities to more than three million customers across North America.
Over the past five years, Fortis stock has gained more than 34%, dividends excluded. To put that into perspective, the S&P/TSX has gained about 23% over the same period. That means Fortis has managed to outperform the broader market by a decent margin.
As mentioned earlier, Fortis offers a great dividend. In fact, it’s known for being one of the best dividend payers in Canada. Fortis has managed to increase its dividend distribution in each of the past 49 years. That dividend could help you maintain a solid income in your retirement years.
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When in doubt, go with one of the Big Five
There are many other companies that I think would be solid choices to have in your TFSA. However, for the sake of this article, I’ll discuss one of the Big Five. For those that are newer, you may not associate that term with any particular group of companies. However, more seasoned investors will quickly think of the Big Five Canadian banks upon reading that term.
In my opinion, the Big Five are an excellent group of stocks. These companies are well established and maintain a formidable lead on the smaller competitors in the Canadian banking industry. Of that group, I believe Bank of Nova Scotia (TSX:BNS) is the most appealing pick.
What makes Bank of Nova Scotia so interesting to me is its dividend. As of this writing, Bank of Nova Scotia offers investors a forward dividend yield of 6.56%. Usually, stocks that offer really high dividend yields aren’t able to sustain dividends for a long time.
This was seen during the COVID-19 pandemic, when many high-yield dividend companies needed to suspend dividend programs in an attempt to keep their businesses afloat. However, Bank of Nova Scotia has been paying shareholders a dividend for the past 190 years. Because of that, I’m very confident that the company could continue to do so for many more years.
