TFSA Investors: How to Prepare for Investing in 2024

2024 will be here before you know it, so make sure you’re prepared with a TFSA, have the funds for it, and buy blue-chip value stocks like these two.

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I know it still seems like it’s far away, but 2024 is really right around the corner. We’re almost at the end of November, and the holidays will be here before you know it. And from there will come the new year of 2024. How should investors prepare? Well, first and foremost, investors should make sure they have a Tax-Free Savings Account (TFSA). From there, here are some tips.

Why the TFSA?

The TFSA is perhaps the best way for Canadians to invest these days — especially during market volatility, but even in a bull market. And a bull market is coming. Even if it takes far longer than expected, a bull market always follows a downturn, even after a recession. And the TFSA can certainly benefit during that time.

Investors should therefore put cash aside to contribute a further $7,000 into their TFSA when January rolls around. Ideally, you want to max out your TFSA. This will help you create as much passive income as possible. That’s both through dividends as well as returns, which both fall into passive-income territory.

But if you have the money set aside and are prepared for 2024 with a TFSA, what can investors do next?

Get into valuable blue-chip stocks

Blue-chip stocks are some of the best options, especially right now. These companies are household names in their sectors. Companies that have also been around for decades in many cases. Yet there are plenty that remain down on the market, even though the TSX today is improving.

That’s why it’s a great time to get in on these investments. You can look forward to almost a guaranteed recovery thanks to decades of cash flow-creating provisions. But there are still two ways to go about it. In either case, you want to find value. However, there are still two options when looking at blue-chip companies.

One option is to identify a stock due for major growth — one that should soar back in a bull market. However, another is to look for a stable stock that’s due to rise steadily, with far fewer chances of drop in the meantime. Let’s look at two options for investors on the TSX today.

Growth and stability

For growth, I would consider a company such as BCE (TSX:BCE). BCE stock has seen its share price drop due to an upcoming merger between rivals. However, it’s still holding the largest number of Canadian customers. Further, it holds a diversified set of streams of income, from media to wireless.

Yet the company should certainly soar back upwards in a bull market. The company has the fastest internet speeds, and customers will continue to look for the best of the best. Meanwhile, it continues to roll out 5G+ as well as expand its options to more areas of Canada. So, I would certainly consider the value stock while it trades at 22.22 times earnings, with a 7.14% dividend yield.

As for stability, I would consider Canadian Utilities (TSX:CU) if you’re looking for some stable returns and long-term dividends. The company has a steady stream of income thanks to long-term contracts. This provides revenue that allows the stock to purchase more utility companies. From there, it can grow its dividend again and again.

And that’s exactly what it’s done. Canadian Utilities stock has increased the dividend for the last 50 consecutive years! So, if you want dividend stability at a steal, I would definitely pick up the stock — especially while shares trade at 14.33 times earnings with a 5.73% dividend yield. Do all this, and you’ll hit 2024 ahead of the curve.

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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