Young investors should take calculated risks with their TFSAs (Tax-Free Savings Accounts) when it makes sense. Now, that doesn’t mean chasing the hot stock of the day with the intention of making a quick profit over the course of a few days or weeks. Rather, it means looking for an investment where the risk/reward is balanced out, perhaps in your favour. Remember, a higher risk should accompany a higher reward. But don’t max out the risk side just so you can maximize your chances of scoring the biggest returns over some timespan.
At this juncture, I’d argue that “growth at a reasonable price” could be the strategy that young TFSA investors should look to. Indeed, there’s no shortage of red-hot stocks riding high on the artificial intelligence (AI) trend these days. But just how many of them are attractively priced? That’s the million-dollar question that all investors should ponder this January.
In short, I’d shoot for growth as a young TFSA investor, but only if the price makes sense and the growth profile at hand is sustainable.
Shopify
Shopify (TSX:SHOP) stock is a great pick-up for any TFSA investor seeking exposure to the small- and medium-sized (SMB) end of the e-commerce market. The stock is getting somewhat fully priced, even expensive, again after the year’s run.
That said, 2024 will be the year that sees the firm continuing blowing away quarterly estimates. Of course, unforeseen strength in the consumer could be the much-needed boon for SHOP stock to move past the $120 mark.
For now, I view SHOP stock as a must-watch and perhaps a must-buy on any steep pullback off 52-week highs. From a longer-term perspective, I’d not be against picking up a few shares here, so as long as you don’t have a weak stomach. The only thing I think is a guarantee for 2024 is that Shopify stock will be a much choppier ride than the rest of the market.
Apple
Apple (NASDAQ:AAPL) stock has been a relative laggard when it comes to the Magnificent Seven stocks. Indeed, the company’s revenue growth has been really dragging of late. The recent Apple Watch woes are not helping Apple sustain a push to the $200 level.
Though the patent dispute could see certain Apple Watch models taken off a few shelves, I’d argue the matter is mostly noise. The long-term fundamentals are still intact, and with a potentially revolutionary new device ready for prime time in 2024 (Apple Vision Pro), I’m actually in the camp that believes Apple could outpace its Magnificent Seven peers in the new year.
All considered, Apple stock still looks ripe for picking at north of $192 per share.
Better buy: Shopify or Apple stock?
I like Apple stock better at this moment, given the better valuation and prospects on the horizon. There are just too many great catalysts in the cards for 2024 to be throwing in the towel here just because Apple stock hasn’t been the top mega-cap tech stock to own.
