1 TFSA Core Holdings I’m NEVER Selling!

Berkshire Hathaway (NYSE:BRK.B) stock is a great long-term TFSA holding to just buy and forget for decades.

When it comes to your TFSA (Tax-Free Savings Account), you should aim to hold investments that you’d ideally like to hold for life. Indeed, the buy-and-hold-forever strategy for investing can be difficult, especially with the rise of disruptive technologies such as generative and predictive artificial intelligence (AI).

In any case, investors should insist on incredibly wide economic moats so that when disruptions do arise, investors can continue to sleep comfortably at night, knowing that the high barriers to entry put forth by a given wide-moat firm will help it protect its slice of economic profits. Indeed, competitive threats are always hungry for a piece of superior profits where they’re to be had.

Think wide moats as you seek long-term holdings

These days, AI chips have proven a profound technology that’s drawn in a wave of sales growth. Despite having a wide moat in the form of top AI talent, the explosive growth in some of the AI chip darlings will not last—not while almost every company is fully alert and aware of the profound growth to be had in the AI chip market.

As more companies target the AI chip scene, eventually, the easiest profits to be had in the space will be gone. And the next thing you know, AI chips are just another commodity that more than just one or two firms can make. Indeed, where there is incredible demand, there are sure to be firms rising up to the occasion to meet the demand and rake in the impressive profits to be had.

In this piece, we’ll concentrate on one wide-moat candidate to hold as a core to your TFSA portfolio.

Berkshire Hathaway

Berkshire Hathaway (NYSE: BRK.B) is an insurance and investment holding firm run by one of the best investors of our time: Warren Buffett. Despite Buffett’s age, he continues to run Berkshire for the long haul. And though he may have been more open to technology stocks compared to the past, he’s still about playing the long game.

Though Berkshire probably won’t score market-crushing gains as it has in the distant past, it’s still a great foundation for any TFSA portfolio. Apart from having a ton of impressive, wide-moat, and well-operated businesses from the one stock, ranging from BNSF railway to Fruit of the Loom, GEICO, and Dairy Queen, the stock doesn’t pay a dividend.

When it comes to your TFSA, that’s a good thing; even U.S. dividends tend to be subject to withholding taxes (of 15% at the time of writing for Canadian investors). Even in a TFSA, you’ll still see just 85% of your dividend payments from U.S. companies held within it. As long as Berkshire doesn’t pay dividends, it ought to be viewed as one of the more tax-efficient TFSA holdings out there for Canadian investors seeking to tap into the U.S. for impressive gains over time.

Finally, Berkshire tends to buy its own stock when it deems it’s undervalued. For a Canadian, buybacks over dividends are the way to go!

Fool contributor Joey Frenette has positions in Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.

More on Investing

Woman checking her computer and holding coffee cup
Energy Stocks

Hydro One Stock: A Growing Grid Doesn’t Mean You Should Pay Any Price

Hydro One’s grid investment supports growth, but my preferred entry offers a better starting yield than today’s price.

Read more »

money goes up and down in balance
Dividend Stocks

How Much to Invest in This TSX Stock for $750 a Quarter in Dividends

Want $750 a quarter? Alaris pays $1.56 a year at $21.54. See how many units to buy, what Q3 showed,…

Read more »

Google wideshot cc Alphabet
Retirement

A $20,000 TFSA Investment Strategy That Could Fund Your Retirement

Alphabet (NASDAQ:GOOG) could be a massive winner in the months following the Democratic sweep in the U.S. midterms.

Read more »

A glass jar resting on its side with Canadian banknotes and change inside.
Stocks for Beginners

Investing With a Small Budget in an Uncertain 2027

Build an emergency fund before investing for the long term across equity and fixed-income investments.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Fortis Unveils Its Biggest Spending Plan Ever: $32.2 Billion for Power and Gas Projects

Fortis has unveiled its largest-ever $32.2 billion investment plan, which could support long-term earnings growth and higher dividends for shareholders.

Read more »

Canadian energy stocks are rising with oil prices
Energy Stocks

Suncor vs. Canadian Natural: Which Dividend Would I Rely On When Oil Falls?

Canadian Natural is my income preference through weaker oil prices, while Suncor offers refining exposure and a newly increased dividend.

Read more »

senior relaxes in hammock with e-book
Dividend Stocks

A Top TSX Dividend Stock Paying Close to 6% Today for Steady Passive Income

This industry leader has a great track record of dividend growth.

Read more »

person with spyglass looks at ocean horizon
Dividend Stocks

TELUS Stock: What $5,000 Invested Today Could Look Like in 5 Years

TELUS stock’s steep decline, attractive 5.9% dividend yield, and ongoing debt reduction efforts could make a $5,000 investment today worth…

Read more »