Should you invest $1,000 in Hamilton Enhanced U.s. Covered Call Etf right now?

Before you buy stock in Hamilton Enhanced U.s. Covered Call Etf, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Hamilton Enhanced U.s. Covered Call Etf wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

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See the Top Stocks * Returns as of 3/20/25

Here’s the Average TFSA Balance in 2024

Here’s why investors should hold quality stocks such as Microsoft in their TFSA and benefit from outsized gains in 2024 and beyond.

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Introduced in 2009, the Tax-Free Savings Account (TFSA) has gained popularity among Canadians over the past 15 years. It is a tax-sheltered account that offers Canadian residents a lot of financial flexibility.

In 2024, the Canada Revenue Agency increased the TFSA contribution limit to $7,000, raising the total contribution room to $95,000. However, according to a Bank of Montreal report, the average TFSA balance in Canada is much lower at around $41,500, up from $27,000 at the start of 2019.

Around 50% of Canadians are making this TFSA mistake

In the last two years, TFSA investors have faced headwinds such as inflation and higher interest rates, which have impacted their ability to increase their savings. For instance, according to BMO in 2024:

  • 19% of TFSA holders plan to increase contributions
  • 26% of TFSA investors plan to contribute less
  • 46% plan to contribute the same amount
  • 9% of account holders were unsure of their TFSA contributions

Additionally, around 53% of account holders hold investments in the TFSA, while a whopping 47% have their savings in cash. This suggests that almost half of Canadian investors have missed out on stock market opportunities, as equity indices have staged a remarkable comeback since the start of 2023.

Any qualified investment held in the registered account is exempt from capital gains, making the TFSA ideal for those with a higher risk appetite. While you can hold instruments such as Guaranteed Investment Certificates, mutual funds, exchange-traded funds, stocks, and bonds in the TFSA, Canadian investors should consider allocating a small portion of their savings to buy and hold quality companies such as Microsoft (NASDAQ:MSFT).

The bull case for Microsoft stock

Among the largest companies in the world, Microsoft has a market cap of US$3.2 trillion. In the last 20 years, MSFT stock has returned close to 1,450% to shareholders. If we adjust for dividend reinvestments, cumulative returns are higher at 2,380%.

Despite its massive size, Microsoft’s growth story is far from over. For instance, it is the largest investor in OpenAI, the creator of ChatGPT. According to a Statista report, the generative artificial intelligence (AI) market might touch US$1.36 trillion by the end of 2032. If ChatGPT accounts for 10% of this market, it would rake in US$136 billion in annual sales within the next eight years. Moreover, OpenAI is already on track to surpass US$11 billion in sales in 2025.

Microsoft leads several business segments, including public cloud, enterprise software, gaming, and now AI. Analysts covering the tech behemoth expect sales to rise from US$245 billion in fiscal 2024 (ended June) to US$279 billion in 2025 and US$319 billion in 2026. Moreover, its adjusted earnings are forecast to expand from US$11.8 in 2024 to US$15.2 in 2026.

Priced at 28 times forward earnings, MSFT stock is not too expensive, given that adjusted earnings are forecast to rise at a compound annual growth rate of 14.6% in the next five years. Analysts remain bullish on MSFT stock and expect it to surge over 15% in the next 12 months. While it will be impossible for Microsoft to replicate its historical gains, the tech giant remains a solid investment in 2024.

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 Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Microsoft. The Motley Fool has a disclosure policy.

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