Tax-Free Savings Account (TFSA) investors need shields against market downturns or elevated volatility. While investment losses won’t affect contribution rooms, a capital loss in a TFSA is non-recoverable. The Canada Revenue Agency (CRA) sets the annual contribution limit, which is not affected by investment performance.
The TSX has fallen 2.7% in one month due to trade tensions, which are unlikely to subside anytime soon. However, there’s a way not to rebalance your portfolio because of economic instability.
Sound advice is to invest long term to ride out market fluctuations. Also, invest in the best Canadian dividend stocks. Besides the uninterrupted dividend payouts, they offer capital protection and historically recover from a bear market.
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Safety net
The materials sector has risen 16.5%-plus in the last three months and is the top-performing sector thus far in 2025 (+20.3%). Why? Because the sector houses gold stocks, the go-to safety net. The demand for the precious metal is rising, and the price hit a record US$3,004.86 per ounce on March 14, 2025.
Barrick Gold (TSX: ABX) is among the safe havens for income-focused investors. The premier gold stock outperforms year-to-date (+23.8%), notwithstanding the broad market weakness. At $27.44 per share, it pays a decent 2.1% dividend.
This $46.5 billion mining company’s operations and projects are in 18 countries and 5 continents. Barrick boasts a large Tier One, world-class gold and copper asset base, all with at least 10-year business plans. Further exploration should increase its reserve base, while growth projects will support and boost current production levels.
Mark Bristow, President and CEO of Barrick Gold, said, “In 2024, we replaced all the gold and copper we mined and added substantially to our reserves, reinforcing the foundation for future growth. Our integrated mineral resource management and exploration strategy has allowed us to build a foundation that supports a projected 30% growth in gold equivalent ounces out to the end of the decade.”
In Q4 and full year 2024, net earnings rose 106% and 69% respectively to US$996 million and US$2.14 billion. Notably, free cash flow (FCF) climbed 104% to US$1.3 billion from a year ago. Given the balance sheet strength, asset quality, and organic growth projects, Barrick can deliver more value into the future.
Dividend leader
Bank of Montreal (TSX: BMO) is another buy-and-hold investment. Canada’s oldest bank is TSX’s dividend pioneer. The $101.3 billion financial institution started paying dividends in 1829. BMO’s dividend track record (196 years) is approaching two centuries. If you invest today, the share price is $140.04, while the dividend offer is a lucrative 4.6%. The Board recently approved a 5% dividend hike.
In Q1 fiscal 2025 (three months ending January 30, 2025), revenue and net income increased 21% and 65% respectively to $9.3 billion and $2.1 billion versus Q1 fiscal 2024. Management is aware that punitive tariffs are material risks to the economy. Nonetheless, BMO can overcome given its business and geographic diversification.
Darryl White, CEO of the BMO Financial Group, also notes the bank’s strong balance sheet and robust capital and liquidity. The Big Bank stock’s overall return in 52.3 years is 34,845.7% or an 11.9% compound annual growth rate (CAGR).
No flight to safety
TFSA investors don’t need to fly to safety when the market turns sour. Just own rock-solid investments and passive income providers like Barrick Gold and BMO.
