If you’re using your TFSA (Tax-Free Savings Account) as a savings account, you might not be best positioned to unlock the full power of tax-free compounding. Undoubtedly, even if you’re a tad nervous about the slate of stock valuations today, there are still worthier places to park TFSA cash for a shot at better results.
Undoubtedly, from low-beta equity ETFs to REITs (Real Estate Investment Trusts) to bond funds and even precious metals, there are growthier places to invest in with one’s TFSA savings. And if you’re a young investor, all the more reason to start putting some of the savings to work in other securities that can actually help you grow your wealth after inflation.
Undoubtedly, if you’re expecting some sort of expenditure in the near-future (think college, mortgage, or marriage), it makes perfect sense to stick with cash. With valuations in a lofty spot, you can’t go wrong with plowing TFSA cash into a safe savings account or a GIC (Guaranteed Investment Certificate) that can preserve your wealth.
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It’s worth investing with your TFSA savings cash, especially if you have a long-term horizon!
While GICs offer better rates than TFSA savings accounts, you won’t have the same degree of liquidity. For some, that’s perfectly fine, making GICs a great safe place to park one’s cash, especially if one’s big expenditures are a year or two out. With interest and GIC rates on the multi-year descent, though, it’s becoming quite unrewarding to be a cautious GIC investor.
Of course, playing it safe leaves a lot of potential return on the table. And if you don’t envision yourself withdrawing cash from a TFSA at anytime over the next couple of years, stocks, which are proven to be the best ways to grow wealth over the long term, are the way to go. And in this piece, we’ll look at two stocks that I view as worthy buys as we pass the mid-point of January (can you believe two weeks of 2026 have passed already?).
Loblaw
Loblaw (TSX: L) has seen its shares fly high in recent years. Indeed, L stock’s chart looks like that of a red-hot AI stock. And while the grocer has embraced various technologies to enhance operational efficiency and drive sales, the main attraction for Loblaw remains the impressive value it provides customers. Though some customers have voiced concerns about its pricing practices amid inflation, the firm seems to have done a good job of listening to customers and pivoting accordingly.
Either way, customers are continuing to shop at Loblaw stores (think Superstore, No Frills, and Shoppers Drug Mart, just to name a few banners) and they’re not about to stop anytime soon, especially as some Canadian consumers look to tighten the purse strings in order to save even more money in the new year.
A recent survey from TD Bank suggests that a whopping 67% (just over two-thirds) of Canadians intend to cut spending in this new year. That’s a good New Year’s resolution to have, and while inflation has cooled, it has continued to be a challenge to budget. Either way, this survey suggests value will continue to win. And for those looking to stretch their dollar, Loblaw stores, especially No Frills, remain one of the top places to shop. In short, Loblaw is one of the retail kings of value, and for that reason, it’s poised to keep winning.
