I’m of the view that creating a million-dollar portfolio is no longer a big, hairy, audacious goal. In reality, more soon-to-be retirees will need a portfolio of this size to retire comfortably. I’ve discussed in other pieces that in order for the median Canadian to have the retirement they’re looking for, they’ll need around $2 million (in some cases more) to retain a spending level similar to where it was during one’s working life.
With that in mind, a Tax-Free Savings Account (TFSA) is one of the best tools for investors to save for retirement, as the funds that are pulled out of these TFSAs are done so on a tax-free basis in retirement. That means that a $1 million TFSA could be much more valuable, on a tax-adjusted basis.
Here are two top stocks I think deserve a place in all investor TFSAs right now.
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Shopify
Growth stocks are the preferred investment type in a TFSA, since capital gains are tax free. Thus, it makes sense to kick off this list with Canada’s preeminent growth stock, Shopify (TSX: SHOP).
With surging e-commerce volumes in recent quarters supporting Shopify’s underlying fundamentals, this top growth stock is among the cheapest it has been in a long time. On a forward basis, Shopify’s stock is now trading at around 80 times earnings. That’s still high compared to most stocks, but it’s a reasonable multiple given Shopify’s earnings growth rate in recent years.
For those who believe that the growth we’ve seen in the e-commerce sector will continue for decades to come, Shopify is the way to play this trend. This company’s e-commerce platform is among the best in the sector, and should continue to drive both top and bottom-line growth (along with solid cash flows) over the long term. That’s good enough for me.
The Metals Company
One small-cap Vancouver-based company I remain very bullish on right now is The Metals Company (NASDAQ: TMC).
That remains the case, with this deep sea mining player among the early entrants in what I think could be an absolutely massive market. There are varying estimates for how large this market will ultimately be, but I think TMC is among the leaders in looking to capitalize on a metals and minerals space which could be worth trillions of dollars in coming years.
I should note, this is a speculative pick. Plenty needs to go right in order for TMC stock to see the kind of appreciation some see ahead.
That said, I’m of the view that the risk is worth the reward in this case. A number of permit approvals, as well as the fact that TMC is looking to mine under the U.S. flag in its international jurisdictions, could lead to a faster pathway to commercialization than many think.
