The Tax-Free Savings Account (TFSA) is the ultimate investment vehicle that Canadians could ask for. The tax-sheltered status of the account lets you keep the returns from investments held in your TFSA safe from taxes. Since you contribute with after-tax dollars, the earnings from interest, dividends, and capital gains from a TFSA do not incur taxes, letting you enjoy more considerable long-term wealth growth.

To make things better, any withdrawals from the account will be tax-free. The amount you withdraw from a TFSA in a particular tax year will be added to the contribution limit in the next update. The key to success with a TFSA is making decisions with a long investment horizon. That means picking investments that are stable and can provide compounding returns without the need for constant monitoring for performance.

While adding growth stocks to your TFSA is necessary to inject growth, you must first anchor the portfolio with safe investments. It is a good idea to start by selecting investments offering predictability, low volatility, and underlying businesses that provide essential services. This way, you can count on your investment held in the tax-sheltered account to become a gift that keeps on giving.

Regulated utility stocks

Against this backdrop, the only segment of the economy that I can count on without a second thought is the regulated utility industry. Companies in this sector offer earnings that are typically set through long-term regulatory frameworks. These companies provide virtually guaranteed returns, backed by stable and predictable cash flows.

The best Canadian utility stocks also provide quarterly distributions that keep growing each year. This way, the tax-free returns in your TFSA can keep pace with and even beat inflation. These are the kind of investments that tend to hold up in volatile environments when the rest of the stock market is under pressure.

When I think about a TSX stock that checks all the right boxes as a long-term TFSA holding, no better name comes to mind than Fortis (TSX:FTS).

Fortis

Fortis is the top pick for many Canadian investors among utility stocks. The $39.68 billion market-cap utility holdings company owns and operates several natural gas and electricity utility businesses across Canada, the U.S., and the Caribbean. All three of the markets are highly rate-regulated, and Fortis generates almost its entire revenue through long-term-contracted assets.

This means Fortis’s cash flows are predictable, stable, and offer the company’s management the visibility it needs with the finances that let it make better-informed long-term decisions. The essential nature of its services provides the defensive qualities that many investors seek in long-term holdings.

Its business model lets Fortis generate the kind of returns that let it spend on capital projects and grow shareholder dividends comfortably. Speaking of dividends, Fortis is one of the most reliable dividend-paying TSX stocks. After its latest dividend hike, it has increased quarterly payouts to investors for the last 53 years without fail.

The company’s capital plan expands its asset base each year, letting it provide growing returns that its investors can count on. As of this writing, Fortis stock trades for $77.93 per share and pays its investors $0.64 per share each quarter, translating to a 3.28% annualized dividend yield.

Foolish takeaway

Fortis is one of the most underrated TSX stocks because it does not offer much in terms of capital gains. It might be boring that Fortis doesn’t gain as fast as the rest of the market in bull markets. However, it also means that Fortis stock does not decline at the same pace as the broader market during bearish environments.

Stable, reliable, and able to perform through various market cycles, Foris can be an excellent long-term pick for a self-directed TFSA portfolio.

The post The Single Stock I’d Hold Forever in a TFSA appeared first on The Motley Fool Canada.

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Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

Ever since the US and Israel started a war with Iran earlier this year, global equity markets have fluctuated wildly with every development in the Middle East. As of this writing, the S&P/TSX Composite Index is up by over 9% from the same point a month ago.

The boost to the benchmark index for the Canadian stock market can be attributed to seemingly positive developments. However, the next pullback can come around just as quickly due to the volatile nature of the situation.

The heightened geopolitical tension, persistent inflation issues, trade disruptions, and more are likely to keep the market volatile. Right now, allocating money to defensive stocks can add much-needed stability to your self-directed investment portfolio.

It’s important to note that even defensive stocks can experience downturns in a bear market. However, these are backed by companies with resilient business models that can weather the storm and emerge stronger on the other side. To this end, here are three top picks from the financial, utilities, and energy sectors.

Financial sector

Toronto-Dominion Bank (TSX:TD) is one of the Big Five Canadian Bank stocks, playing a major role in the sector that is effectively the cornerstone for Canada’s economy. Regarded as some of the best dividend stocks on the TSX, bank stocks like TD stock have long been reliable investments. TD Bank stock is approaching the two-century mark of having paid investors their dividends without fail.

TD Bank has solid domestic and international banking operations, and the stock has been an excellent performer on the stock market for decades. As of this writing, it trades for $144.17 per share and pays investors $1.08 per share each quarter, translating to a 3% annualized dividend yield that you can lock into your portfolio today.

Utilities sector

Fortis Inc. (TSX:FTS) is the darling holding for Canadians with a long investment horizon. The $39.7 billion market-cap utility holdings company owns and operates several utility businesses across Canada, the US, and the Caribbean. The business can generate healthy cash flows during every market cycle due to the essential nature of its services.

To make things better, Fortis generates almost its entire revenue from long-term contracted assets, virtually guaranteeing predictable cash flows. The stability of its income lets the company invest in capital programs to expand its earnings base and grow dividends comfortably. As of this writing, Fortis stock trades for $77.93 per share and boasts a 3.3% dividend yield.

Energy sector

Enbridge Inc. (TSX:ENB) is another reliable dividend stock many investors hold for the long run. The $157.4 billion market cap stock is a giant in the Canadian energy industry. The pipeline and energy company headquartered in Calgary boasts an extensive network that is responsible for transporting a significant portion of energy products produced and consumed in North America.

Enbridge has also become one of the biggest names in the region’s utility industry after strategic acquisitions. The company also has a growing renewable energy business that sets itself up for a stronger future in a greener energy industry. Its business model shields Enbridge from commodity price volatility and generates solid cash flows to fund its dividends. As of this writing, ENB stock trades for $72.09 per share and boasts a 5.4% dividend yield that you can lock into your portfolio today.

Foolish takeaway

Boasting solid fundamentals, long-term growth prospects, and the ability to continue delivering returns through market cycles, these three TSX stocks can be excellent picks to consider right now.

If I had $45,000 to invest in the market for stability and long-term wealth growth, I would divide it evenly among TD, FTS, and ENB stock. That said, it is important to remember to diversify your holdings. While these three might be good picks to consider, I would still advise identifying more TSX stocks that fit the bill for your self-directed investment portfolio.

The post The Best Canadian Stocks to Buy Right Away With $45,000 appeared first on The Motley Fool Canada.

More reading

• The 5 Dividend Stocks I’d Be Most Excited to Own at This Moment 
• Suncor, Enbridge, or Canadian Natural — Which Oil Stock Fits Your Portfolio Best?
• TFSA Contribution Season Has Arrived – Here Are 3 Canadian Energy Stocks to Consider
• 3 Canadian Stocks Well Suited for a Long-Term Buy-and-Hold TFSA
• Create Your Own Portfolio Dividend Yield With These 3 Incredible TSX Stocks

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and Fortis. The Motley Fool has a disclosure policy.

Investing in the stock market with a long-term view can be a great way to build substantial wealth. Stock market fluctuation has a massive impact on share prices, especially in the short term. However, those periods of difficulties smooth out as time passes, letting investors benefit from capital gains when bull market environments come around. Here are a few top picks you should have on your investment radar.

Shopify

Shopify (TSX:SHOP) was once (and very briefly) the largest TSX stock by market capitalization. The tech bubble bursting brought it down to more reasonable levels. As of this writing, it trades at a 31.2% discount from its 52-week high. Despite the decline in share prices, the underlying business is doing well. The price shock is more due to macroeconomic uncertainty.

The company’s fundamentals remain solid. The number of merchants relying on its platform keeps growing, there is a greater demand for its payment processing services, and the AI-powered improvements to its offerings make it a business well-positioned for long-term success.

Air Canada

Air Canada (TSX:AC) is not an investment for the weak of heart and stomach. The beleaguered Canadian flag-carrying airline has seen much better days. It seems to be one of the few companies that simply had its wings clipped due to the pandemic. The airline sector has significant expenses, and a few years of critically low numbers of commercial flights put the company in a difficult position.

Even in the post-pandemic era, it is contending with higher operating costs, fuel price spikes, and geopolitical tensions. However, the airline is expanding its international routes and its cargo business is doing well. While cost pressures might keep its share prices down, it might only be a matter of time until we see the stock take flight. Investing at current levels might be a good play for those bullish about the airline.

Dollarama

Dollarama (TSX:DOL) is a darling investment for any market cycle. The owner and operator of the largest discount retail store chain in the country, the $47.23 billion market-cap company, offers the perfect solution to consumers during a harsh economic environment. People look to cut costs when times are tough, and Dollarama offers them necessities at lower and fixed price points.

This lets the business do well regardless of economic cycles. As of this writing, its share prices have pulled back by 17.43% from its 52-week high valuations. It might be a good investment to consider for long-term growth.

Fortis

Fortis (TSX:FTS) is a staple in most stock market investment portfolios for all the reliable dividend income it generates for investors. The $39.61 billion market-cap utility holdings company owns and operates several natural gas and electricity utility businesses across Canada, the U.S., and the Caribbean. Its earnings are predictable and virtually guaranteed, thanks to long-term contracts in regulated markets.

Its reliable income has let Fortis grow its quarterly dividends for more than half a century, making it one of the rare few TSX stocks with such an extensive dividend-growth streak. Boasting a 3.28% dividend yield, it can be a good holding to consider.

CES Energy

CES Energy Solutions (TSX:CEU) is a $3.81 billion market-cap company that provides chemical solutions to the energy industry. Oil and gas producers in Canada rely on its products to enhance efficiency, boost output, and protect critical infrastructure in the energy industry.

The stock has seen share prices rise significantly in recent months. As of this writing, it is up by 182.8% in the last 12 months of trading. The rising demand for its products and an asset-light business model, along with greater upstream activity in North America, give it a lengthy growth runway that investors can leverage.

Foolish takeaway

This mix of stocks can be a good place to pick when building a well-balanced self-directed investment portfolio.

The post 5 Stocks to Hold for the Next Decade appeared first on The Motley Fool Canada.

More reading

• 2 Strong Stocks Worth Putting Your $7,000 TFSA Contribution Behind This Year
• Could Buying This One Stock Actually Put You on a Path to Millionaire Status?
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Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Air Canada, Ces Energy Solutions, Dollarama, and Fortis. The Motley Fool has a disclosure policy.

Generating a reliable passive income stream through stock market investing does not mean you must have millions of dollars to throw into the market. Even when you start small, investing your money smartly in the stock market and using the right investment vehicle for your holdings can help you set yourself up for financial freedom down the line.

Investing in high-quality and reliable Canadian dividend stocks and holding them in a Tax-Free Savings Account (TFSA) might just do the trick. Suppose you have enough contribution room available in your account and $10,000 that you are itching to invest. In that case, I would recommend splitting it evenly across TELUS (TSX:T) and Enghouse Systems (TSX:ENGH) stock.

It can be the simplest way to build a growing income stream that the Canada Revenue Agency (CRA) will not tax.

Telus

Telus is a favourite pick for many investors from the telecom sector. Canada’s telco industry is largely consolidated, and Telus is one of the Big Three in this sector. The company offers vital wireless and internet connectivity. These are things that people do not let go of when cutting costs during troubling economic environments. Besides its core business, Telus has a growing health business that adds another growth avenue for the company, driving more growth for its investors.

The harsh economic conditions have not been easy on its share prices. As of this writing, it trades for $16.93 per share and is down by around 27% from its 52-week high. Due to declining share prices, its dividend yield has inflated to a juicy 10%. Investing in the stock right now means locking in higher-than-usual-yielding dividends and setting yourself up for wealth growth through future capital gains as the stock recovers.

Enghouse Systems

Enghouse Systems is another stock that can make a good case as a buy-and-hold investment for income and capital gains. The company focuses on providing mission-critical and vertically focused enterprise software solutions for businesses across several sectors. Even though tech stocks have fallen from unprecedented highs a few years ago, Enghouse Systems is an atypical one that offers high-yielding dividends that investors cannot ignore.

As of this writing, Enghouse Systems stock trades for $17.45 per share and pays investors $0.31 per share each quarter. After declining by over 36% from its 52-week high, it boasts an inflated 7.1% dividend yield. The company has increased payouts for 18 consecutive years, supported by a solid balance sheet and sustained demand for its solutions. I think it can be an excellent investment at current levels for tax-free income and growth-focused investors.

Foolish takeaway

While I recommended splitting the $10,000 between these two stocks, it is still only a hypothetical scenario. Realistically, I would advise spreading this amount across several high-quality dividend stocks and building a self-directed income-focused portfolio in a TFSA. Putting all your eggs in one or two baskets isn’t the wisest decision. Diversifying it across several high-quality investments can protect your capital while providing significant returns.

The real key to success would be to consistently reinvest dividends to own more shares of the stock. This way, you can unlock the power of compounding to reach your long-term financial goals faster than you would otherwise.

The post The Smartest Way to Invest $10,000 in Your TFSA Right Now appeared first on The Motley Fool Canada.

More reading

• The 5 Dividend Stocks I’d Be Most Excited to Own at This Moment 
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• The Stock I’d Pick Over Telus or BCE — and Why I Keep Coming Back to It
• The Dividend Stock I’d Choose Over Telus or BCE Right Now
• Love Income Stocks? This High-Yield Alternative to Telus Might be Worth a Look

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Enghouse Systems. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy.

When most new investors come across the term “growth stocks,” it isn’t surprising for them to think of Canadian tech stocks. For a long time, tech stocks led the S&P/TSX Composite Index to new all-time highs. However, the tech bubble bursting a few years ago has made investors more cautious about investing without doing their due diligence.

This does not mean there aren’t any growth stocks in the tech sector that you can count on for good returns. However, there are more sectors to consider. The retail and waste management industries seem like unlikely segments of the economy offering high-growth opportunities to investors, but it’s very much a possibility for those who know where to look.

Today, I will discuss two TSX growth stocks, one from each of these industries, to help you broaden your horizons.

Dollarama

Dollarama (TSX:DOL) is the company that owns and operates Canada’s largest chain of discount retail stores. It might seem ironic that the stock behind a company offering everyday items at lower, fixed price points is a growth-focused investment, but the logic makes sense. When the economy isn’t doing well, and people don’t have much to spend, they look for cost-cutting measures. Getting their necessities at lower prices is an opportunity they’ll jump on even when the economy is doing well.

A business that can generate significant revenues regardless of economic cycles can be a solid investment. As of this writing, Dollarama stock trades for 173.36, down by 17% from its 52-week high. I think it can be a good opportunity to invest at a discount and secure wealth growth through capital gains as the stock recovers to a better valuation.

Secure Waste Infrastructure

Secure Waste Infrastructure (TSX:SES) is the perfect example of the saying that one man’s waste is another man’s treasure. SES is an integrated waste management and energy infrastructure company that operates in Western Canada, and it even has business south of the border in North Dakota.

The company primarily provides environmentally responsible fluids and solids solutions to the energy industry. Considering that a significant portion of its revenue comes through long-term contracts, it has the kind of consistent cash flow that reduces its exposure to volatile commodity prices. The dependable revenue base lets the company reinvest in operations and expand further.

As of this writing, SES stock trades for $22.65 per share. Close to its 52-week high, it still looks like an attractive investment to consider for the long run at current levels.

Foolish takeaway

Global equity markets have become increasingly volatile this year, particularly after the U.S. and Israel started a war with Iran and the subsequent chaos in the Middle East. Given the uncertain outlook, typical growth stocks might not be the best investments to consider right now.

However, these two stocks look well-positioned to continue delivering outstanding returns to investors, even in a market as volatile as this. I would not call these two risk-free investments, but DOL stock and SES stock seem like good investments to consider in this environment.

The post 2 Canadian Growth Stocks That Could Make a Big Move in the Next 12 Months appeared first on The Motley Fool Canada.

More reading

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• 5 Stocks to Hold for the Next Decade

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Dollarama and Secure Waste Infrastructure Corp. The Motley Fool has a disclosure policy.

Many people who have been thinking about investing in the stock market don’t realize that it’s not necessary to have a fortune to throw into the market and make big moves to be successful. With the right investments and plenty of discipline, and by unlocking the power of compounding, you can even take $2,000 and turn it into the seed money needed to generate substantial wealth growth.

The key is to identify investments that you can buy and hold for the long run and count on to provide consistent returns. This also means having the stomach to look through the noise when the bear market phases hit and hold on for dear life with the right investments in your self-directed portfolio.

Look for stocks with fundamentally solid businesses that can create a relatively safer growth-focused portfolio. While no investment in the stock market is risk-free, these two TSX stocks can be good holdings against this backdrop to consider.

Loblaw

Loblaw Companies Ltd. (TSX:L) is a $71.3 billion market capitalization giant in the Canadian retail sector. It is the country’s largest retailer and the biggest company selling food and pharmaceutical products. With groceries, apparel, financial services, general merchandise, and more among its offerings, it is as solid a business as can be when it comes to retail.

If you’re looking for a defensive investment to own for the long run, Loblaw fits the bill. The key advantage it has is its proximity to customers. It is an interesting fact that an estimated 90% of Canada’s population lives within 10 kilometres of a Loblaw store. With its partnership with DoorDash four years ago, it can reach an even greater customer base through deliveries.

As of this writing, it trades for $61.02 per share and pays $0.14108 in quarterly dividends per share. While that amounts to a meager 0.92% annualized dividend yield, the potential for long-term returns with capital gains can make it a worthwhile investment.

Rogers Sugar

Rogers Sugar Inc. (TSX:RSI) is a more income-focused investment to consider for those who do not find the dividend yield of Loblaw stock attractive enough. As of this writing, it trades for $6.36 per share and pays $0.09 per share each quarter, translating to a more attractive 5.7% annualized dividend yield.

The dividend yield alone makes it an attractive investment, but there is more to it. Sigar is a low-growth business, but it is a staple in homes and a critical ingredient in various industries. The demand for sugar might not be growing exponentially, but it also doesn’t go away regardless of economic cycles. Being the largest producer of refined sugar and maple syrup in the country, Rogers Sugar is a compelling investment to consider adding to your self-directed portfolio.

Foolish takeaway

Seasoned investors know that being a good investor is not about the size of your capital. Rather, it is about how you make the most of what you have. If the businesses you invest in have what it takes, your investments can provide you with the kind of outsized long-term returns that can help you achieve your financial goals. To this end, I think Loblaw stock and Rogers Sugar stock can be excellent foundations for your self-directed investment portfolio.

The post Top Canadian Stocks to Buy Now With $2,000 appeared first on The Motley Fool Canada.

More reading

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Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The crisis in the Middle East resulting from the US and Israel’s war against Iran and its retaliation has led to the Strait of Hormuz becoming a point of contention. This tiny passage for sea-faring vessels off the coast of Iran is a choke point where around a fifth of global energy flows to and from its destinations.

As soon as things simmer down, energy prices will cool down, but it takes a moment’s notice for more oil price shocks to hit when tensions take a turn for the worse. Considering the significant impact on global economies, it is only a matter of time until a resolution to the conflict comes around. When such a time comes, the markets will likely hit new all-time highs to make up for all the lost time.

While nobody can guarantee how things will play out, I see a shift in the importance of the North American energy industry. I am bullish on Canadian energy stocks being more significant players in the overall industry. If I were to pick one stock to own to leverage this situation, it would be Enbridge Inc. (TSX:ENB).

A good buy when oil is weak

Enbridge is an energy company boasting a $157.1 billion market capitalization. I think it is a fantastic stock to own, especially when weakness hits the energy market. As of this writing, Enbridge stock trades for $71.99 per share, down by roughly 6–7% from its all-time high.

After the red-hot start to the year, it is understandable for risk-averse investors to shy away from energy stocks. However, the pipeline segment transporting the crude oil and natural gas offers a different kind of exposure to the industry. Rather than relying on fluctuating commodity prices, Enbridge charges energy producers based on the volume it transports.

Since Enbridge and other pipeline companies offer a service transporting energy, an oil spike or dip doesn’t have a direct impact on its bottom line. Even if there is an industry-wide slump that pulls down Enbridge’s share price, I think it makes ENB stock a more attractive investment for long-term-focused investors.

Cash cow

Enbridge stock is a reliable dividend stock that has a multi-decade track record of hiking its quarterly payouts to investors. Considering that Enbridge has also started accumulating more businesses in the utility sector, the underlying business is securing predictable and more defensive revenue streams. These factors make its growing dividends even more attractive for investors seeking long-term holdings.

As Artificial Intelligence (AI) infrastructure proliferates, companies like Enbridge can serve companies with infrastructure critical for their operations and growth. The fact that Enbridge is also increasing its investments in the renewable energy sector means it is future-proofing itself for the energy transformation that might still be decades away. Renewables might not account for much right now, but they will be increasingly important as time passes.

Foolish takeaway

After its most recent uptick in share prices, Enbridge stock is trading above its historical trading range and hinting at new all-time highs. Some might argue that the current valuation means investors are paying a premium for owning the stock. I would not mind a pullback in the share price to scoop up more shares of the stock, but that does not mean I do not recommend investing in it right now.

If you already have a position in the stock, I would not shy away from increasing it a little bit. For those thinking of starting a position, it might be better to wait for a pullback closer to its historical average.

The post 1 Oil Stock Worth Buying Today and Holding All the Way to 2030 appeared first on The Motley Fool Canada.

More reading

• The 5 Dividend Stocks I’d Be Most Excited to Own at This Moment 
• Suncor, Enbridge, or Canadian Natural — Which Oil Stock Fits Your Portfolio Best?
• TFSA Contribution Season Has Arrived – Here Are 3 Canadian Energy Stocks to Consider
• 3 Canadian Stocks Well Suited for a Long-Term Buy-and-Hold TFSA
• Create Your Own Portfolio Dividend Yield With These 3 Incredible TSX Stocks

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

The Tax-Free Savings Account (TFSA) is, hands down, the perfect investment vehicle for Canadians. Any income you generate from investments held in a TFSA is tax-free. Whenever you withdraw an amount from the TFSA, it remains tax-free, and the amount gets added to the additional contribution room in the next update.

Allocating some room of the TFSA to hold a self-directed portfolio of monthly dividend stocks can help you turn it into a tax-free income machine. The more stocks you own, the more income you generate. If you take the income from monthly dividends and reinvest it through a dividend reinvestment plan, you can unlock the power of compounding to accelerate your tax-free wealth growth.

Let’s suppose you have $14,000 of available contribution room. Here is how I would allocate that amount among three monthly dividend-paying stocks.

Granite Industrial REIT

Granite Industrial REIT (TSX:GRT.UN) is a stock I’d happily allocate around $5,000 to for generating monthly tax-free income. The real estate investment trust (REIT) has the kind of defensive qualities that make investors feel confident about investing for the long run. The REIT has an extensive portfolio of rock-solid institutional quality industrial properties across Canada, the U.S., and Europe.

Most of its tenants have long-term leases for the high-quality properties it offers. The trust boasts a modest payout ratio and historically high occupancy rates. Considering the fact that it has also increased its payouts 15 years in a row, it can be an excellent investment to compound your wealth growth in the long run. As of this writing, it trades for $92.48 per unit and pays investors $0.2958 per month per unit.

Exchange Income

Exchange Income Corp. (TSX:EIF) is another stock that I would allocate $5,000 to in my TFSA. The company is a diversified acquisition-focused company that targets the manufacturing and aerospace & aviation industries. Its disciplined approach to identifying already profitable and well-established businesses before investing in them gives it the defensive qualities I like in long-term holdings.

There is a growing interest in defence and infrastructure investments, particularly in the Arctic region. This development means Exchange Income has potentially substantial tailwinds readying up to fill its sails and propel it to greater heights. Its strategy has been successful over the years, and it has increased its payouts 18 years over the last two decades. As of this writing, it trades for $102.72 per share and pays investors $0.23 per unit each month.

First Capital REIT

First Capital REIT (TSX:FCR.UN) is another REIT, but it has a completely different focus than Granite. Instead of the industrial sector, it is oriented toward the retail sector of the economy, specifically the premium grocery segment. It has an extensive portfolio of retail-focused properties anchored by big names in the retail sector.

First Capital’s portfolio comprises properties in some of the best urban locations across Canada, the kind of places where top retailers want to have a presence. Its portfolio lets the trust generate substantial rent from properties with high occupancy rates. With the latest hike to its monthly payouts, it offers $0.076 per share. Considering that it trades for $23.59 per unit, it can deliver excellent returns.

Foolish takeaway

If you take a hypothetical $14,000, allocate $5,000 each to Granite REIT and Exhcange Income, and the rest to First Capital REIT, here’s what the monthly tax-free income might look. However, by reinvesting those dividends and allocating more when you get additional contribution room, you can generate even greater monthly returns to achieve your long-term financial goals much faster.

The post How to Set Up a $14,000 TFSA That Could Pay You Monthly for Life appeared first on The Motley Fool Canada.

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Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends First Capital Real Estate Investment Trust and Granite Real Estate Investment Trust. The Motley Fool has a disclosure policy.

This year has not been the calmest for stock market investors worldwide. The most recent foray of developments on a global scale has seen Israel and America start a war with Iran, which has, in turn, closed the Strait of Hormuz. Conflicting news coming from our neighbours south of the border keeps causing fluctuations, and it seems like it is becoming next to impossible to know how to deploy cash into the markets to take advantage of the rapid market movements.

There are opportunities to be leveraged in this market environment, but those with a long investment horizon might fare better than most. If you have yet to use the additional contribution room in your Tax-Free Savings Account (TFSA), here are a few high-quality Canadian stocks you can consider allocating some of that space to as long-term bets.

A restaurant business and a critical agricultural stock

While most of the world’s attention is on oil and energy, food is another vital element being affected by the crisis in the Middle East.

Now, Restaurant Brands International (TSX:QSR) is a massive name in the restaurant industry that owns major quick-service food brands. The company has a franchise model that lets it minimize capital expenses while generating healthy and recurring revenue. When things become increasingly expensive, people will want affordable convenience, and fast food definitely offers that.

Then, there is Nutrien (TSX:NTR), one of the world’s most important companies for the agricultural industry. The company produces and sells critical crop inputs that commercial farmers worldwide need to improve and protect crop yields. It offers massive exposure to nitrogen and potash, backed by an extensive retail distribution network.

As global supply chains become increasingly disrupted, QSR stock offers relief through affordable convenience. At the same time, NTR stock offers exposure to products that will become increasingly more valuable to combat potential food scarcity.

Retailers that offer entirely different benefits

People spending on retail change their buying habits based on the economic environment.

At one end of the spectrum is Aritzia (TSX:ATZ), a premium fashion company with several high-quality names under its belt. It has a massive and loyal customer base and has been expanding its presence in the United States. When people have more to spend, consumers will not shy away from indulging themselves by investing in nice clothes that make them feel good. The scenario changes when they need to start saving.

Dollarama (TSX:DOL) comes in as a retail stock that goes completely the opposite way. Dollarama owns and operates the country’s largest chain of discount retail stores. It offers everyday items at lower and fixed price points to its customers. When budgets tighten and people look to save whatever they can, discount stores like Dollarama offer the relief they need.

The combination of these retail stocks offers a good balance between consumer wants and needs that savvier investors can leverage as long-term investments.

Foolish takeaway

Refreshing your TFSA with a few solid long-term picks can be a good way to put your money to work in the market right now. Owning Nutrien and Restaurant Brands International offers you exposure to the agriculture and restaurant industries, both of which are crucial. Dollarama offers exposure to a segment of retail that does well in all market cycles, and Aritzia can help investors benefit from growing buying power as the economy gradually improves. If you have been wondering how to deploy $7,000 into the stock market for substantial tax-free returns, these four stocks warrant being on your radar.

The post 4 Canadian Stocks Worth Adding to Give Your TFSA a Fresh Direction appeared first on The Motley Fool Canada.

More reading

• 2 Strong Stocks Worth Putting Your $7,000 TFSA Contribution Behind This Year
• 2 Dividend Stocks I’d Hold in an RRSP and Never Consider Selling
• 2 TSX Stocks I’d Move Quickly to Buy the Next Time Markets Pullback
• 3 Canadian Stocks Well Suited for a Long-Term Buy-and-Hold TFSA
• 1 Canadian Mining Stock Worth Considering Right Now

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Aritzia. The Motley Fool recommends Dollarama, Nutrien, and Restaurant Brands International. The Motley Fool has a disclosure policy.

The Tax-Free Savings Account (TFSA) has been a blessing for Canadians since its inception in 2009. If you have been eligible to contribute to a TFSA since that time, the cumulative contribution room would be $109,000.

Due to its tax-sheltered status, the returns from any investments held in a TFSA can grow tax-free. You can withdraw funds from the account without incurring taxes, and the Canada Revenue Agency (CRA) adds back the withdrawn amount to your next year’s contribution room.

Yet, Statistics Canada found that Canadians in the 30–34 age range used just $16,760 from their TFSA contribution rooms in 2023, leaving $61,882 completely unused. That is an enormous amount that would have served those Canadians far better, especially at such a critical wealth-building time in their lives.

This gap between available and used contribution room highlights the fact that most Canadians still don’t understand how the TFSA can serve as a powerful investment vehicle. Failing to make the most of your TFSA means losing out on potentially thousands from your retirement nest egg.

Why it’s better to use the contribution room

Suppose you have $61,882 set aside in a high-interest savings account or in Guaranteed Investment Certificates (GICs). These types of investments do not offer returns of more than 3% annually. Even with conservative investments, the amount can return around $1,800 to almost $2,000 per year.

However, using the same amount to invest in high-quality stocks in a TFSA can return far more in the long run. By limiting yourself to holding cash or GICs in the account, you’re sacrificing the potential of compounding to accelerate your tax-free wealth growth, especially over the next few decades.

Generate growth and income

If you seek higher-yielding returns in a TFSA, allocating some of the contribution room to hold high-quality dividend stocks can be an excellent way to get them. To this end, a blue-chip stock like BCE Inc. (TSX:BCE) might be a great investment to consider.

BCE is a $30.2 billion market-cap giant in the Canadian telecom industry. It is one of the three companies that hold the major market share of the Canadian industry. If you want a high-yield dividend stock to boost your passive income and long-term capital gains, BCE can be a good pick.

The company has historically rewarded investors with consistent dividend hikes. Due to rising costs, regulatory pressures, and increasing competition, its management was forced to cut its annualized dividends last year to around half of what it previously offered. Despite slashing its payouts, it offers high-yielding returns that are more sustainable for the underlying company to support.

As of this writing, BCE stock trades at $32.42 per share and pays investors $0.4375 per share each quarter, translating to an annualized dividend yield of 5.4%. Considering that even a high-interest savings account in Canada doesn’t offer these kinds of returns, it should be easy to see why it can be a good investment to consider.

Foolish takeaway

When investing in the stock market, never forget the importance of diversification. Putting all your eggs in one basket is too risky for even the most risk-tolerant investor. Spreading your money across several investments can protect your portfolio from losses in a few of them by offsetting them with gains in others. BCE stock can be an excellent starting point for a TFSA portfolio, but I would advise using it only as a starting point to build a well-balanced collection of investments.

The post How Does Your TFSA Stack Up Against the Average Canadian at 30? appeared first on The Motley Fool Canada.

More reading

• The Stock I’d Pick Over Telus or BCE — and Why I Keep Coming Back to It
• The Canadian Dividend Stock I Trust Most to Weather Any Kind of Market Storm
• The Dividend Stock I’d Choose Over Telus or BCE Right Now
• 3 Canadian Stocks That Could Benefit From a Softer Economy
• 3 Dividend Stocks That Look Worth Adding More Of

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.