The TFSA (Tax-Free Savings Account) is a registered Canadian account that can be used to hold a portfolio of growth, value, and dividend stocks. In 2024, the TFSA contribution limit has increased to $7,000, up from $6,500 in 2023 and $6,000 in 2022.
Here are three quality TSX stocks you can buy in the TFSA right now, allowing you to derive outsized gains in the upcoming decade.
Shopify stock
An e-commerce giant, Shopify (TSX:SHOP) has already returned 117% to shareholders year to date, valuing the company at $131 billion by market cap. Despite a slowing macro environment in 2023, Shopify is on track to increase sales by $7.5 billion in 2022 to $11.1 billion in 2024.
Due to an asset-light business model, tech stocks, including Shopify, benefit from high operating leverage, which means profit margins grow at a faster pace than revenue.
According to Bay Street, Shopify’s adjusted earnings are forecast to expand from $0.05 per share in 2022 to $1.37 per share in 2024. The company’s focus on cost efficiencies and exit from unprofitable businesses will help it deliver consistent net income in 2023 and beyond.
Shopify has onboarded more than two million merchants on its platform due to a widening portfolio of products and services. Additionally, Shopify benefits from a wide competitive moat as it is the second largest e-commerce platform in the U.S. after Amazon.
Despite its lofty valuation, SHOP stock is positioned to derive market-beating returns for long-term investors.
Brookfield Asset Management stock
One of the largest asset managers in the world, Brookfield Asset Management (TSX:BAM) is valued at $20.6 billion by market cap. With investments in infrastructure, clean energy, private equity, credit, and real estate, BAM is a well-diversified alternate asset manager with US$865 billion in assets under management.
It ended the third quarter (Q3) with US$440 billion in fee-bearing capital, allowing the company to pay shareholders an annual dividend of $1.74 per share, indicating a yield of 3.3%. BAM estimates the market for alternative investments to grow to US$23.2 billion in 2026, up from US$4 billion in 2010. Further, alternatives might account for 60% of institutional allocation by 2030, up from just 5% in 2000 and 30% in 2021.
These secular tailwinds should enable BAM to grow its fee-bearing capital to more than US$1 billion by 2028, supporting dividend hikes and earnings growth.
Barrick Gold stock
The final TSX stock on my list is Barrick Gold (TSX:ABX), which might gain significant pace in 2024. Generally, gold prices are inversely related to interest rates. With multiple rate cuts scheduled in 2024, gold prices are poised to touch all-time highs in the next 12 months. Further, the yellow metal thrives amid economic and geopolitical turmoil.
There is a chance that several economies might enter a recession in 2024, while geopolitical tensions might also remain elevated in the near term, acting as key drivers for gold.
Mining stocks such as Barrick Gold can expand production to benefit from higher commodity prices and enjoy robust earnings. A debt-free balance sheet also allows Barrick Gold to pay shareholders a dividend yield of 2.25%. Priced at 17.4 times forward earnings, ABX stock trades at a discount of 20% to consensus price target estimates.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
