Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances.
Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities.
Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. Amy’s work can be found regularly on the Financial Post and MoneyWise Canada.
When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog Finley, and travel.
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Today’s volatile market is likely to be here for quite some time. In fact, it could be years before there is a consistent rebound. Even if a vaccine is created and distributed, it will take more than just a vaccine to return the economy to normal. But that being said, there are still TSX stocks that provide a defence for investors.
If you have a Tax-Free Savings Account (TFSA), you already have the top choice in your arsenal. All you need now are solid TSX stocks that can see you through this downturn and for years to come. In my opinion, those choices right now have to beEnbridge(TSX:ENB)(NYSE:ENB),Docebo(TSX:DCBO), andCloudMD Software & Services (TSXV:DOC).
Enbridge
The tides are changing when it comes to pipelines, so investors should be wary. If you’re looking to hold onto pipelines for another 30 or 40 years, then Enbridge might not be your best option. That’s because more and more investment is turning towards renewable energy. So, oil and gas and the pipelines that ship them could go the way of coal.
However, if you’re looking to make some cash in the next decade or two, Enbridge is the perfect stock. The company has been beaten down due to the oil and gas crisis, and unfairly so.
Enbridge provides the solution to the gas glut: pipelines. It is in growth mode with several projects about to come online. It could be the saviour the Canadian oil sands needs in this next decade. Meanwhile, it has a solid 8.69% dividend yield supported by decades of long-term contracts! So, you get an undervalued stock with huge dividends as a reward for your patience.
Docebo
Now, if you’re looking for a company to continue rising in share price throughout the downturn, Docebo is your top choice. The company came on the scene at the perfect time, right before the pandemic. Now, the company’s learning management system is exactly what every business around the world desperately needs.
During Docebo’s second quarter, the company saw year-over-year revenue growth of 46.5%, while subscription revenue grew by 55.1%! Meanwhile, investors who got in on the ground floor have seen returns of 272% as of writing. But it’s likely this company is only getting started, as large enterprises continue to sign on.
CloudMD
Finally, CloudMD is another company that came along at the right time. Virtual doctors have become a staple in today’s pandemic world. CloudMD is now in acquisition mode, buying up as many of these virtual doctors as it can to create a powerhouse of online medical advice. The goal is to provide patients with “all points of care” from their phone, tablet, or computer.
The company is up a whopping 622.89% since its initial public offering but is still an incredibly cheap stock. With a market capitalization $406 million, the company has a ton of room to grow into a market leader in virtual medicine. Investors could quickly see their investments double in the next few years, pandemic or no.
Bottom line
All three of these stocks provide the perfect portfolio of TSX stocks for TFSA investors. The main attraction is that each is financially viable with plenty of room to grow, both in revenue and returns, for decades to come. As always, the Motley Fool recommends you hold onto stocks like these for the long term. So, see yourself through this pandemic and well beyond.
The buy-and-hold strategy works well with dividend stocks. CT REIT (TSX:CRT.UN), Enbridge (TSX:ENB), and Royal Bank of Canada (TSX:RY) are three resilient stocks from different sectors. Investing in all three can help you diversify your passive-income portfolio and grow your dividends annually.
The buy-and-hold strategy works well with dividend stocks. CT REIT (TSX:CRT.UN), Enbridge (TSX:ENB), and Royal Bank of Canada (TSX:RY) are three resilient stocks from different sectors. Investing in all three can help you diversify your passive-income portfolio and grow your dividends annually.
Bottom line. There's no right number of stocks to hold in a TFSA, as it'll depend on your overall risk portfolio. However, it's hard to go wrong with five to 10 blue-chip stocks like TD that can generate both capital appreciation and dividend income.
U.S. stocks held in a TFSA are subject to 15% withholding tax on U.S. dividend income. Withholding tax would apply to other foreign stocks held in a TFSA, with rates starting at 15%, depending on the country. Only Canadian stocks are not subject to withholding tax on their dividends inside a TFSA.
The tax exemption provided for in the Convention between Canada and the United States for RRSPs and RRIFs is rather exceptional and not found in any other tax treaty signed by Canada. Therefore, for tax purposes, it will generally always be better to hold US investments in RRSPs rather than TFSAs.
With its ability to deliver solid capital gains and focus on returning higher cash to its shareholders, Canadian Natural Resources (TSX:CNQ) is a compelling stock for TFSA investors. This Canadian blue-chip stock has appreciated more than 240% in five years, delivering an impressive average annualized return of 27.7%.
A key strategy is to contribute early, so your investments have more time to grow. Make sure you're consistently contributing to your TFSA by enabling automated deposits into your account. This will keep your TFSA growing in a tax-free environment. Remember to ensure that you stay within your contribution room.
Yes, you can lose money on a TFSA, but it is easy to avoid losing your money. Typically, people who lose their money on a Tax-Free Savings Account are people who are using it for more volatile investments or people who are over-contributing.
A TFSA is a tax-free savings account. All Canadian investments held in a TFSA are not taxed when withdrawn, nor are the gains made on these investments taxed. However, this does not apply to U.S. stocks held in a TFSA. U.S. stocks held in a TFSA are subject to a 15 percent withholding tax on dividends.
If you have cash to put to work in a TFSA and adequate contribution room available, allocating a portion of it to dividend stocks can be a terrific way to grow your money. Between the tax-free dividend income, capital gains, and possible compounded growth, you can be a much wealthier investor when you retire.
You are taxable in Canada on capital gains and losses that result from the sale of shares of a U.S. corporation or other U.S. investments. As with other capital gains and losses, 50% of the capital gains or losses are subject to Canadian tax at your marginal tax rate.
For a TFSA, the ETF to use is Vanguard S&P 500 Index ETF (TSX:VFV). This ETF is traded in Canadian dollars. The TFSA isn't exempt from foreign withholding tax, so there are no benefits to converting currency and holding VOO here. VFV's expense ratio is slightly higher at 0.08%.
For non-dividend U.S. stocks, holding them in TFSA could be a smart choice. Like Canadian stocks, you won't pay a capital gains tax on U.S. stocks when you sell them for a gain. And unlike RRSPs, you won't pay taxes when you withdraw money from your TFSA before retirement.
If you have cash to put to work in a TFSA and adequate contribution room available, allocating a portion of it to dividend stocks can be a terrific way to grow your money. Between the tax-free dividend income, capital gains, and possible compounded growth, you can be a much wealthier investor when you retire.
Holding an all-in-one ETF in a TFSA also makes it even easier to see how much you've saved. You don't have to add up multiple investment values, there aren't a variety of fees to worry about, and you can more easily create a portfolio that matches your needs. All-in-one ETFs fit nicely inside the TFSA structure.
Income-seeking investors may consider holding ETFs such as iShares MSCI Canadian Quality Dividend Index ETF (TSX:XDIV) in their TFSA. The XDIV ETF is a portfolio of Canadian stocks with above-average dividend yields and steady or increasing payouts.
Introduction: My name is Kareem Mueller DO, I am a vivacious, super, thoughtful, excited, handsome, beautiful, combative person who loves writing and wants to share my knowledge and understanding with you.
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Enbridge
Enbridge