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Cash is something we could all use right now. The TSX Today’s trade continues at 52-week lows. The index is down 10.38% so far this year. But rather than look at this as a burden, I would consider it a strong opportunity — especially for TFSA (Tax-Free Savings Account) investors.
That’s because the TFSA offers you a chance to bring in TSX stocks and see them rebound tax free. Every year, additional contribution opportunities are added to the government program. You now have $81,500 to generate passive income tax-free. So, if you’re interested in getting started, these are my top picks.
A defensive stock
Today, utility stocks are among the most successful on the TSX. So, if you’re looking for a bit of defence during this time of market volatility, I would certainly consider one of these companies. However, because they’re defensive in nature, they aren’t exactly the cheapest. They are expected to increase by a good deal in 2022.
Still, there is a reason these are strong options — especially for your TFSA. Utility stocks can provide long-term passive income through their stable revenue streams. We will always require power and continue to rely upon these companies even in an era of renewable energy.
But among them all, I’d recommend Canadian Utilities (TSX:CU). Motley Fool investors have seen shares rise 9.8% year-to-date and the dividend yield is 4.52%. Although it trades at 25.7 times earnings it has a very valuable two-times book value.
For this reason, I recommend that you find a solid REIT (real estate investment trust). There are not all REIT stocks that are excellent on the TSX. However, there are many great REITs today that provide stable income as well as monthly income.
Industries that are experiencing a decline in activity are what I would look for. These would include energy companies with long-term growth potential. That is what I would recommend. Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP).
This company is one I consider my top choice because it offers a broad range of assets from all over the globe. As the world moves to renewable energy, it continues to add properties to its portfolio. Yet, shares are still down from their all time highs but have increased 6.5% in the last year. So, I would lock in that 2.7% dividend yield before it climbs higher — especially as it trades at a valuable 1.7 times earnings for your TFSA.
One major growth
Finally, if investors at Motley Fool desire significant growth in the years ahead, I would recommend that they look at Shopify (TSX:SHOP)(NYSE:SHOP) once more. Yes, it’s true, shares are down 70% year to date. It’s also true that we could be entering a recession. But e-commerce will be around forever. Shopify stock is designed to make that possible.
Potential shareholders will also find it interesting due to its recent acquisition of Deliverr, as well as a YouTube partnership. Over the past week, shares have risen by 30% This stock could easily double for your TFSA. And it’s why I’d consider it now before a rebound occurs.