Written by Jed Lloren at The Motley Fool Canada
Like many other Canadians, I take advantage of owning a TFSA. This type of investment account allows me to withdraw gains without having to worry about paying taxes in the future. In 2022, Canadians are given an additional $6,000 of contribution space. With that said, where do I intend to put that money? In this article, I’ll discuss three stocks I’m adding to my TFSA.
My top growth stock for 2022
The first stock I’ll be buying is Shopify (TSX:SHOP)(NYSE:SHOP). This stock is already in my TFSA, so I’ll actually be adding to my position. I have previously written that Shopify is my top growth stock for 2022. As such, it makes sense to continue adding to this position. This is especially true today, as investors have the opportunity to buy shares at a 37% discount from its recent highs.
Shopify is a global leader within the e-commerce industry. It provides merchants with a platform and all the tools necessary to operate online stores. In Q2 2021, Shopify surpassed Amazon in terms of monthly customer traffic for the first time. With a strong list of enterprise customers and a growing list of partnerships behind it, Shopify could continue to grow strongly over the coming decade.
This stock has been a reliable source of growth
There are very few stocks on the TSX that have been able to consistently beat the market by a wide margin for over a decade. Constellation Software (TSX:CSU) is an example of one of these rare companies. Since its IPO in 2006, Constellation Software stock has grown at a CAGR of about 35%. Over the past year, this stock has generated a return of 34%. This means that the stock has continued to beat the market by a wide margin, even after 16 years.
Constellation Software is able to do this thanks to its proven formula for identifying businesses for acquisition. According to its website, Constellation Software looks for companies with an outstanding manager, consistent profitability, and above-average growth. Of course, there’s more that goes into it, and investors can get an idea of what the company looks for in its older President’s Letters. However, Mark Leonard, Constellation Software’s president, has stopped writing those annual letters in hopes of discouraging copycat companies.
This suggests that the company is still committed to growth and desires to stay a step ahead of its competitors. Despite being an established company, Constellation Software still has a long growth runway ahead.
A blue-chip stock that could beat the market
Investors hoping to stick to blue-chip companies can still find a lot of growth by investing in a stock like Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM). With a portfolio of assets worth about $625 billion, Brookfield is one of the largest alternative asset management firms in the world. Through its subsidiaries, it has exposure to the real estate, infrastructure, utility, and private equity markets.
In mid-2021, Brookfield announced that it would be partnering with Tesla to develop a large-scale sustainable neighbourhood. If this project is successful, that could be a major catalyst for Brookfield stock. This is one blue-chip stock that investors should hold in their TFSA.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Jed Lloren owns Shopify and Tesla. The Motley Fool owns and recommends Shopify. The Motley Fool recommends Amazon, Brookfield Asset Management Inc. CL.A LV, Constellation Software, and Tesla.