Yahoo Finance How to Invest Your $7,000 TFSA Contribution in 2024
Written by Amy Legate-Wolfe at The Motley Fool Canada
Back in January, Canadians were given more Tax-Free Savings Account (TFSA) contribution room. This added $7,000 for investors to put to work. But if you haven’t used it yet, I don’t blame you.
The market is slowly but surely improving, but isn’t there quite yet. Even still, now could be an excellent time to put that $7,000 to work. Though there are some points to consider first. So, let’s get into them.
No one size fits all
There are many options when it comes to investing, and that’s a good thing! You can find the options that fit exactly what you need as well as what you’re comfortable with. First off, you’ll want to decide whether you have a lower or higher risk tolerance. Lower risk would mean you need the money in perhaps fewer than five years. Higher risk means you’re looking at over 10 years.
Then there are the investment options. If you’re lower risk, you may want to invest more in Guaranteed Investment Certificates (GIC) as well as high-interest savings accounts. If you have higher risk, or have a base that is lower, you may want to expand further. This might include stocks, exchange-traded funds (ETF), or mutual funds.
Bottom line: make sure you have a diversified set of assets across the board. You can have stocks, ETFs, GICs, as well as bonds and even some cash, too, that are all aligned with your risk tolerance and goals. Furthermore, make sure to pay attention to any fees that could be weighing you down.
Sectors to consider
So, let’s say you’re more on the higher-risk side, looking for growth options for the next decade or so. There are certainly some areas that analysts believe have a strong future.
One area is technology, with innovation continuing to grow in the coming years. This includes companies that develop computer hardware and software as well as internet-related services.
The healthcare sector is another area expected to see long-term growth, driven by an aging population and more demand for new medical treatments. This might include pharmaceuticals, medical devices, and simply more healthcare services.
Clean energy is another area to look, so you can gain ground in the growing industry focusing on renewable energy sources. Then, there are emerging markets. Here you can gain access to more global diversification, getting in on the process of countries developing their economies. Particularly, Asia is poised for significant growth in the coming years.
Options to consider
There are a few companies that tick all these boxes! One is Andlauer Healthcare Group (TSX:AND). This company wedges into the tech and healthcare field. It operates in healthcare transportation and logistics, using technology to optimize delivery routes and ensure efficient distribution of medical supplies and pharmaceuticals.
Among clean energy, consider a stock such as Northland Power (TSX:NPI). The company offers monthly dividends with a yield at 5.15% as of writing. Meanwhile, it holds a diversified set of sustainable infrastructure projects. These offer long-term partnerships and commitments to environmental sustainability.
Finally, in emerging markets, investors may want to consider Southeast Asia. The area boasts several fast-growing economies, including Vietnam, Indonesia, and the Philippines. Analysts, in particular, like the young populations, increasing urbanization, and growing middle class. In this case, Vanguard FTSE Developed Asia Pacific All Cap Index ETF (TSX:VA) might be a solid option for more growth. Altogether, this company could provide some solid growth over the next decade and beyond.
The post How to Invest Your $7,000 TFSA Contribution in 2024 appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Andlauer Healthcare Group. The Motley Fool has a disclosure policy.
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