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Money Should You Buy Stocks With Your 2018 TFSA Contribution or Wait for a Crash?

21:43  09 january  2018
21:43  09 january  2018 Source:   fool.com

Why a TFSA is a great way to sock it away for a rainy day

  Why a TFSA is a great way to sock it away for a rainy day It’s a new year and that means you have a new Tax-Free Savings Account (TFSA) contribution limit. For 2018 it’sNFLX

Tax - Free Savings Accounts ( TFSAs ) were first introduced in Canada in 2009. That means things like interest payments, stock dividends or capital gains. Your financial provider will likely alert you if you hit your TFSA limit for a single account.

Determine how much contribution room you have in your Tax - Free Savings Account ( TFSA ). You do not need to have earned income to contribute to a TFSA . As the account holder you are the only person who can do the following with your TFSA

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It’s the million-dollar question: With markets hitting all-time highs in Canada and in most places around the globe, is it safe to keep buying stocks at these levels? Or is it better to wait for the much-anticipated market crash?

Quotes in the article

Cenovus Energy Inc

CVE

TFSA Investors: Don’t Let This Sale on Defensive Dividend Stocks Pass You by

  TFSA Investors: Don’t Let This Sale on Defensive Dividend Stocks Pass You by TFSA Investors: Don’t Let This Sale on Defensive Dividend Stocks Pass You byWhile it’s tempting to follow the herd and go all-in on high-growth, cyclical names, it’s times like these when you should actually be ensuring that you’re not becoming complacent with your bets. Sure, 2017 was likely a phenomenal year for your portfolio, but when the party comes to an end, and yes, it will eventually end, you’re likely going to kick yourself for neglecting the defensive portion of your portfolio, especially if you’re a retiree or a soon-to-be retiree.

A Tax - Free Savings Account ( TFSA ) lets you save more with a mix of investments – and your money grows tax free . Buy shares of investment funds that trade on the stock exchange, with lower fees. A TFSA can be a great solution when you ’re investing for a goal that’s one to three years away.

Tax - free savings account ( TFSA ) was introduced in Canada in 2009 with a limit of ,000 per year, indexed for subsequent years. In this case, Jane can replace 0 and wait until the beginning of 2018 to re- contribute In effect, the Tax - Free Savings Account contribution room is made up of

10.40
+0.33
+3.28%
Crescent Point Energy Corp

CPG

8.47
+0.36
+4.44%
S&P/TSX Composite

0000

16,344.96
+27.31
+0.17%
S&P/TSX Venture Composite

ISPVX

923.91
+2.87
+0.31%

The next crash is coming. It’s inevitable. Nobody knows when it’s going to happen, but with the old age of the current bull market, many pessimists are thinking it’s going to be soon, but here’s why I don’t buy these doomsday predictions.

First of all, many doomsdayers have been calling a market crash pretty much every year. At the beginning of 2017, everyone was afraid that the bull market was showing its age, but the S&P 500 went on to gain ~20%. Talk about being completely wrong! Instead of a Trump crash, which everyone was worried about, a Trump rally happened, and it’s still going strong into 2018. What happened to all the doomsdayers?

How seniors can use TFSAs to have more in retirement

  How seniors can use TFSAs to have more in retirement Since TFSAs were only introduced in 2009, most retirees have their money in RRSPs. But TFSAs could be a major boonThe key is to maximize both contributions and growth no matter how old you are, which means holding proper growth investments (equities) instead of fixed-income instruments that pay a pittance.

What should you be putting in your TFSA ? If you ’re a young investor with a long-term time horizon, your best bet would be to own high-quality stocks with top-tier So, without further ado, here are two undervalued growth names you should think about buying with your TFSA contribution for 2018 .

Whats your TFSA contribution limit? If you 've managed your account well and made some large withdrawals you may have more room than you think. Your Verification Email Has Been Sent. Check your email for a link to reset your password. Sign in.

Consider long-time bear Prem Watsa, who turned bullish over a year ago following Donald Trump’s presidential victory. It was a surprising move that caught the general public off guard, but it was a smart move for Watsa to eliminate many of his hedges, otherwise Fairfax Financial Holdings Inc.(TSX:FFH) would be in much worse shape today, and the press would have started to compare him to Bill Ackman, a seasoned veteran who just clocked in his third straight year of losses.

So, are all the bears turning into bulls?

Not necessarily. Although we’re in the late stages of a bull run, Trump’s pro-growth agenda is going to boost the U.S. economy and, in turn, global financial markets in the foreseeable future, and you probably don’t want to remain completely on the sidelines! That doesn’t mean that you should rule out a mild near-term correction though, so it’s a good idea for the average investor to have some skin in the game with ample cash on the sidelines, just in case.

Is part-time teacher on track to retire in 9 years?

  Is part-time teacher on track to retire in 9 years? Sarah can do it, with a strategy that balances real estate with investmentsRight now, Sarah earns $55,000 annually—$50,000 annually from her teaching job and another $5,000 in income from her side jobs. Her assets total $775,000 with her largest being her $675,000 condo in Toronto. She’s a few months away from being mortgage free and hopes to put the $8,000 or so annually that she’s paying on her mortgage towards savings in 2018. Carrying costs and maintenance on her condo—including property taxes, insurance and maintenance come to about $9,000 annually.

A TFSA is a very flexible savings and investing option, but many Canadians are unsure how it works. This article will take you through the basics. If you ’re a young investor, you ’re likely hoping to pay down your student loans, plan for a wedding, or save for a down payment on your first home.

Canadian adults can contribute another ,500 to their tax free savings accounts in 2018 . Are you looking for a stock ? To find your contribution allowance, check your 2016 tax return statement from the Canada Revenue Agency or your personal CRA account.

It’s never a good idea to time the markets, so instead of trying to predict where the markets are headed, just focus on individual stocks and try and find ones that are on sale. It’s been difficult to spot value in the U.S. after such a fantastic 2017, so you may wish to stay within the confines of Canada while you do your bargain hunting.

There are several opportunities in the severely undervalued energy sector, including Cenovus Energy Inc.(TSX:CVE)(NYSE:CVE) and Crescent Point Energy Corp.(TSX:CPG)(NYSE:CPG) that are trading at significant discounts to their intrinsic value. But if you’re still wary of the state of the markets, and you want to play defence, you may wish to load up on Fairfax. Although Watsa has a more bullish tone, the preservation of capital is his number one concern, and Fairfax still has protection from substantial market downside in the event of a violent market-wide pullback.

Bottom line

Timing the market is a bad idea. If you choose to wait for a crash before entering the markets, you could miss out on years of major gains. Conversely, if you go all-in on stocks without a cash position, you’ll kick yourself should the markets crash this year.

How can I use my extra RRSP room when I retire?

  How can I use my extra RRSP room when I retire? You can’t use up next year’s room this year, but there are ways to put that room to workFor example, could I contribute an additional $26,000 to my RRSP in January 2019, have it be a deduction off of my 2018 income, and still be within my 2019 contribution limit?

Should I wait to invest my money when the stock market drops or goes into a recession? I stopped trading on that day. In fact waited for 10–12 days for a little settlement in the market. As a smart investor, you should see every market crash as a buying opportunity-an opportunity to pick up great

A Tax - Free Savings Account ( TFSA ) lets you save more with a mix of investments – and your money grows tax free . 1. the entire excess amount is withdrawn; or 2. for eligible individuals, when the entire excess amount is absorbed by the addition of your unused TFSA contribution room for a later year.

A great strategy for investors who are just getting started is to be in stocks, but just make sure you’ve got enough cash to capitalize on sales that come after a crash.

Stay hungry. Stay Foolish.

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Fool contributor Joey Frenette has no position in any of the stocks mentioned. Fairfax is a recommendation of Stock Advisor Canada.

5 Top Canadian Dividend Stocks to Build a TFSA Retirement Fund .
Canadian National Railway Company (TSX:CNR)(NYSE:CNI) and four other stocks are a good start to build your TFSA retirement fund.One popular strategy involves holding dividend-growth stocks inside a TFSA and using the distributions to purchase new shares. This takes advantage of a powerful compounding process that can turn a modest initial investment into a nice nest egg over the course of two or three decades.

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