Prep Your TFSA to Avoid Big Losses in 2022

Consider investing in these two stocks in your TFSA to offset some of the losses that might happen in 2022 due to market volatility.

| More on:

The Tax-Free Savings Account (TFSA) is an excellent investment vehicle for Canadian investors with a wide range of financial goals. TFSA investing can come in handy for long-term savings to create a secondary retirement fund. You can use the tax-advantaged account to create a tax-free and passive income stream with the right investments.

2022 has started off on a shaky note. The world seems to be moving into a post-pandemic era as global COVID-19 cases begin to slow down. However, Russia’s invasion of Ukraine on February 24, 2022, has made things problematic again. Coupled with interest rate hikes due to rising inflation, rising geopolitical tensions are injecting more instability in the stock market.

The uncertainty plaguing global markets will most likely seep into investment returns. Now might be the right time to take measures to offset some of the losses you might face this year. Businesses that boast strong operations and the potential to deliver consistent growth in the quarters ahead might make for solid investments.

If you have available contribution room in your TFSA, you could use assets like these to enjoy more of your investment returns due to the account’s tax-advantaged status.

Today, I will discuss two TSX stocks that could boost your TFSA balance and help you mitigate some of the losses you might incur this year.

Cargojet

Cargojet Inc. (TSX:CJT) is Canada’s leading air cargo provider. The $2.61 billion market capitalization company headquartered in Mississauga reported a net income of $102 million in the December-ending quarter. This was a massive increase compared to its net income for the same quarter in fiscal 2020. The airline’s total revenues for 2021 rose by 13.4% compared to the previous year.

While commercial flights declined amid the pandemic, business has been booming for air cargo providers like Cargojet Inc. The company now has a larger base of business to bolster its massive size even further in a post-pandemic era. COVID-19 accelerated the demand for e-commerce, boosting revenues for Cargojet. The coming months and years could see much more improvement for the air freight provider, translating to more capital gains for its investors.

Verde Agritech

Verde Agritech PLC (TSX:NPK) is a more affordable asset to consider for your TFSA. The $407.32 million market capitalization company is headquartered in the UK, but listed on the TSX. Verde Agritech produces and sells fertilizers, and its business primarily serves the Brazilian market. While its fourth-quarter earnings report for fiscal 2021 is yet to be released, its Q3 earnings offer a clear picture of its impressive performance.

Compared to the same period the year before, the company’s revenues increased by 142.3% to hit $16.85 million during the first three quarters of fiscal 2021. The company’s net profits rose by 121.6%, and its gross profits climbed by 185.1% in the same period. The company’s management is committed to delivering exponential growth in the coming years, and it appears to be well-positioned to deliver on that promise.

Foolish takeaway

Businesses that can thrive in the foreseeable future could be valuable additions to your TFSA portfolio. Today’s challenging environment in global markets may result in some adversity for Cargojet stock and Verde Agritech stock. However, both companies are well-positioned to provide outsized returns through capital gains due to the strength of their operations and potential demand for their services.

If you have some contribution room available in your TFSA, it might be a good time to allocate some of the space to shares of these two TSX stocks.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns and recommends CARGOJET INC.

More on Stocks for Beginners

up arrow on wooden blocks
Tech Stocks

The 3 Smartest Tech Stocks to Buy With $500 Right Now

Tech stocks can be seen as a bit risky, but these three have far less risk and more stability for…

Read more »

shopper buys items in bulk
Dividend Stocks

Where to Invest $7,000 in November

This consumer staples company provides consistent stock performance alongside a dividend.

Read more »

A worker gives a business presentation.
Stocks for Beginners

Is TMX Group Stock a Buy, Sell, or Hold for 2025?

There are a lot of items to consider when looking at TMX Group as an investment. Today, let's get into…

Read more »

man shops in a drugstore
Stocks for Beginners

3 Consumer Stocks That Canadians Need to Watch in November

Consumer staple stocks could turn these stocks even higher with the holidays coming up.

Read more »

a sign flashes global stock data
Stocks for Beginners

Safe Canadian Stocks to Buy Now and Hold During Market Volatility

Adding these two safe Canadian stocks to your portfolio now could make your portfolio more stable despite short-term market volatility.

Read more »

shopper chooses vegetables at grocery store
Dividend Stocks

Is Loblaw Stock a Buy for Its 1.2% Dividend Yield?

Loblaw stock may not have the highest dividend yield out there, but what does that really mean to today's investor?

Read more »

cloud computing
Tech Stocks

Best Stock to Buy Right Now: Manulife vs CIBC

Want the best stocks? These two are certainly the best options. But which is the better buy?

Read more »

construction workers talk on the job site
Energy Stocks

Best Stock to Buy Right Now: Baytex vs Suncor?

Suncor and Baytex stocks both look like solid companies offering growth and dividends. But which is the better buy?

Read more »