Three Tech Stocks for Beginners to Add to Your TFSA Account and Enjoy Years of Growth


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Beginning Tax-Free Savings Account (TFSA) investors have an ugly road ahead of them, with the U.S. Federal Reserve likely to keep raising interest rates. As rates soar, the relief bout of relief in tech could prove short-lived. In any case, I still think there’s value to be had in the high-multiple growth names for investors willing to stick it out.

Battered tech stocks won’t recover overnight. Nobody knows if recent relief will end in tears. Regardless, new investors should be focusing on building wealth over the next 12 years, rather than the next 12 months or weeks.

The following tech stocks, I believe, offer a great risk/reward scenario for those willing to brave the volatility en route to better long-term rewards.

mazon

It’s hard to be an investor when you’ve got big-name folks on the Street calling for blood. American e-commerce giant Amazon (NASDAQ:AMZN) has already lost more than half of its value from peak to trough. The company overinvested in capacity, weighing on margins ahead of what appears to be a recession-driven retail sales slump. Despite macro headwinds, the effect of higher rates, and poorly timed investments, I believe Amazon will come through.

Chief Executive Officer Andy Jassy took the reins from Jeff Bezos at a questionable time. In any case, I think investors should cut the man some slack, as he looks to steer the behemoth through a long overdue storm. Even as big tech trims away at expenditures, don’t expect Amazon to curb its innovation. Its “Buy with Prime” service will likely put it on a collision course with e-commerce firms catering to smaller-scale merchants.

Over the next few years, look for Amazon to keep Canadian tech titan Shopify (TSX:SHOP) on its toes.

Shopify

Shopify has done a great job of thriving in a scene that’s been dominated by Amazon. Still, Shopify can’t afford to fall asleep at the wheel, especially in a recessionary environment. With deep pockets, Amazon is a firm that can and likely will continue to use innovation to pressure its peers en route to gaining larger market share.

Like Amazon, Shopify stock has been in a world of pain amid the tech selloff. The stock crashed more than 80% at its worst. Though shares have been climbing higher in recent months, it’s unclear as to what the future holds for a disruptive innovator that could face greater competition from Amazon.

Amazon may have economies of scale and network effects working on its side, but Shopify still has innovation in its veins. Tobias Lütke will not go down without a fight. Though the growth roadmap could be bumpy, I think investors can have faith in Lütke and his team. This isn’t the first time they’ll face profound economic pressures, and it won’t be the last.

Finally, Shopify’s slowly increasing its total addressable market with every acquisition and organic innovation it makes. Shopify’s payments business, in particular, could help jolt growth come the next bull market.

Block

Block (NYSE:SQ), formerly Square, is a payments giant that, like Shopify, lost more than 80% from peak to trough. As the forward-thinking fintech innovator looks to the future of finance, there’s a lot of potential growth to be had.

The company has been investing in cryptocurrency projects, which may or may not open a new door to growth over the next decade. Given recent action in crypto markets, it seems like investors doubt Block’s crypto efforts will amount to much — not with rates rising and crypto winters setting in.

The main reason to own Block, though, is Cash App. The U.S. payments app is going strong and serves as a solid foundation for future growth. At 2.5 times price to sales, you’re getting a lot for your TFSA investment dollar.

The post Beginning Investors: 3 Tech Stocks to Put in Your TFSA for Years of Growth appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Amazon?

Before you consider Amazon, you’ll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in March 2023… and Amazon wasn’t on the list.

The online investing service they’ve run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 22 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks * Returns as of 3/7/23

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More reading

Want $1 Million in Retirement? Invest $50,000 in These 3 Stocks and Wait a DecadeIs Now the Right Time to Buy Shopify Stock? 2 Canadian Stocks Prepped to Have a Big Year Shopify Stock: Is 2023 Finally the Year to Buy (Back) in? Is Shopify Stock a Buy in March 2023?

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Joey Frenette has positions in Amazon.com. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Amazon.com. The Motley Fool has a disclosure policy.

https://www.fool.ca/2023/03/09/beginning-investors-3-tech-stocks-to-put-in-your-tfsa-for-years-of-growth/

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