Business & Investment

TFSA Investors: Bet on 2021 Economic Recovery

Finally there is light at the end of the tunnel. Most developed countries are deploying vaccines. In other words, the global economy could recover sharply in 2021. Fortunately, Canadian investors can bet an additional $ 6,000 on this recovery. Duty Free Savings Account (TFSA)..

The best ways to achieve this recovery and protect your potential interests from taxes are:

Economic recovery

Travel, energy use, manufacturing and consumption all fell during the blockade. Almost every country was in recession and this lack of demand was reflected in the commodity sector.

As the global economy resumes, factories and manufacturing plants will resume production, and consumers will need to resume consumption at pre-crisis levels. This means that demand for essential raw materials such as copper, silver, lithium and nickel could surge in 2021.

As the world’s gross domestic product expanded, metal prices skyrocketed. This year, investors are hoping that government stimulus will drive GDP growth to unprecedented levels. actually, Morgan Stanley We forecast strong global GDP growth of 6.4% in 2021.

Fortunately, Canada’s metal mining sector is well-positioned to benefit from this backlash. Listed mining stocks should be listed on the TFSA radar this year.Perhaps most notable are the Toronto-based mining giants. Landin mining (TSX: LUN)..

Top TFSA stock

Rundin Is a diverse base metal company that continues to offer tremendous investment opportunities. Inventories have increased by more than 40% over the past year, benefiting from a solid product pricing environment.

Mining stocks are ideal for investors looking for exposure in the copper mining industry, where higher commodity prices are mandated. Copper fundamentals are strong and Lundin Mining needs to participate in the 2021 impressive earnings report.

Rundin is not a pure copper play. Due to the diverse nature of the mining business, any downside risk is well covered. The company generates more than one-third of its revenue from other metals. Similarly, the business of the company is geographical. Investors need to expect impressive returns from rising zinc and nickel prices.

Dividend yield

Income-focused investors need to have something to back with Lundin Mining when most companies are cutting dividends to save capital. The company still pays impressive dividend yields.

Lundin paid a dividend yield of 1.4% and is expected to grow by about 50% in the next quarter. Future dividend increases should provide decent income for investors seeking long-term income growth.

Price earnings ratio (P / E) is currently trading at 40, but a 40% positive rise could explain the high valuation. Lundin is a pure payout play and is expected to pay a decent payout for rising commodity prices.

Conclusion

The mining sector is often overlooked, but it is essential to the global economy. The economic recovery should be reflected in increased demand for raw materials, which will ultimately benefit Canadian mining stocks.

That’s why strong dividend growth stocks like Lundin Mining in 2021 get the attention of the TFSA portfolio.

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TFSA Investors: Bet on 2021 Economic Recovery

https://www.fool.ca/2021/01/12/tfsa-investors-bet-on-a-2021-economic-recovery/ TFSA Investors: Bet on 2021 Economic Recovery

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