Best RRSP Investments for 2021

Finding the best RRSP investment for your needs doesn’t have to be a challenge. A RRSP, or Registered Retirement Savings Plan, is an account designed by the government of Canada to help you save and invest for retirement.

It is unique in that it provides two tax-efficient ways to save and invest.

Everything you earn in the account grows tax-free. The growth from transaction to transaction will not be taxed until withdrawal. That means you have more money at work

Your contributions are also tax-deductible which means you can put the money back in the RRSP to have extra money at work to build wealth.

Also, take a moment to see if your employer has a matching contribution plan as it can significantly accelerate the growth.

Also, note that there are contribution limits and other rules when it comes to withdrawal if you are not familiar with the details as well as deposit such as RRSP over-contribution.

The Canada Revenue Agency has all the rules and details.

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Best RRSP Investment for 2021

An RRSP account can hold a variety of investment products. Depending on your timeline, and risk appetite, there are various options. Seniors don’t invest the same way as young adults for example.

A 60-year-old senior would be looking at a safe withdrawal or income strategy to complement the CCP payments and OAS payments. Whereas, a younger millennial with a 30+ years investment horizon can opt for a more aggressive strategy.

While there are popular approaches touted in various investing literature for a RRSP, with the low interest rates environment we have today, you have to be in equities to have your money work.

Savings account don’t pay and GIC don’t pay either. In fact, you are behind inflation so it doesn’t help you at all. Bonds have also dropped significantly and many have seen capital decline.

The question you want to answer is which equities should you settle for.

Index Investing for the Hands Off Investors

If you want to keep it simple and not stress over individual stock fluctuation, index investing is the way to go.

Index ETFs are the best option and there are many options from various companies. The two major companies are Vanguard and iShare from BlackRock.

What you get is a market average return. For Canadians, please buy US S&P500 index or total stock market index. Our Canadian economy is small and not very diversified.

Some discount brokers offer free ETF transactions too. With Questrade for example, you get to buy ETFs for free and you have a sell transaction fee only.

Individual Stock Investing

Even retirees have stocks these days. For capital preservation and decent income, retirees will tend to have bank stocks, utility stocks and telecom stocks. These 3 industries are core to the economy.

For wealth building during the accumulation years, you want stocks with growth potential and that usually mean a low dividend yield or none at all if you think of Shopify or Lightspeed POS.

SHOP and LSPD are what I call millionaire makers. You invest a small amount and let it ride. Valuation is usually high due to growth and you can’t compare numbers with a bank for example.

Here are 3 Canadian RRSP investments you can invest in for growth.

Canadian National Railway

CNR - Canadian National Railway Canadian National Railway is a leading transportation and logistics company in North America. The company owns the only transcontinental railway line in North America and provides intermodal, trucking, freight forwarding, warehousing and distribution services.

As North America’s leading supply chain player, Canadian National Railway carries more than 300 million tons of cargo annually. It is a fully integrated rail and transportation services company and is the top mover of aluminum, iron ore and base metal ore in North America.

Canadian National handles over 50% of all Canadian chemicals production and services the three major petrochemical centers in North America. Its product portfolio is well diversified with intermodal accounting for 25% of revenues, followed by petroleum & chemicals, and grains & fertilizers each at 17%. Forest products, metal, minerals, automotives, etc. constitute the remainder.

Key Investment Data


Intact Financial

IFC - Intact Financial Intact Financial Corporation is the largest provider of property and casualty insurance in Canada and a leading provider of specialty insurance in North America. The company’s popularity can be gauged from the fact that about one in every five Canadians is a customer of Intact Financial products and services.

The company enjoys a 17% share in the P&C insurance market in Canada. In terms of business segments, personal and auto accounts for nearly 40% of DPW (direct premium written), followed by personal property (20%), commercial lines Canada (25%) and commercial lines USA (15%).

About 85% of the company’s revenue is derived from Canada and the remaining 15% is from the U.S. The company operates through Intact insurance, BrokerLink, OneBeacon and Belairdirect banners.

Key Investment Data


Alimentation Couche-Tard

ATD.B - Alimentation Couche-Tard Inc. Alimentation Couche-Tard is one of the largest Canadian companies and the owner of several Canadian convenience stores. The company also supplies road transportation fuel to approximately 1,300 locations in the U.S. and offers stationary energy and aviation fuel.

As a leading independent convenience store operator, Couche-Tard owns a network of nearly 10,000 convenience stores in 48 states in the U.S., ten provinces in Canada, as well as other countries.

It operates more than 16,000 stores worldwide. By geography, the US is its largest market accounting for 67% of 2018 revenues, followed by Europe (20%) and Canada (13%). The company operates through Couche-Tard and Mac’s brands in Canada and Circle K globally.

Investment Data

DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.