This Simple TFSA Move Could Protect You in 2026

A TFSA (Tax-Free Savings Account) only protects you if what’s inside it works for you. In a choppy 2026 market, holding cash feels safe but earns nothing. Real protection means owning assets that generate income and compound over time, regardless of what headlines are doing.

The practical move is straightforward: replace a speculative holding with a proven compounder that pays a growing dividend. When you get quarterly income deposited into your account, selling in a panic becomes less tempting. That income also gives you the ability to buy more shares when prices fall.

The most underrated part of this approach is the discipline it creates. Choosing one core holding and committing to it for a full year, unless the fundamentals genuinely change, removes the temptation to overtrade.

Add a dividend-reinvestment plan on top of that, and compounding quietly works in the background, turning volatility into an advantage rather than a threat.

Here’s the move: swap one of your speculative TFSA holdings for Brookfield Infrastructure Partners (TSX:BIP.UN), and let it do the heavy lifting. The infrastructure giant pays you a rising distribution, compounds capital across five continents, and keeps its balance sheet tight,  precisely what you want when markets get unpredictable.

Why the TSX dividend stock belongs in your TFSA

During market turbulence, the instinct for most people is to pile into cash or stay frozen. But cash doesn’t compound. And if you’re sitting in a TFSA, you’re wasting one of the most powerful tax shelters in Canada.

A better approach is to anchor your TFSA around a business that earns reliable, growing cash flows no matter what the economy does. And Brookfield Infrastructure Partners is that business.

BIP owns a diversified portfolio of cash-generating assets, including toll roads, railways, gas pipelines, fibre networks, and data centres, spread across the U.S., Canada, Brazil, India, Australia, and Europe.

In 2025, BIP reported a funds from operations of US$2.6 billion, up 10% year over year. And the board of directors just approved a 6% increase in the dividend distribution for 2026, bringing the annualized payout to US$1.82 per unit. That marks the 17th consecutive year of distribution increases of at least 5%.

In 2025, BIP recycled a record US$3.1 billion in assets in 2025 and ended the year with US$6 billion in liquidity. That cash is already being redeployed into data centers, AI infrastructure, and energy assets with long-term contracts attached.

CEO Sam Pollock said the company develops new data centres at yields of 9-10% and monetizes them at cap rates between 5.5% and 6%, generating 300 to 400 basis points of development profit. With 70% leverage, those equity returns pencil out to the high teens or better.

BIP is an artificial intelligence infrastructure story tied to some of the world’s largest and most creditworthy technology companies.

Is BIP stock undervalued?

BIP operates roughly 21,000 kilometres of railway track, 15,000 kilometres of natural gas transmission pipelines, 140 data centres, and over 300,000 telecom towers globally. That breadth makes it less vulnerable to any single sector downturn.

Analysts tracking the TSX stock forecast adjusted FFO to increase from US$2.48 per share in 2025 to US$3.62 per share in 2028. In this period, the annual dividend per share is projected to increase from US$1.82 to US$2.10.

If the TSX dividend stock is priced at 12 times forward FFO, it could gain 20% over the next two years. If we adjust for dividend reinvestments, cumulative returns could be closer to 30%.

The post This Simple TFSA Move Could Protect You in 2026 appeared first on The Motley Fool Canada.

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More reading

• The Best Dividend Stocks to Buy and Hold Forever
• 1 Single Stock That I’d Hold Forever in a TFSA
• Top Stocks to Double Up on Right Now
• A Canadian Dividend Stock I’d Hold Through Anything
• 3 Canadian Stocks Perfectly Positioned for the Infrastructure Boom

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.