For decades, the stock market’s average annual return has been close to 10%. That sounds pretty good! (Of course, over short periods of time, it could be much more, or less, on average.) For most investors, much if not most of their moolah is invested in one or more simple It makes sense to put your money in an index fund with low fees. As one that tracks the S&P 500.
Even Warren Buffett recommends index funds to most people, and index funds are all you need to get rich.
Missing the scoop in the morning? Breakfast News brings you everything in a quick, silly, free daily newsletter. Sign up for free »
Image source: Getty Images.
But what if you want to aim for higher returns? What if you want to read books on investing and get better at researching companies? What if you want to choose individual growth stocks to invest in? Well, here are some portfolio candidates to consider.
Any list of promising growth stocks would seem incomplete without Nvidia. (NASDAQ:NVDA)because it was a phenomenal performer. As I type this, its value has tripled in the past year, with an average increase of 75% per year over the past 10 years. While this breakneck pace of growth is unlikely to continue as the company grows even larger, there is still plenty of potential for future growth, and surprisingly, the stock is probably still reasonably valued, with recent Stock prices are rising with an eye on the future. -The company’s P/E ratio was 34 times, lower than the five-year average of 41 times.
Nvidia is a dominant player in the semiconductor space. Once known primarily as a gaming chip maker, the company is now also focusing on data centers, which need more chips to support the boom in artificial intelligence (AI) technology.
paypal (NASDAQ:PYPL) is also a growth stock to consider. The company also boasts an attractive valuation, with a forward P/E ratio of 18, below the five-year average of 21. You’re probably familiar with the fintech company’s PayPal service, which facilitates digital financial transactions. But there’s more to PayPal than that. PayPal is also home to companies like Venmo, Braintree, Paidy, Hyperwallet, and Zettle.
These days, it boasts 426 million active customer and merchant accounts and 25 billion annual transactions. Third-quarter revenue increased 6% year-over-year, and payments grew 9%. PayPal’s growth has slowed recently, especially when it comes to acquiring new customers. We’re rolling out new features like FastLane and Cash Pass rewards programs, and expanding our buy now, pay later capabilities.
the story continues
While great future performance isn’t guaranteed, it’s certainly a possibility, as the company aims to improve growth and margins, revising upward its forecasts. Let’s take a closer look at PayPal and see what you think. You can also buy now, buy part of a position, or add the company to your watchlist.
Shopify (NYSE:Shop) works behind the scenes and is known for providing a platform that helps people “achieve independence by making it easy to start, run, and grow a business,” specifically e-commerce businesses. It also has a solid return of nearly 50% so far this year, with an average annual return of more than 25% over the past five years.
Shopify’s third quarter was impressive, with Chief Financial Officer Jeff Hofmeister saying, “Shopify delivered 26% revenue growth and 19% free cash flow margin in the quarter, leading to a Excluding this, it was the sixth consecutive quarter of revenue growth of more than 25%.” The company also recently formed a strategic partnership with PayPal.
The stock is also attractively priced, with its recent forward P/E ratio of 56x, well below the five-year average of 142x. ).
Finally, what we are introducing here is not exactly a common stock. Exchange-traded funds (ETFs) are funds that trade like stocks. Therefore, you can buy stocks from a good brokerage firm. Vanguard Information Technology ETF (NYSEMKT: VGT) is a powerful ETF that gives you easy access to over 300 stocks, each of which is high-tech in some way. Its top holdings include some of the “Magnificent Seven” stocks such as Microsoft, Apple, and Nvidia.
If you’re not interested yet, consider its performance. The average annual increase over the past five years was 23.5%. The average annual growth rates for the past 10 and 15 years were 21% and 19%, respectively. As of this writing, it’s up nearly 33% since the beginning of the year. ETFs don’t always deliver such amazing returns. As always, when the market goes into recession, ETFs take a hit. But if you’re bullish on the technology sector’s long-term potential, consider adding shares of this high-performing ETF to your long-term portfolio.
Also, keep in mind that if you don’t feel comfortable picking stocks yourself and are worried that the Vanguard ETF will be too volatile, you can do just fine with a simple S&P 500 index fund.
Have you ever felt like you missed out on buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our team of expert analysts will issue a “Double Down” stock recommendation on a company we think is about to crash. If you’re already worried that you’re missing out on an investment opportunity, now is the best time to buy before it’s too late. And the numbers speak for themselves.
NVIDIA:If you invested $1,000 when it doubled in 2009;That’s $369,349!*
Apple: If you invested $1,000 when it doubled in 2008, you’d get $45,990. *
Netflix: If you invested $1,000 when it doubled in 2004, you would have earned $504,097. *
We currently have “double down” alerts on three great companies, and we may not see an opportunity like this again anytime soon.
See 3 “Double Down” stocks »
*Stock Advisor returns as of December 9, 2024
Selena Maranjian has held positions at Apple, Microsoft, Nvidia, PayPal, and Shopify. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, PayPal, and Shopify. The Motley Fool recommends the following options: Long January 2026 $395 calls on Microsoft, long January 2027 $42.50 calls on PayPal, short December 2024 $70 calls on PayPal, and January 2026 calls on Microsoft. This is a $405 short call. The Motley Fool has a disclosure policy.
4 Bright Growth Stocks to Buy Now and Hold Long-term — Including Nvidia Originally posted by The Motley Fool
