SStock market crashes, double-digit corrections and periods of heightened volatility are more common than you probably realize. Nevertheless, patience pays off for long-term investors. Since 1980, the reference S&P500 averaged an annual total return, including dividend payments, of 11%. That’s good enough to double your money with dividend reinvestment in about 6.5 years.
The key to making money on Wall Street is identifying game-changing trends and buying into those long-term trends. If you have $10,000 in cash, which won’t be needed for emergencies or to pay bills, that’s more than enough to subscribe to five of the most unstoppable trends of the moment.
One of the surest double-digit growth opportunities over the next decade is cybersecurity.
As companies have moved their presence online and into the cloud, the responsibility to protect company and customer data increasingly falls on third-party vendors. Additionally, with data hacking attempts becoming increasingly sophisticated and effective, cybersecurity has effectively become a staple service for businesses of all sizes, regardless of how the economy performs.
For example, we’ve seen business demand skyrocket for a specialist in cloud-based identity verification solutions Okta (NASDAQ:OKTA). Okta’s identity solutions are cloud-native and powered by artificial intelligence (AI). In English, that means its platform is getting smarter to identify and respond to threats all the time. Because Okta’s platform is built in the cloud, its response time and effectiveness in dealing with threats is often far more impressive than on-premises security solutions. The overall cost to keep hackers at bay tends to be cheaper with cloud-based third-party providers than on-premises security options.
Although investors will pay a pretty penny to buy cybersecurity stocks, their long-term future looks incredibly bright.
If you live in one of the 36 states that have legalized marijuana to some degree, you probably don’t need me to tell you that cannabis is booming in the United States. New Frontier Data estimated that average annual sales growth through 2025 will be 21%, ultimately leading to $41.5 billion in sales by mid-decade.
Notice I don’t mention Canadian pot stocks in this discussion? The simple reason is that we don’t know if or when the US federal government will change its position on marijuana. Without removing pot from the controlled substances list, Canadian weed stocks are stuck in the face of the regulatory disaster known as the Canadian marijuana market. In other words, marijuana stocks in the United States are where you want to consider putting your money to work.
A good example here would be the multistate operator Cresco Laboratories (OTC: CRLBF). Once all of Cresco’s acquisitions are complete, it will have about three dozen dispensaries in operation and enough licenses in its back pocket to open another dozen outlets.
More importantly, Cresco is one of the few companies to hold a cannabis distribution license in California. Even though wholesale cannabis produces lower margins compared to the retail side of the equation, just operating in the largest weed market in the world makes that a moot point. Cresco can place potted products in nearly 600 dispensaries statewide, which will allow it to bank.
Another absolutely unstoppable trend you can invest $10,000 in right now is fintech, meaning companies involved in financial technology products or services, such as digital or peer-to-peer payments. . According to a report by MarketDataForecast.com, the global fintech market may grow north of 22% per year between 2020 and 2025.
Why fintech? The most compelling answer is that they can speed up payment processing and settlement, especially when crossing borders. Fintech services are also key to reducing payment transaction costs. It’s no secret why we’ve seen money center banks push the use of mobile and digital banking. And finally, fintech can help level the playing field in underbanked regions of the world by providing underbanked people with access to traditional financial services.
Square (NYSE:SQ) is the perfect example of a company that embodies both traditional payments and revolutionary financial services technology. For one thing, Square’s seller ecosystem processes credit card payments on its network through point-of-sale solutions provided to its merchants. Last year, more than $112 billion in gross payment volume passed through its network.
On the other hand, Square’s peer-to-peer digital payment platform Cash App sounds like a revolutionary service. It allows users to pay merchants, transfer to and from traditional bank accounts, and invest their money. This includes buying the world’s most popular cryptocurrency, Bitcoin.
Take care of an animal
Even though it’s the slowest growing of the five unstoppable trends, pet care is the one I’m most confident will continue to grow no matter what happens with the US economy. and global.
Data from the American Pet Products Association shows that pet ownership has increased from 56% of all US households in 1988 to 67% of all US households by 2019-2020. Plus, year-over-year spending on pets hasn’t gone down in at least a quarter century. This year, an estimated $109.6 billion will be spent on pets in the United States, with $44.1 billion allocated to food and treats and $32.3 billion to veterinary care and medical care. product sales.
A good example of a business that should thrive on increased spending on pets is the insurer Trupanion (NASDAQ: TRUP). It ended in March with nearly 944,000 total registered pets, many of which are part of its high-margin subscription business. The craziest thing is that 944,000 pets only represents a penetration rate of about 1% in the United States. If Trupanion were to achieve the 25% pet insurance penetration rate seen in the UK, its addressable market would be over $32 billion.
Additionally, Trupanion has been building relationships at the clinical level for two decades, and it is the only major pet insurer to offer software to manage payment at the time of payment.
Finally, telehealth exhibits all the characteristics of a transformative and high-growth trend in health care.
I know what you’re probably thinking, and you’re right: the pandemic has absolutely helped companies focus on telemedicine. But it’s important to recognize that telehealth grew at an exceptionally rapid pace in the years leading up to the pandemic, and will continue to do so afterward as well. Indeed, virtual visit platforms are more convenient for patients, they can help doctors better monitor patients with chronic conditions, and they are billed at a cheaper rate than in-office visits, which insurers will love.
The name in telehealth to own is Teladoc Health (NYSE: TDOC). Teladoc handled 10.59 million virtual visits in 2020 and is on track to oversee a median estimate of 13 million visits this year. That’s up from 4.14 million in 2019. Teladoc averaged 74% sales growth per year in the six years before the pandemic, and it’s likely to be one of the healthcare stocks to fastest growing large cap of this decade.
Also, keep in mind that Teladoc acquired applied health signals company Livongo Health in Q4 2020. Livongo uses AI to send advice and nudges to patients with chronic conditions to help them lead a healthier life. It was profitable on a recurring basis when acquired and roughly doubled its membership base every year.
10 stocks we like better than Square
When investment geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they’ve been putting out for over a decade, Motley Fool Equity Advisortripled the market.*
David and Tom just revealed what they think are the ten best stocks investors can buy right now…and Square wasn’t one of them! That’s right – they think these 10 stocks are even better buys.
View all 10 stocks
* Portfolio Advisor Returns as of May 11, 2021
Sean Williams owns shares of Square and Teladoc Health. The Motley Fool holds stock and recommends Bitcoin, Cresco Labs Inc., Okta, Square, Teladoc Health, and Trupanion. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.