What a difference 17 months can make. In March 2020, during the first wave of the coronavirus pandemic, the S&P 500 benchmark fell 34% in about a month. It was by far the fastest decrease of at least 30% in its history. However, it took less than 17 months for this widely used index to double in value from its low on March 23, 2020. That’s the power of buy-and-hold investing in action.
No matter how close the S&P 500 and other related indices are to new all-time highs, it is always a good time to invest money in the market as long as your investment horizon is measured in years.
However, if you have a healthy $ 10,000 cash on investments that aren’t needed to pay bills or cover emergency supplies, these five stocks would be perfect to buy now.
If you invest a significant portion of your capital in the market, FAANG stocks have been a wise choice in the past. In particular, Alphabet (NASDAQ: GoogL) (NASDAQ: Goog), the parent company of Google and YouTube, would be a perfect match.
The simple reason Alphabet continues to outperform is because of its veritable global monopoly on internet search. According to GlobalStats, Google’s share of global internet search ranged from a low of 91.4% to a high of 93% during the two-year test phase through July 2021. As a clear one-stop shop for searches, advertisers are willing to pay for the premium placement on Google.
Also, it doesn’t hurt that Alphabet’s ad-driven business is benefiting from the disproportionately long time the global economy spends expanding compared to shrinking. While Alphabet will make its way through inevitable recessions, they are significantly shorter than the multi-year periods of expansion that shareholders enjoy.
If you need another good reason to jump on the alphabet bandwagon, keep in mind that its side activities are growing even faster than the core internet search segment. YouTube advertising revenue has skyrocketed, and the company’s cloud infrastructure service platform, Google Cloud, is growing nearly 50% year over year and has an annual sales rate of $ 18.5 billion.
U.S. marijuana stocks are another perfect place to put your money in the market now. In particular, the multistate operator (MSO) Trulieve Cannabis (OTC: TCNNF) has all the attributes of a successful investment.
While most MSOs have tried to build a presence in as many big dollar markets as possible, Trulieve Cannabis is taking a fairly unique approach to its expansion. In mid-August, the company had 97 pharmacies open nationwide and was present in seven states. However, 88 of the 97 operational retail locations are in Florida, which is approved for medical marijuana.
With the Sunshine State absolutely saturated with its stores, Trulieve was able to effectively build its brand without breaking the bank on marketing expenses. As a result, it has been profitable for 14 consecutive quarters (3.5 years).
But don’t think for a moment that Trulieve doesn’t think beyond Florida. It is also in the process of acquiring MSO Harvest Health & Recreation (OTC: HRVSF) as part of the largest U.S. cannabis deal ever. Harvest Health is focused on five states, one of which happens to be Florida.
But in addition to further solidifying its presence in the Sunshine State, Trulieve will gain access to Harvest’s 15 pharmacies in Arizona that legalized the recreational pot last November. This will give Trulieve a leading position in two major markets and will significantly expand its profit potential.
Vertex Pharmaceuticals (NASDAQ: VRTX) biotech stock offers investors another perfect opportunity to invest $ 10,000 over the long term.
While the vast majority of biotech stocks are still looking for their first blockbuster drug, Vertex has developed a long line of very successful therapies. Its claim to fame goes back to several generations of treatments that it has developed to treat cystic fibrosis (CF), a genetic condition characterized by thick production of mucus that can block the lungs and pancreas.
In 2019, Vertex’s latest generation of CF treatment, Trikafta combination therapy, was approved by the US Food and Drug Administration (FDA). This approval was granted five months prior to the scheduled FDA review date. Trikafta targets the most common CF mutation and has annual sales of $ 5 billion based on Q2 sales. The company’s CF drug franchise is well shielded from the competition.
Vertex also floats in cash. The company had just over $ 6.7 billion in cash, cash equivalents and marketable securities as of June 30. This capital will help fund ongoing in-house studies for nearly a dozen unique compounds, and it could be used to drive acquisitions to increase his source of income.
Perfect stocks to buy come in all sizes. The high-growth small-cap company Lovesac (NASDAQ: LOVE) would be another smart way to put your capital to work.
Furniture stocks are usually the opposite of growth opportunities. Because the furniture industry is more stationary and relies almost exclusively on pedestrian traffic. But that’s not the case with Lovesac, which has leveraged innovation and its omnichannel presence to maintain double-digit growth and break into profitability two years ahead of Wall Street’s expectations.
Lovesac furniture is a big differentiator. The company’s Sactionals – modular sectional sofas that account for almost 85% of total sales – can be adapted to any living space in a variety of ways. Additionally, there are around 200 different cover options consumers can purchase that are almost certain to go with the decor or theme of a home. After all, the yarn used in these covers is made entirely from recycled plastic water bottles. That’s a great choice, functionality, and ESG investment in one product.
Lovesac’s success is also a function of increasing online sales during the pandemic. As a company that was initially supposed to operate with lower overheads, the pandemic forced Lovesac to work even leaner – and it worked. With multiple ways to sell its products, Lovesac has no limits.
In case you missed it the first time, FAANG shares are a smart way to get $ 10,000 public. The last perfect stock to buy right now is Amazon (NASDAQ: AMZN).
As most people probably know, Amazon is the kingpin when it comes to e-commerce. Approximately $ 0.40 of every US dollar spent online this year is routed through Amazon’s marketplace. This dominance has helped the company attract 200 million people worldwide for Prime membership. With retail margins generally low, Amazon has relied on its tens of billion dollar subscription fee income to offset retail margin weakness and undercut prices for brick and mortar retailers.
Far more impressive are Amazon’s fast-growing ancillary businesses. Amazon Web Services (AWS) controls nearly a third of the cloud infrastructure market, with subscription services and advertising also far exceeding the growth potential of the Amazon marketplace. Since AWS offers significantly higher margins than online retailing, it will be primarily responsible for more than doubling Amazon’s operating cash flow by the middle of the decade.
If Amazon were valued at its historical price-to-cash flow multiple by 2025, it could be $ 10,000 per share.
This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.