You can make a fortune next year, even if the stock market falls in value. The trick is to pick the right companies to trust your money with.
The three stocks below are ideal investments for the year ahead.
Bet on the future
The world always changes. Sometimes for the better, other times for the worse. Whatever happens, there will always be stocks that benefit from the shift.
Consider Brookfield Renewable (TSX: BEP.UN)(NYSE: BEP). As its name suggests, Brookfield owns renewable energy assets spanning wind, solar, and hydro.
Brookfield is one of the largest investors in the space, but there’s plenty of room for everyone. The previous five years saw $1.5 trillion in capital deployed into renewable energy infrastructure. Over the next five years, that figure is expected to balloon to $5 trillion, growing even further from there.
A rising tide lifts all boats, and Brookfield stock is primed to take advantage.
Buy this cash flow machine
Constellation Software (TSX: CSU) isn’t a household name. Most investors have never heard of it. That’s a shame given that shares have risen 90 times in value since 2006.
For most of its history, Constellation was a growth machine. It acquired niche software businesses at a discount, plugging the acquisition into its broader portfolio of offerings. Nearly every quarter, the company spends millions to buy more competitors. This acquisition spree fueled the decade-long growth trajectory.
Now valued at $35 billion, don’t expect this stock to grow as fast as the past. That’s okay, as it’s about to transition from a growth machine to a cash flow machine.
“Once a software product is created, there may be routine updates, but the creation costs are already realized,” I recently explained. “Customers may continue to pay for a product years after you paid to create it. And because distribution costs are low, cash flow levels are immense.”
Now armed with a massive portfolio of software solutions, spanning hundreds of products and dozens of industries, Constellation is set to pile up the cash. The company recently instituted its first dividend, signalling the transition. Expect share buybacks and dividend hikes to ensue.
This stock can double your money
If you want to double your money in 2021, your best bet could be Brookfield Property (TSX: BPY.UN)(NASDAQ:BPY).
Shares trade at a 50% discount due to the COVID-19 crisis, but if a vaccine pushes the world to return to normal next year, this stock should rebound quickly.
It’s not hard to connect the dots here. Brookfield owns office and retail real estate. The work from home movement crushed the office segment, while shutdowns and contagion fears slammed retail revenue. It’s been a terrible year to own these properties, but 2021 should provide much-needed relief.
Just remember that patience will be needed with this stock. Yes there is lucrative upside, but we can’t be sure about the timing. Will tenants return en masse in early 2021, in anticipation of new vaccines, or after the vaccines are already distributed?
No one knows the answer to these questions, but betting early makes sure you lock-in the upside.
