Investors may fear that they missed the boat when it comes to getting rich quick during the last year. Sure, we all wish we could have bought up in bulk during the market crash in March 2020 — especially if we think we could’ve reached a million dollars by now. But it’s easy to see why you didn’t. Fear can cause you not to see clearly. But you know what else can? Greed.
That means you may wait around for a market crash or correction that simply isn’t going to happen! True, there are economists out there predicting another market crash. That would, theoretically, give you another opportunity to buy up the stocks you’ve been watching.
But what if a crash doesn’t happen for another decade, as what happened after the Great Recession? That means you would miss out on an opportunity to buy many stocks that are still undervalued since the March market crash.
Pick a great stock
So, that’s why investors need to do two things: pick solid stocks that are great no matter what happens in the market and hold onto them long term. If you don’t like a company’s business model for the long haul, I wouldn’t recommend buying it. You might see large returns, sure, but you might not. So, if you really want to get to a million dollars, buy the stocks you know will continue doing well.
Let’s look at what is going to do well now and well into the future. If you want to hit on some momentum, I would look at the tech industry — specifically, the Software-as-a-Service (SaaS) sector. This is where huge growth will continue to happen in the years ahead. While tech stocks did well last year, there are still many that are undervalued in my opinion — especially those that will keep cash flow coming in even during a market crash.
That’s why I would recommend digging into Open Text (TSX:OTEX)(NASDAQ:OTEX). The company is the perfect choice if you’re looking to make huge returns. The stock already has one thing ahead of most other tech stocks: time. It’s been around for decades, which you simply cannot find easily in the tech sector. But this data security manager has been around for over 20 years!
In that time, shares of Open Text have risen 2,235% as of writing! That’s a compound annual growth rate (CAGR) of 14.92% — solid returns for any stock. In fact, if you had bought $22,000 in shares back in 2011, you would have $1 million today!
Many might wonder if the company has peaked, but no. Open Text continues to make household-name partnerships on a regular basis. What’s even better is the company hasn’t even really brought in revenue from these partnerships yet, which include such names as Alphabet. Even still, revenue continues to climb up and up, most recently at a year-over-year increase of 12%.
Shares are trading below all-time highs, and to me, that means it’s undervalued. If you want to make $1 million in another decade, you have to go with a stock that can get you there in a high-growth industry and stick to it long term. That has to be a company like Open Text.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. David Gardner owns shares of Alphabet (A shares) and Alphabet (C shares). Tom Gardner owns shares of Alphabet (A shares) and Alphabet (C shares). The Motley Fool owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). The Motley Fool recommends Open Text and OPEN TEXT CORP.