Growth is a never-ending reality. Humans keep growing and evolving to make lives better. Even in investing, you look at the growth of your stocks. But how can you be sure the stock you choose will grow in the future? Nobody can predict the future with certainty. You increase the probability of making your portfolio outperform the market. Just place your money in more than one good stock that shows good growth potential.
Stocks with long-term growth potential
A simple and effective investment strategy is to invest in future technology trends. You invest in future technology before it scales up. The world is currently undergoing a technology revolution. Technology is growing at a rapid speed. You may laugh watching an early 2000s movie where they used button phones and GPS gave wrong directions.
Don’t you feel, if time travel were possible, you might go back and tell your young self to buy Apple or Amazon or Google stock? Until time travel becomes a possibility, a logical way would be to invest in future tech trends.
Around 10-15 years from now, autonomous vehicle (AV), the internet of things (IoT), 5G, and maybe even cryptocurrency could be a part of your everyday life. It’s no fun investing in tech when it has already become normal. Take $2,000 from your income and invest in these three long-term growth stocks.
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I don’t know about flying cars, but self-driving cars are something closer to reality. Google, Uber, and many other companies are testing AVs. Imagine the possibilities AVs will open up. All those long-haul logistic trucks and the forklifts in warehouses will do the job while you rest.
Picking the company that will take the lead in AVs is difficult to say. Maybe you invest in Uber, and Google’s Waymo takes the market share. You can avoid this risk with Magna International (TSX:MG)(NYSE:MGA).
Magna is not an automotive company, nor a tech company. But it is the friendly neighbourhood auto component supplier that is also a contract auto manufacturer. This means Waymo, Fisker, and Sony design AVs and Magna manufactures them. Magna is also wanting to build Apple’s future AV. It is not only eyeing the manufacturing and supply contract but has also invested in some of these companies.
No matter who holds the AV crown, Magna will reap the benefit of being the king’s right hand. The stock is in a long-term uptrend. It has already surged 31% year to date and still has a long way to grow.
Another tech trend is 5G, and telecom firms are among the many beneficiaries. BCE (TSX:BCE)(NYSE:BCE) is Canada’s largest telecom company and is investing aggressively in expanding its 5G footprint. It was 4G that made video calling, watching videos on phones, and your AI assistant a reality. To give you a hint of what 5G can do, the AVs we talked about will only be possible with 5G. For AVs to go commercial, it has to communicate with the nearby vehicle, traffic signal, and real-time maps. Even a five-second lag can prove to be disastrous.
The 4G revolution began in 2010, and in 10 years BCE stock surged 125%. The dividend increased at an average annual rate of 6.4%. And 5G is a much bigger opportunity than 4G. You can only take a wild guess of what lies for BCE in the current decade.
I know cryptocurrency is a frenzy. Some call it a scam, and some call it the future global currency. But it has made an impression on everyone from the governments, regulators, hedge funds, the top brass to the average middle class. If crypto really is the future, there is no harm parking just 2% of your portfolio in Hive Blockchain Technologies (TSXV:HIVE).
Hive is one of the oldest crypto mining stocks trading on TSX. It has data centre farms in cold countries like Canada and Sweden. At these farms, it runs computing power from renewable energy to mine Bitcoin and Ethereum. Maybe it will someday mine Dogecoin and other coins as well.
Invest in the future to get returns in future.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Puja Tayal has no position in any of the stocks mentioned. David Gardner owns shares of Alphabet (A shares), Alphabet (C shares), Amazon, and Apple. Tom Gardner owns shares of Alphabet (A shares) and Alphabet (C shares). The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Apple. The Motley Fool recommends Magna Int’l and Uber Technologies and recommends the following options: long January 2022 $1920 calls on Amazon, short March 2023 $130 calls on Apple, short January 2022 $1940 calls on Amazon, and long March 2023 $120 calls on Apple.