If you want to achieve financial independence as quickly as possible, then it’s imperative that you invest in growth stocks. However, if you choose to go down this road, then it’s important that you understand that growth stocks can be more volatile. It’s common to see many growth stocks underperform. However, investors hope that the stocks that do well will greatly outweigh the losers. Over time, investors shouldn’t be surprised to see a diversified growth portfolio become more concentrated towards its winners.
In this article, I’ll discuss two growth stocks that investors should consider starting a portfolio with. Both companies lead their respective industries and have very bright futures.
A leader within the growing e-commerce industry
If the COVID-19 pandemic has made one thing clear, it’s that the e-commerce industry was greatly underappreciated in previous years. In fact, in 2019, e-commerce sales only accounted for about 4% of the entire Canadian retail industry. By April 2020, online sales jumped to an astonishing 11% of all Canadian retail sales. However, even at 11%, the e-commerce industry remains very underrepresented in Canada compared to other developed countries in the world. As such, I believe this industry has a lot of room for growth.
Shopify (TSX:SHOP)(NYSE:SHOP) is a company that has helped increase e-commerce penetration around the world. The company provides merchants of all sizes with a platform and all the tools necessary to operate online stores. Although Shopify is already Canada’s largest company by market cap, I believe the stock still has a long growth runway ahead.
There are two ways that Shopify can grow. First, it can continue widening its reach within the retail space. Shopify can do this by acquiring new merchants and expanding its partnership network to reach more customers. In 2021, Shopify announced that Netflix had opened an online store using Shopify’s platform and that it had added Spotify to its ever-growing partnership network. Shopify can also grow by selling more expensive subscription services to its merchants as they achieve success and grow their businesses.
Shopify is a leading player in an important and emerging industry. It also has a business that is very easy to understand. Shopify’s an easy pick for a growth portfolio today.
Employees could be working remotely fore the foreseeable future
When the COVID-19 pandemic first hit, governments around the world forced businesses to lockdown. This resulted in millions of employees being forced to work from home. As a result, businesses have had to find a way to accommodate this new paradigm. Luckily, there are many software solutions available that can allow businesses to operate remotely. With respect to employee training, Docebo (TSX:DCBO)(NASDAQ:DCBO) stands out from its peers.
Docebo provides a cloud-based and AI-powered eLearning platform to enterprises. Using its platform, managers can assign, monitor, and modify employee training programs more easily. As of its latest earnings report, more than 2,600 businesses rely on Docebo’s platform. The likes of which include large-cap companies such as Amazon and Thomson Reuters.
The COVID-19 pandemic doesn’t appear to be disappearing anytime soon. In fact, new lockdown conditions were just announced in Ontario. More businesses may turn towards Docebo’s platform before we see the end of the pandemic.