In archery, to shoot a moving target, you don’t shoot the arrow where the target is now but where it will be later. The stock market is like a moving target. To make a fortune 10 years from now, don’t invest in stocks that are popular today. Invest in stocks that could become popular 10 years later. That’s a lot of guesswork, but you can make an educated guess by understanding the market conditions and a company’s growth pace.
Where to invest $10,000 now to earn a fortune 10 years later
Here are four stocks working on a long-term secular trend that could change the future.
Tech stocks on the road to growth
The 2022 tech stock meltdown has removed inflated prices of the pandemic and brought some growth stocks at attractive valuations. Nvidia (NASDAQ:NVDA) is a popular name in the chip industry, known for its advanced graphics processing units (GPUs). The stock plunged as much as 60% this year, as crypto miners flooded the market with second-hand GPUs after the crypto bubble burst. But it is quickly picking up the pieces as its next-gen GPU hits the market.
Nvidia stock has already jumped 40% in a month and could surge another 80% to its March level as the market recovers. Nvidia’s GPUs are shaping the future of next-gen artificial intelligence (AI), autonomous vehicles (AVs), and 5G network infrastructure. This stock can recover to its previous high and make new highs through 2030.
While Nvidia is riding the hardware growth, Nuvei (TSX:NVEI) is riding the global payments platform growth. Nuvei is a mid-cap stock that debuted in the TSX during the tech bubble. Hence, when the bubble burst, the stock returned to its initial public offering (IPO) price. The Nuvei platform facilitates more than 570 alternate payment methods like cards, payment gateways, and crypto.
Its fate is tied to the economy’s gross domestic product (GDP). The more transactions that happen through the platform, the more money it earns per transaction. Nuvei is well placed to benefit from the popularity of financial services, e-commerce, and online and social gaming.
When all tech companies are slashing their guidance and cutting jobs, Nuvei increased its 2022 guidance and hired 66 new team members. It revised its 2022 adjusted earnings before interest, taxes, depreciation, and amortization guidance to $346 million from $342 million at the midpoint.
The Nasdaq ETF
The tech stock meltdown has changed the Nasdaq landscape. Netflix and Meta are losing value, while Microsoft and Amazon are gaining. iShares NASDAQ 100 Index ETF (CAD-Hedged) (TSX:XQQ) gives you exposure to the next phase of Nasdaq at less than $90 a unit. This exchange-traded fund (ETF) can give you 50% growth in one year if you buy at the dip and triple your money in 10 years. How?
The ETF will benefit from artificial intelligence, autonomous vehicles, electric vehicles (EV), cloud networking, e-commerce, and crypto trends. Every future tech stock trades on Nasdaq. If it is among the top 100 stocks, the ETF holds it. The ETF makes it easy for Canadians to access the Nasdaq.
All tech and no other sector can put your fortune in jeopardy. The pandemic is a warning of why you should not have too much exposure in only one sector. Diversifying your portfolio into growth stocks of other sectors can help you mitigate the risk of bubbles. Magna International (TSX:MG) is my pick in the automotive sector. It stands to benefit from the EV revolution.
The stock is down 27%, as a chip supply shortage, rising commodity (lithium) prices, and the energy crisis created supply constraints. The chip supply constraints are easing, giving Magna the space to complete the orders. More automakers are electrifying, and Magna is their trusted partner. The unfolding of short-term challenges already pushed the stock up 21% in a month. There is more rally to this stock. So, if you own it, hold it. If you don’t own Magna stock, buy it before it is too late.
The evergreen stock
Amid growth and momentum, don’t forget to balance your portfolio with an evergreen stock like Enbridge that can pay you dividends in market highs and lows.