Ever since the new president came into the Oval Office, the US has applied a series of tariffs on other countries, and they have responded in kind. The resulting trade tensions have rattled stock markets worldwide. Understandably, many investors have been shaken up by the market volatility. However, seasoned investors with a long investment horizon know there is an opportunity amid this chaos.
After a 90-day pause on tariffs for most other countries, Donald Trump effectively triggered an uptick that added to the volatility. Some investors might’ve been waiting on the sidelines, trying to time the bottom. However, I feel there’s a better approach to consider if you’re a long-term investor.
You might have missed the market bottoming out, but you can unlock plenty of growth potential in your self-directed investment portfolio. If you have a hypothetical $10,000 ready to invest, here are two growth stocks I would suggest allocating the capital to and maximizing your returns for the next few years and beyond.
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Invest in the future of energy
The top energy stocks are no longer limited to traditional oil and gas companies. Green energy is the future of the industry, and investing in renewable energy stocks can be a terrific approach to unlocking long-term wealth growth. If you’re investing in this field, it is better to go for the best renewable energy stocks. To this end, it does not get better than with Brookfield Renewable Partners (TSX: BEP.UN) stock.
Brookfield Renewable is a $19.8 billion market-cap globally diversified clean energy company. Backed by one of the world’s largest asset management companies, it has a massive portfolio of renewable energy assets worldwide. It has roughly 46,200 megawatts (MW) of existing operating capacity and around 200,100 MWs in a solid development pipeline. This is the strongest bet you can make if you’re bullish about the clean energy space.
As of this writing, it trades for $29.86 per share and pays investors quarterly distributions at a juicy 7.2% annualized dividend yield. Consider locking in the high-yielding dividends to earn extra cash while awaiting the long-term capital gains.
Invest in undervalued growth
Borrowing power is scarce in harsh economic environments. People who don’t qualify for loans to finance their expenses or purchase homes from traditional lenders look for alternatives. To this end, goeasy Ltd. (TSX: GSY) is easily one of the best avenues these non-prime lenders can explore. Due to its easyhome and easyfinancial operations, it is one of the most consistent performers to consider adding to your self-directed portfolio if you’re considering the lending market.
The $2.6 billion market capitalization company provides financial services to help borrowers buy furniture, electronics, computers, appliances, and much more. It also offers unsecured installment loans for customers, generating most of its revenue through its easyfinancial business segment. The lender’s scalable business model generates revenue, has a high customer retention rate, and serves a niche market with little competition. While there’s a greater risk of higher loan default rates in the short term, the temporary headwinds can make way for better times ahead.
As of this writing, goeasy stock trades for $155.30 per share and pays its investors their quarterly distributions at a 3.8% annualized dividend yield.
Foolish takeaway
Studying market trends to identify long-term winners is one of the best ways to make the most of your money in the stock market and grow your wealth. However, even the most high-potential investments carry a degree of risk. Stock market investing is inherently risky, especially during harsh economic environments.
Identifying and investing in companies with strong fundamentals, growth potential, and the kind of business models that can weather short-term volatility to emerge stronger on the other side is a good strategy. To this end, Brookfield Renewable Partners stock and goeasy stock look well-positioned to be solid holdings for your portfolio.
If you are thinking of investing $10,000 in the stock market, these two can be excellent choices to allocate at least some of that capital.
