February 23, 2024
Do you want $1 million in retirement? Invest $50,000 in These 3 Stocks and Wait a Decade The Motley Fool


“All you need is a few good ideas. And when you’ve got some good ideas, you have to act aggressively. That’s the Munger System.”-Charlie Munger

Boom! $150,000 suddenly appears in your pocket.

What would you do? buy a new car? Go on the vacation of a lifetime? Renovate your home?

If I found myself in such a hypothetical scenario, I know what I would do: I would follow Charlie Munger’s advice and invest it all — maybe $50,000 each in three stocks. Maybe it would be something like this:

A jar full of dollars on the table.

Image Source: Getty Images.

1. Visa

is the first visa (V 0.24%), the world’s largest payment-processing company.

Note that I called Visa a payment-processing company rather than a credit card company. This is because Visa does not issue credit or debit cards. In fact, contrary to popular belief, Visa does not offer credit, set rates or charge fees to customers. Instead, Visa partners with financial institutions such as banks and credit unions by offering access to Visa-branded payment networks (for a fee).

This is an important distinction, because Visa has no credit risk. This also means that the company’s revenue is largely tied to the volume of payments and transactions on its network.

At any rate, Visa’s no-nonsense business model has delivered extraordinary shareholder returns. Over the past decade, Visa’s stock has generated an annual total return (price appreciation plus dividend payments) of 18.4%.

V Total Return Level Chart

V Total Return Level data by YCharts

That means $50,000 invested in Visa 10 years ago would be worth $271,000 today – not too shabby. However, I have my eye on some spicy options as well.

2. CrowdStrike

Next is a young, fast-growing company. Its CrowdStrike (CRWD 1.95%), a leader in AI-powered cybersecurity solutions. While I value Visa for its continued growth, CrowdStrike is based entirely on prospects.

The company grew revenue at 35% year-over-year in its most recent quarter (the three months ending October 31, 2023). Furthermore, the overall cybersecurity market that CrowdStrike aims to satisfy is rapidly growing.

In short, this is because cyber crime is increasing rapidly. Hackers – looking for money, political retribution, or anarchy – are running rampant right now. Large organizations, from large-cap corporations to governments and non-profit organizations, are all struggling to secure their networks, strengthen their security, and safeguard their data.

Notably, some analysts expect the cybersecurity market to grow 50% to $274 billion by 2028 – presenting a significant opportunity for cybersecurity companies like CrowdStrike.

At any rate, CrowdStrike stock has rewarded investors since its debut in 2019. Its total return since then is more than 423%, or about 43% annually.

In other words, $50,000 invested in CrowdStrike’s initial public offering (IPO) on June 12, 2019 would be worth $260,000 at the time of this writing.

CRWD Total Return Level Chart

CRWD Total Return Level data by YCharts

That’s an impressive return, and if CrowdStrike shares grow at that rate over the next decade, my hypothetical portfolio would be on track to hit $1 million.

However, I still have to make a final selection.

3. Nvidia

At last, we arrive NVIDIA (NVDA 3.58%). In my opinion, no other stock can match Nvidia’s combination of real results and potential.

As far as the results go, they are clear to see. meta platform, Microsoft, Amazon, Tesla, and many others are buying up all the Nvidia AI chips they can get. And yet, the demand seems insatiable as the world can’t get enough of artificial intelligence (AI).

For his part, Nvidia Chief Executive Officer (CEO) Jensen Huang put it this way: “For the first time, because of generative AI, computer technology is going to impact virtually every single industry and every single country.”

So, given the huge demand for AI chips, it should come as no surprise that Nvidia has been one of the best stocks of the last 10 years.

In fact, a $50,000 investment in Nvidia shares 10 years ago would be worth $9.2 million at the time of this writing.

NVDA Total Return Level Chart

NVDA Total Return Level data by YCharts

It’s hard to believe that similar returns are possible for Nvidia shares over the next 10 years, but no one really knows.

One thing is certain: the world is desperate for more AI products, which means more AI chips. Nvidia is currently the market leader, but others also compete amd And intel, want to catch. Additionally, some big tech names like Alphabet And Apple Given the lucrative nature of the market, many are developing their own AI chips.

Still, Nvidia is well-positioned to benefit from increased AI demand for several years. And that’s why it gets the last spot in my fantasy portfolio.

Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Mark Zuckerberg, CEO of Meta Platform, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of The Motley Fool’s board of directors. Suzanne Frey, an Alphabet executive, is a member of The Motley Fool’s board of directors. Jake Lerch has positions in Alphabet, Amazon, CrowdStrike, Nvidia, Tesla, and Visa. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, CrowdStrike, Meta Platform, Microsoft, Nvidia, Tesla, and Visa. The Motley Fool recommends Intel and recommends the following options: long $57.50 calls on Intel for January 2023, long $45 calls on Intel for January 2025, and short $47 calls on Intel for February 2024. The Motley Fool has a disclosure policy.

Source: www.fool.com

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