No investment strategy suits all the people all the time. This is particularly true for young investors in their 20s and 30s. Youth not only has social advantages; it can provide significant margin for your portfolio to grow. As such, high-growth stocks are ideal for the young-adult, millennial demographic.
After talks with portfolio managers at Lumentrades, they agree that they apply the Pareto principle for 20 or 30-somethings. Colloquially known as the 80-20 rule, advisors recommend that young investors have 80% of their portfolio in stocks, and the remainder in safer, interest-yielding assets. When it comes to millennial stock allocation, spring chickens should really consider high-growth stocks.
Time is money, and in many cases, time is more valuable. That’s because time can “buy” you money, but never the opposite way around. In this case, a younger investor’s additional working years can help mitigate investments that have gone awry.
With that in mind, here are the top 5 high-growth stocks for young investors.
1. AMAZON (AMZN)
Amazon is on the verge of “unprecedented greatness.” more so with inventions like Alexa. Those of you who are in your 20s and 30s have some recollection of a time when e-commerce didn’t overwhelmingly dominate the retail sector. But we’re so close to a generation coming of age that has no clue about the prior brick-and-mortar hegemony.
When Generation Z enters the workforce en masse, they will buy through Amazon and other e-commerce channels, no question. That’s why even at nearly $2,000 a pop, you must consider AMZN stock.
2. CARVANA (CVNA)
Enter Carvana. They combine the tech-wizardry that young people love with a centuries-old retail industry. Rather than negotiate with pushy or unsavory salespeople, buyers can instead browse cars online. When they find one they like, CVNA delivers their vehicle to their driveway. Carvana also offers a moneyback guarantee to soothe concerns about purchase.
Considering that young people do nearly everything online, Carvana is likely the future of car buying. That’s one reason to buy CVNA stock. The other? Once the company firmly establishes itself, it has the potential to earn serious bucks. That’s because CVNA charges a premium for its convenient services.
Part of the volatility in its stocks is the old fashioned feel of haggling prices when buying a car. So far though, customers are willing to pay it, and that trend will continue with Gen Z coming aboard.
3. TriNet Group (TNET)
In large scale companies like Fortune 500s there is need for an effective HR management.TNET provides full-service HR for companies that are still in their growth phase including Lumentrades. Essentially an outsourced HR firm, TNET offers comprehensive services for smaller organizations, but without the massive overhead. Therefore, management can concentrate their resources on their expansion strategies.
TNET stock also makes sense from an industry trend point-of-view. Experts predict that by the year 2020, an astounding half of the U.S. workforce could be comprised of freelancers. Additionally, small businesses that employ fewer than 100 workers are not only becoming more prominent, they’re hiring millions annually including Lumentrades.
This new digital economy will require HR services. As a result, you’ll want to keep a close eye on TNET stock.
4. Square (SQ)
Given the nature of technology in our lives, companies today value agility and specialization more so than outright size.
Just like TriNet, what makes SQ a compelling investment is that it evens the playing field for small businesses. Square provides portable credit-card readers that attach conveniently to your smartphone. That enables entities ranging from sole proprietors to small corporations to quickly setup a payment platform.
Another factor driving SQ stock for the longer term? An increasing number of Americans are going cashless. According to a CNBC report late-last year, 50% of surveyed individuals reported they only carry cash half of the time they’re out and about. Those that do carry cash usually hold $50 or less.
Hence, the types of businesses that would have once been cash only will likely gravitate towards Square’s unique and convenient solution. Despite SQ stock skyrocketing in the markets, it still has significantly more potential.
5. Control4 (CTRL)CTRL will likely gain on broader social trends, making it a strong pick for young investors. In the past 3 months it has jumped over 47% in the markets.
Control4 specializes in home-automation solutions, providing clients with interconnectivity benefits along with security. Given that anything can happen these days, people love the peace of mind of having an integrated smart-home system.
But beyond the practicality that Control4’s products and services provide, its target audience is extremely receptive to the company’s offerings. Experts forecast that by the year 2020, home automation will become a $40 billion industry. Further, 47% of millennials own smart-home products. And 81% of prospective homebuyers are likely to select a home that has installed automation services.
This therefore makes CTRL most definitely a high growth stock.
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