Home » Investing » 2 Millionaire-Maker Stocks Set to Make More
A “curse” of high-growth stocks, especially the ones that have been growing at a strong pace for years, is that investors start thinking that maybe it has run out of steam.
Adam is a value investor who is always on the hunt for fantastic undervalued companies that he can share with Motley Fool readers. He follows Warren Buffett and Charlie Munger's investment advice and has completed the Canadian Securities Course. When he's not investing, Adam can usually be found traveling or skiing.
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All growth stocks can be millionaire-maker stocks, given enough time, consistency of growth, and the amount of capital you are investing. All these “ingredients” have to be in the right proportion to make a millionaire-maker portfolio.
These proportions are different for each stock. Some high-growth stocks can make you a millionaire within a decade with just $50,000 capital, while others may require 30 years to achieve that.
The problem with a longer timeline is that it increases the level of uncertainty. The longer you project, the more unknown variables there might be, and they can push the actual performance away from your projected ones.
Then, there is also the fear that a high-growth stock may have run the course of its growth and may stabilize instead of growing. However, one stock that has defied this expectation for decades and another that’s regaining its traction on the road to growth might help you add solid growth to your portfolio.
A tech giant
Tech stocksare well-known for rapid growth, but when it comes to long-term consistency, they do not score as well. That’s especially true if you start measuring in terms of decades instead of years. However, there are a few exceptions to this phenomenon, and Constellation Software (TSX:CSU) is easily the most noticeable one.
This tech giant has been growing steadily since its inception in 2006, and its value has appreciated over 20,000% over that period. This is exceptional even for a tech stock, which tends to be the most aggressive grower in the TSX.
Realistically speaking, that’s not a practical benchmark to set your growth projections upon, but its current growth pace is quite exceptional as well. It rose by about 289% in the last five years, and if you throw the dividends in the mix, the overall growth for the period is over 340%. So, even this slowed-down version of its former growth is enough for compelling portfolio growth.
A financial company
goeasy (TSX:GSY) is an alternative financial company that offers non-prime loans to people who, because of their weak credit rating/score, do not qualify for personal loans from conventional banks. That wasn’t the financial product the company started with, and the original business model was built around lease-to-own products, but it was the product that gave the company a solid boost.
Its footprint (400 locations) and the number of customers it has catered to are comparable to a small bank and large credit unions. As a stock, it has rewarded its investors with both rapid growth (albeit a bit inconsistently) and generous dividends. The overall growth, if we look at just the last 10 years, has been quite impressive. The stock rose almost 880%, and with dividends, the returns rose to over 1,150%.
The stock is currently reeling from a correction phase and has risen almost 50% in the last four months. If it keeps growing at this pace or accelerates to its pre-pandemic growth phase, it can offer solid returns in the coming years.
We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if goeasy made the list!
Foolish takeaway
It’s difficult to predict how long the current bull marketphase of the two stocks will last. But for now, there are no signs indicating that the growth will slow down anytime soon.
You may be able to ride that momentum for years to come without experiencing a significant decline in your capital, and even if the momentum starts waning for good, you may have ample time to determine whether to sell or hold.
However, it should be noted that it is rarely the case that one stock makes people millionaires. The more typical path to achieving millionaire status is through a well-structured portfolio with several high-growth companies. In this regard, Coinbase becomes a staple for growth-oriented investors.
What's the right number of companies to invest in, even if portfolio size doesn't matter? “Studies show there's statistical significance to the rule of thumb for 20 to 30 stocks to achieve meaningful diversification,” says Aleksandr Spencer, CFA® and chief investment officer at Bogart Wealth.
Penny stocks are often traded on different tiers of the OTC markets, such as OTC Pink, OTCQB, and OTCQX. Stocks on OTC Pink have the least regulatory oversight and may involve higher risk, while OTCQB and OTCQX have more stringent requirements and may be considered slightly safer.
Along with Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc.(NASDAQ:GOOGL), and Amazon.com, Inc.(NASDAQ:AMZN), Cisco Systems, Inc.(NASDAQ:CSCO) is a top A-rated stock that billionaires are buying.
A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.
Imagine you wish to amass $3000 monthly from your investments, amounting to $36,000 annually. If you park your funds in a savings account offering a 2% annual interest rate, you'd need to inject roughly $1.8 million into the account.
Can You Make a Lot of Money in Stocks? Yes, if your goals are realistic. Although you hear of making a killing with a stock that doubles, triples, or quadruples in price, such occurrences are rare, and/or usually reserved for day traders or institutional investors who take a company public.
Alongside Microsoft Corporation (NASDAQ:MSFT), NVIDIA Corporation (NASDAQ:NVDA), and Apple Inc. (NASDAQ:AAPL), Adobe Inc. (NASDAQ:ADBE) is one of the best money making stocks to invest in. In its Q3 2023 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Adobe Inc.
With a $10,000 account, a good day might bring in a five percent gain, which is $500. However, day traders also need to consider fixed costs such as commissions charged by brokers. These commissions can eat into profits, and day traders need to earn enough to overcome these fees [2].
With so many routes, anybody can enter the market, but your ultimate success depends on you. Depending on the route that you choose, trading can become a full-time career opportunity, a part-time opportunity, or just a way to generate supplemental income.
Assuming that you can earn this 10% average return over your investing career, if you are getting started investing this year and you want to become a millionaire in 30 years, you would need to invest $506.60 per month. This amount may seem like a lot, but it may actually be pretty doable for many people.
Over the long term, the average annual stock market return is 10%; that average falls to between 7% and 8% after adjusting for inflation. That means $1,000 invested in stocks 30 years ago would be worth over $8,000 today.
Day traders' earnings vary widely based on experience, skill level, trading strategy, and market conditions. Some may earn a substantial income, while others may not be as successful. It's important to note that day trading involves significant risk and is not suitable for everyone.
Introduction: My name is Rueben Jacobs, I am a cooperative, beautiful, kind, comfortable, glamorous, open, magnificent person who loves writing and wants to share my knowledge and understanding with you.
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