The unprecedented coronavirus disease 2019 (COVID-19) pandemic has made this a trying year for Wall Street and investors. Though the broad-market S&P 500 is actually up for the year, it experienced its quickest bear market decline of at least 30% in history during the first quarter. You could rightly say investors have had their resolves tested like never before.
But as investors, we also know that operating earnings growth tends to push equity valuations higher over the long run, and all stock market corrections/crashes are eventually erased by bull market rallies. In other words, it pays to be bullish and buy into innovative and game-changing businesses.
If you want the opportunity to build serious wealth the right way, consider taking $10,000, putting it to work in the following 10 stocks, and hanging onto those investments for the next 10 years (if not longer).
1. Square
Cashless transactions are the future, and Square (NYSE:SQ) is on the cutting edge of innovation in the payments space. Prior to 2020, Square’s seller ecosystem, which provides point-of-sale devices and analytics tools to small businesses, had grown by 49% on a compound annual basis since 2012. More recently, it’s seen a significant uptick in usage by larger businesses, which is good news for this merchant-fee-driven segment.
But it’s the company’s peer-to-peer payment platform Cash App that’ll shine. Cash App has more than quadrupled its monthly active user count since the end of 2017, and is on track to become Square’s leading generator of gross profit by next year. Look for Square to deliver some of the fastest growth among fintech stocks.
2. Intuitive Surgical
Speaking of innovation, surgical system developer Intuitive Surgical (NASDAQ:ISRG) offers a virtually flawless business model. Over the past 20 years, it’s installed 5,865 of its da Vinci surgical systems worldwide, which is far more than all of its competitors combined. It’s the clear go-to for assistive robotics in the operating room and has cemented its competitive advantage for a long time to come.
Intuitive Surgical is also built to improve its margins over time. Selling its da Vinci system generates quite a bit of revenue, but these are costly and intricate machines to build. Where Intuitive Surgical generates to bulk of its margins is from selling instruments and accessories with each soft tissue procedure, as well as in servicing its systems. The more systems installed, the greater the percentage of revenue derived from these higher-margin segments.
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