Over the past decade, the stock market is flat. With all of the extreme ups and downs in the market from 2001- 2011, if you left your portfolio up to the S&P 500 index, you would have exactly the same amount of money that you put in to the market. There have been plenty of stocks that have outperformed during that time, however you can’t make money by playing the “woulda” “coulda” “shoulda” game. So what are the three best bets looking over the next decade? It is actually simpler to figure out than you may think.
The best, and most obvious play of them all is Apple (AAPL). With a growth rate still well above the S&P average, and a cult following, this stock is sure to make your portfolio grow. In just the past decade, the tech giant has released the iPhone, iPad, and rumor has it a true iTV is coming within the next six months. While they may have reached mature company status in the United States, they are still considered a high growth company in China and India. Keep in mind that China and India have a consumer population three times the size of the United States. If the iTV is everything it is being hyped to be, we could all be looking at the railroad of our generation. There are also some whispers coming that there could be a stock split coming on this $650+ stock. Normally, a stock split is negligible to a stocks actual performance. This time, it could entice people who have been suffering from sticker shock to purchase the stock. With a new consumer being introduced to the stock itself, it could help drive the price up over the next decade.
A little known stock to most individual investors is NXP Semiconductors (NXPI). This company is a major player in the up-and-coming nfc technology sector. What is nfc? First, nfc stands for “Near-field-communication”. This technology could allow consumers to leave their wallets at home and just use their mobile devices to pay for items, check out books at the library, or use as a state ID. Currently, there are items such as Google Wallet, Paypal, and others who implement this technology. Think this is a space age idea that will never come to fruition? Think again! There is a large consortium of corporations that are putting together an nfc option together for their consumers. Walmart, Best Buy, Target, and 7-Eleven have put together a company so that they can offer their consumers the ability to pay for items using nfc technology. Think about what that means for Black Friday sales? No more long lines for checkout, long lines waiting to get in the store hours after it opened, and more associates available to up sell consumers. NXP Semiconductors has a pretty rock solid patent portfolio for nfc technology, and already has an impressive client list that includes Microsoft, Samsung, and Google just to name a few. With a massive growth rate, a growing premium client list, and an up and coming technology, this stock is a must have in your portfolio for the next decade.
The most hyped IPO in the past three decades has been a massive flop. Facebook (FB) has been an extreme failure for anyone who bought it in the first six months since it’s gone public. With a current P/E ratio north of 36, and a PEG ratio paring back to 1.36 this stock is still overpriced. However, the company is still growing at an astounding rate, and they are still learning how to properly monetize their platform on the desktop and in the mobile arena. For a company that is still less than ten years old, they have an impressive annual revenue of more than $4 billion a year. With a relatively low growth rate of 20% on revenue, compared to prior performance, this company is looking at having a total revenue of $9.72 billion in just five years. That would be an extremely conservative estimate considering how aggressive this company is in growing their revenue streams. If Facebook can achieve $10 billion in total revenue by 2017, their P/E ratio of 18 would make the company grossly undervalued. The next generation of mobile business and social media could be a perfect marriage for Facebook, and they are the best positioned to capitalize on that market. This company could be the key to your child’s education, your retirement, and your overall portfolio.
These stocks are the best way to beat the market over the next ten years. While there is no telling what will happen with the Euro, the world economy, or our economy, these three stocks are set up perfectly to add more dollars to your pocket. The key to investing is to be able to see what trends are coming in the future, and these tech companies will be a major part of the future.
DISCLOSURE: I am currently long both Apple and NXP Semiconductors. I did not receive any financial compensation for this article from the afore mentioned companies. Always seek advice from a licensed financial professional before considering buying any securities. Investing always involves a great risk of loss, and as such, you should never invest more than you can afford to lose.