When you are investing in your 20s it might seem like you have all the time in the world, but it is never too early to start investing. With plenty of years ahead of you, a few investments now will grow over the next few decades providing a nice nest egg for when you need it most. With that in mind, we have three great stocks to invest in young and watch as your money starts to grow as you do.
1. Ark’s Innovation Fund (ARKK)
ETFs are always a good bet for anyone at the beginning of their investment journey as they help mitigate volatility. With an investment in Ark’s Innovation ETF (NYSEARCA: ARKK), an investor puts their money into a fund that is not only a safer bet but also focuses upon building the future. A perfect choice for anyone in their 20s.
The fund is focused on 5 different themes which tackle different areas of innovation that will be intrinsic for future developments in the world. The themes are DNA technologies (genomics), energy storage, autonomous technology, next-generation internet services, and fintech.
As the popularity of this ETF has grown over the last year, so too did its share price, which grew 281% in 2020 alone. Indeed, with its top 4 holdings being Tesla, Roku, CRISPR Technologies, and Square, no wonder the fund as a whole is becoming a firm favorite for many.
Furthermore, the Portfolio Manager for this fund is none other than Cathie Woods, the CEO and CIO of the wider ARK Holdings company, which is currently the top competition for industry titans such as Warren Buffet.
The Ark Innovation ETF is the perfect investment for any young professional who wants to bank on the future of innovative companies that will bring us into a new era of tech.
2. Square (SQ)
For the majority of investors in their 20s, Square (NYSE: SQ) is a widely known — and used — company. In fact, its Cash App has exploded in popularity since its inception 8 years ago. Between 2017 and 2020, monthly active users (MAUs) grew from 7 million to 30 million, with around 7.5 million of those using the app on a daily basis.
Many of Square’s critics will point out that as a company it faces hot competition from the long-established PayPal. Over the course of 2021 in particular, the two companies are expected to battle it out as they both continue to improve their digital wallets service.
Square’s CEO, Jack Dorsey, is also the CEO of Twitter, and let’s face it, he’s a cool dude with pop-culture icon status. Dorsey is known to be an innovative and intriguing CEO, particularly with his recent announcement of Square’s additional $170 million investment in Bitcoin on top of its $50 million investment last October. This is a bid to stay abreast of the cryptocurrency movement which saw 3 million Cash App users trade Bitcoin in 2020. Furthermore, in January alone, the app saw 1 million users trade the cryptocurrency, a great result for Dorsey’s Bitcoin bet.
Square is a socially and economically relevant company that appeals to a wide range of people and businesses. It is not a company that is going to disappear in the near future, thus this is a perfect investment for any investor in their 20s.
3. Walmart (WMT)
It is often seen as a good strategy to focus on income stocks, but when volatility arises it is always better to have a good few stocks that have low debt, a wide moat, and healthy cash flow. Yet, a stock that has all that, as well as a dividend, is the best option of them all. That is where Walmart (NYSE: WMT) comes in.
Walmart may seem like a boring stock to buy, particularly in the age of Amazon and Big Tech, but for what is essentially a supermarket stock, this company has it all. It has e-commerce services, subscription-based services in the form of Walmart+, as well as in-store perks for regular customers. Walmart keeps its customers coming back for more.
Although Walmart is not a high-growth stock, over a period of five years the company has managed to almost double its share price, within another five this could potentially double again. It is a strong and stable stock that has proven its ability to survive economic turmoil in a pandemic of all things. The company has the size and the experience to adapt when needed, in addition, it pays out a dividend to all shareholders.
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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.
Contributing Writer at MyWallSt
Poppy likes companies that go the extra mile. Her favorite stock is Amazon because she is fond of its innovation, variety, and creative solutions to sustainability.