The stock market is a vehicle that can triple your money over the next 10 years. For evidence, I encourage you to look at the past 10 years. If you invested $10,000 in October 2011 and simply matched the return of the S&P 500, you’d have more than $36,000 now.
Which brings me to an important point. The headline brought you here promising stocks that could triple your money. But tripling your money — despite how great that sounds — would have been a market-losing investment over the past 10 years. With this in mind, while I’m not presenting you with what I think are losers, the three stocks here might not have the highest upside in the stock market. Nevertheless, I do believe they’re rock-solid ideas that can serve as a foundation for your portfolio.
If you can’t beat ’em
To triple your money in 10 years, you need to achieve a 12% annualized return. The hurdle looks small but in reality few stocks can do it for a decade. The stock market as a whole, however, is a different story — it could. That’s why you might consider starting with an exchange traded fund (ETF) that simply tracks the performance of the entire market, like the Vanguard S&P 500 ETF (NYSEMKT:VOO). As they say, “If you can’t beat ’em, join ’em.”
Here you’re not betting on any one company but rather 500 of the largest U.S.-based businesses there are. Historically that’s been a bet worth taking.
But there’s a good reason to take this bet via the Vanguard S&P 500 ETF specifically. ETFs and mutual funds charge investors fees for their services. And these fees can eat away at potential returns over time. However, Vanguard only charges 0.03% annually for its S&P 500 ETF whereas the average for ETFs is much closer to 1%. This cheap fee structure is in investors’ favor when trying to triple your money in a decade.
A durable competitive advantage
Airbnb (NASDAQ:ABNB) is the most well-known short-term rental company. But I want to emphasize at the outset that this is a marketplace business. In this case, the marketplace provides a place for property owners to rent out their spaces to other people for a short time. However, the struggle for any marketplace like Airbnb is gaining initial adoption. After all, no one wants to list their home on a marketplace that doesn’t have many users.
Therefore, marketplaces benefit from network effects — every new user makes the platform more attractive to other potential users. …….