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3 Stocks to Start Investing in Right Now

By John Ballard – Sep 18, 2020 at 7:30AM

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Here are three safe growth stocks that can power your investment returns for years to come.

Investing in stocks is one of the best ways to grow your savings. A simple approach to get started is to think about companies you're familiar with, especially the ones that have already established a record of delivering good returns to investors.

Here are three of my favorites that have delivered wealth-building returns and are well-positioned for more growth.

Hand holding hourglass with dollar signs floating around it

Image source: Getty Images.

1. Apple

There are not many companies that have developed a sticky connection with customers like Apple (AAPL 2.44%). Across various studies, Apple is typically ranked as one of the most valuable brands in the world. It has a growing installed base of 1.5 billion active devices worldwide. 

The stock has returned nearly 300% over the last five years. Investors are high on Apple's prospects to convert its installed base of users into a growing demand for services, such as Apple Music, iCloud, Apple TV+, and the newly introduced Apple Fitness+. Fitness+ will launch later this year, but revenues from existing services are growing faster than the rest of the business and now comprise 22% of Apple's total revenue. 

However, the iPhone is still Apple's biggest revenue source. There should be high demand for the new 5G-enabled iPhone, expected to be announced this fall. The buzz surrounding each new product reveal has never faded at Apple, which is a testament to the enduring value of the brand, and why it should remain a relatively safe stock to build your investment portfolio around.

2. PayPal

You can find great investments by sticking with top brands, like Apple, but you can also find big winners in the stock market by identifying megatrends that are shaping society. The shift from legacy payments to digital is fueling momentum at one of the leading mobile payment providers in the world, PayPal Holdings (PYPL -1.66%).

Legacy payments, like cash and check, are still widely used around the world, but more people are gradually changing with the times. The COVID-19 pandemic has accelerated this trend, which is why PayPal increased its total active accounts by 21% year over year to 346 million in the most recent quarter. 

The increasing reach of its platform serves as a powerful advantage. PayPal's growing scale has helped it win partnership deals with leading credit card providers and banks to allow users to have more payment choices through their PayPal digital wallets. PayPal offers digital payment solutions for consumers at checkout, as well as merchants, and this end-to-end platform provides valuable data about consumer shopping patterns. 

PayPal has continued to form new partnerships with leading tech companies, like MercadoLibre and Uber Technologies, which significantly expands the reach of PayPal's business. The stock is up 448% over the last five years and is one of the safest digital payment stocks to consider in 2020. 

3. Activision Blizzard

With more than 400 million monthly active players, Activision Blizzard (ATVI -2.42%) is one of the leading companies in the growing interactive entertainment industry. There are estimated to be more than 2 billion people who play video games, and these players are estimated to spend $159 billion on games this year. 

The video game industry is emerging as a mainstream form of entertainment for younger generations, where the average gamer is around the age of 35. Activision Blizzard makes some of the most popular franchises for consoles, PCs, and mobile, including Call of Duty, Overwatch, World of Warcraft, and Candy Crush. These games attract a very wide demographic, with players spanning nearly every major region worldwide, and women making up about half of its player base. 

The stock has climbed 173% over the last five years. Recent releases in the Call of Duty franchise helped grow Activision Blizzard's monthly active users by 30% year over year last quarter. With new ways emerging for players to express their passion for games through esports and live game streaming, owning one of the leading game makers should pay off over the long term.

John Ballard owns shares of Activision Blizzard, Apple, and PayPal Holdings. The Motley Fool owns shares of and recommends Activision Blizzard, Apple, MercadoLibre, and PayPal Holdings. The Motley Fool recommends Uber Technologies and recommends the following options: long January 2022 $75 calls on PayPal Holdings, long January 2022 $75 calls on Activision Blizzard, and short January 2022 $75 puts on Activision Blizzard. The Motley Fool has a disclosure policy.

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