The S&P 500 rose 16% in 2020, making it an above-average year for stocks. But you won't catch me chilling on the sidelines in 2021, anticipating stocks to take a year off after better-than-average returns. No, I believe it's important to not try to time the market. Rather, I like to stay invested and search for the best opportunities right now.

Heading into the new year, I think Roku (NASDAQ:ROKU), NVIDIA (NASDAQ:NVDA), and Etsy (NASDAQ:ETSY) can reward investors for the next year and beyond, making them good buys right now. Read on to find out why. 

Person pushes a zero off a cliff to leave the digits 2021.

Image source: Getty Images.

1. Roku

Here's a brief four-point summary of why I like streaming-video platform company Roku long-term:

  • People worldwide love to watch TV.
  • Consumers increasingly prefer to stream on demand. According to eMarketer, in 2020, 6.6 million households will have canceled traditional pay-TV services in the U.S. alone, a 7.5% year-over-year drop. The beneficiaries of this trend are streaming platforms like Roku.  
  • Consumers love Roku's easy-to-use, independent platform, as evidenced by its rapid customer growth (active accounts were up 43% year over year in the third quarter of 2020). And media companies continue to launch streaming services on Roku, chasing that large and growing audience.
  • Roku's platform segment has a 61% gross profit margin. In 2020, the company has reported a net loss as it invests back in the business, but its high gross margin suggests this could be a cash-flow machine at maturity. Indeed, consider that Roku has reported over $100 in net cash from operating activities through the first nine months of 2020.

Now, here's why I like Roku specifically in 2021: In the U.S., there are still 77.6 million households with pay TV, leaving plenty of runway for continued streaming adoption. I expect households will continue to make the switch this year. And now that Roku has HBO Max and Peacock, its platform hosts all the major channels -- at this point, there's no reason to not at least consider Roku when choosing a platform. 

Furthermore, advertisers are cutting budgets with traditional media sources, convinced of the benefits targeted ads can provide. As such, advertisers are increasing their commitment to advertising on Roku, which should boost the company's ad revenue in 2021.

Of course, Roku isn't without risk. Specifically (assuming the COVID-19 pandemic officially ends), Roku's users are likely to stream less content per day in 2021 than they did while sheltering at home in 2020. I still expect revenue to be up, but fewer streaming hours could result in lower average revenue per user (ARPU). Wall Street might not like that, which could cause shares to pull back in the short term.

However, long-term, I expect Roku stock to keep climbing as the aforementioned trends keep playing out, making any short-term pullback a prime buying opportunity for this top stock pick.

An NVIDIA A100 GPU.

Image source: NVIDIA.

2. NVIDIA

NVIDIA stock doubled in 2020, but I see three big catalysts that could push its stock even higher in 2021. First, consider that 25% of this semiconductor technology company's revenue in fiscal 2020 came from China. Investors have feared what the long-term consequences of an ever-escalating trade war between China and President Trump's administration could be. According to a recent New York Times interview, President-elect Joe Biden doesn't plan to roll back Trump's tariffs right away. But it's probably safe to assume he won't escalate trade tensions further, relieving this immediate concern for NVIDIA shareholders.

Second, 2021 could be a big year for autonomous driving, and NVIDIA is at the forefront of autonomous-driving technology. Whether or not full self-driving capabilities will be allowed isn't the point. The point is that automakers are rolling out new capabilities in anticipation of more regulatory approval. For example, the Honda Legend will have level-three ability in Japan this year. With new deals with Hyundai and Daimler's Mercedes-Benz, among others, NVIDIA's automotive segment could soon return to year-over-year growth.

Finally (but admittedly more speculatively), don't forget about cryptocurrency. Remember when NVIDIA stock plummeted over 50% toward the end of 2018? Then, NVIDIA fell because the price of bitcoin fell nearly 70% during 2018. But in 2017, bitcoin was up over 1,400%, sparking a cryptocurrency mining craze. NVIDIA was a primary beneficiary of this mining craze because its GPUs are particularly up to the computing challenge of mining. Considering that the price of bitcoin has more than tripled in the last three months, a crypto mining craze could reignite in 2021, putting NVIDIA's products back in high demand.

Of course, I'm only talking about the growth prospects for small parts of NVIDIA's business with the three catalysts I've mentioned here. But even its two largest segments (gaming and data centers) are poised for growth, making the company's overall prospects look bright in 2021.

Man in suit draws an exponential growth curve on a chart.

Image source: Getty Images.

3. Etsy

The COVID-19 pandemic has caused millions of people to need a facemask for the first time, and consumers turned to Etsy in droves. As of the third quarter of 2020, active buyers on Etsy have reached 69 million, up 56% year over year. And a larger audience naturally attracts more sellers. There are now 3.5 million active sellers on Etsy, up 43% year over year. In short, 2020 was a year of unprecedented adoption of Etsy's platform.

But Etsy won't die as facemask sales dwindle. Indeed, repeat buyers were up 70% in Q3, showing that this is more than a one-time surge. Indeed, Etsy has reached a scale that will continue to attract both buyers and sellers in 2021 and beyond.

What makes an Etsy investment truly compelling is its chance at exponential growth. Not only is the company growing its user base at a rapid pace, it also now has an opportunity to better monetize users, compounding the opportunity. For example, sellers can pay extra to advertise their products. Etsy ad revenue skyrocketed 106% year over year in Q3, and revenue from services like this now comprises 24% of its total revenue.

This rare chance at exponential growth is why I think Etsy stock is one of a handful that can make you rich in the coming year.

Here's to 2021

While Roku, NVIDIA, and Etsy are three of my top ideas heading into the new year, I can't predict one-year returns for these stocks. In investing, your thesis can be right, but it may still take some time before you realize market-beating gains. In recognition of this, it's entirely possible these stocks could lose to the market in the coming year. But as long as the things I've described are playing out, I believe it's very likely these stocks will reward their shareholders in the long run.