What a difference 17 months can make. In March 2020, during the initial wave of the coronavirus pandemic, the benchmark S&P 500 sank by 34% in roughly a month. It was, by far, the quickest decline of at least 30% in its history. Yet, it took this widely followed index less than 17 months to double in value from its March 23, 2020 bottom. That's the power of buy-and-hold investing in action.
No matter how close the S&P 500 and other respective indexes are to new all-time highs, it's always a good time to put money to work in the market, as long as your investing timeline is measured in years.
With this being said, if you have a healthy $10,000 in cash for investments, which won't be needed to pay bills or cover emergencies, the following five stocks would be perfect to buy right now.
If you're putting a significant chunk of capital to work in the market, the FAANG stocks have historically been a smart choice. In particular, Alphabet (GOOGL -0.33%) (GOOG -0.33%), the parent company of Google and YouTube, would be a perfect addition.
The simple reason Alphabet can continue to outperform is its veritable global monopoly on internet search. According to GlobalStats, Google's share of worldwide internet search has ranged from a low of 91.4% to a high of 93% over the trialing two-year period, ended in July 2021. As the clear go-to for search, advertisers are willing to pay up for premium placement on Google.
It also doesn't hurt that Alphabet's ad-driven business benefits from the disproportionately long amount of time the global economy spends expanding, relative to contracting. Although Alphabet will navigate its way through inevitable recessions, they're considerably shorter than the multiyear periods of expansion shareholders have come to enjoy.
If you need one more solid reason to hop onboard the Alphabet bandwagon, consider that its ancillary operations are growing even faster than its core internet search segment. Ad revenue at YouTube has soared, and the company's cloud infrastructure service platform Google Cloud is growing by nearly 50% year over year and has an annual sales run-rate of $18.5 billion.
U.S. marijuana stocks are another perfect place to put your money to work in the market right now. Specifically, multistate operator (MSO) Trulieve Cannabis (TCNNF 4.84%) has all the attributes of a winning investment.
Whereas most MSOs have tried to establish a presence in as many big-dollar markets as possible, Trulieve Cannabis has taken a rather unique approach to its expansion. As of mid-August, the company had 97 dispensaries open nationwide, and had a presence in seven states. However, 88 of its 97 operating retail locations are located in medical marijuana-legal Florida.
By absolutely saturating the Sunshine State with its stores, Trulieve has been able to effectively build up its brand without breaking the bank on marketing costs. As a result, it's been profitable for 14 consecutive quarters (3.5 years).
But don't think for a moment Trulieve isn't thinking beyond Florida. It's also in the process of acquiring MSO Harvest Health & Recreation (HRVSF) in the largest U.S. cannabis deal ever. Harvest Health has a five-state focus, one of which happens to be Florida.
But beyond further solidifying its presence in the Sunshine State, Trulieve will gain access to Harvest's 15 dispensaries in Arizona, which legalized recreational pot this past November. This'll give Trulieve a leading position in two sizable markets and greatly expand its profit potential.
While the vast majority of biotech stocks are still looking for their first blockbuster drug, Vertex has developed a long line of highly successful therapies. Its claim to fame is the multiple generations of treatments it's developed to treat cystic fibrosis (CF), a genetic disease characterized by thick mucus production that can obstruct the lungs and pancreas.
In 2019, Vertex's latest generation of CF treatment, combination therapy Trikafta, was approved by the U.S. Food and Drug Administration (FDA). This approval came five months ahead of its scheduled review date with the FDA. Trikafta targets the most common CF mutation and is operating at a $5 billion annual revenue run-rate, based on second-quarter sales. The company's CF drug franchise is well-insulated from competition.
Vertex also happens to be swimming in cash. The company had just over $6.7 billion in cash, cash equivalents, and marketable securities as of June 30. This capital will help it fund ongoing internal studies for nearly a dozen unique compounds, and it could be used to fuel acquisitions in order to diversify its revenue stream.
Furniture stocks are usually the opposite of high-growth opportunities. That's because the furniture industry tends to be brick-and-mortar-based and is almost entirely reliant on foot traffic. But this isn't the case with Lovesac, which has used innovation and its omnichannel presence to maintain a double-digit growth rate and push into profitability two years ahead of Wall Street's expectations.
Lovesac's furniture is a big differentiator. The company's Sactionals -- modular sectional couches that make up almost 85% of total sales -- can be rearranged in a variety of ways to fit any living space. Additionally, there are around 200 different cover choices that consumers can buy, which all but assures it'll match a home's décor or theme. Lastly, the yarn used in these covers is made entirely from recycled plastic water bottles. That's abundant choice, functionality, and ESG investing, all in one product.
Lovesac's success is also a function of ramping up online sales during the pandemic. As a company designed to operate with lower overhead to begin with, the pandemic coerced Lovesac to operate even leaner -- and it worked. With multiple avenues to sell its products, the sky is the limit for Lovesac.
In case you missed it the first time, the FAANG stocks are a smart way to put $10,000 to work in the stock market. The final perfect stock to buy right now is Amazon (AMZN -2.73%).
As most folks are likely aware, Amazon is the kingpin when it comes to e-commerce. Approximately $0.40 of every $1 spent online this year will route through Amazon's marketplace. This dominance has helped the company sign up 200 million people globally to a Prime membership. Since retail margins are generally low, Amazon has leaned on its tens of billions of dollars in subscription fee revenue to offset retail margin weakness and undercut brick-and-mortar retailers on price.
What's far more impressive are Amazon's rapidly growing ancillary businesses. Amazon Web Services (AWS) controls close to a third of the cloud infrastructure market, with subscription services and advertising also handily outpacing the growth potential of Amazon's marketplace. Since AWS offers substantially higher margins than online retail, it'll be primarily responsible for more than doubling Amazon's operating cash flow by mid-decade.
If Amazon were to be valued at its historic price-to-cash-flow multiple by 2025, it could find itself at $10,000 a share.