Even though the S&P 500 has bounced off its bear market lows, it was still the worst start to a year for the broad market index since 1970. And when you couple inflation at 40-year highs, gas prices that hit an all-time record of $5 a gallon, and the Federal Reserve raising interest rates by the highest amount since 1994, it's been a difficult time for investors.
Of course, there is a silver lining to those clouds. A bull market has followed every bear market in history, and the data shows that the market's run higher lasts longer than its fall. That's why savvy investors don't necessarily cheer on market crashes since they cause real pain. But investors also realize they're the perfect opportunity to buy good companies at prices that haven't been seen in some time, which means, given time, they'll be able to go on to new heights.
No one knows whether the bounce we're seeing now in the stock market is the start of another push higher or simply a breather before taking another plunge. That's why you should always be adding new money into your portfolio to take advantage of the discounts being offered.
If you have $7,500 available to invest, the following pair of growth stocks are ones you can confidently buy today to achieve superb returns in the future.
Financial stocks are thought by many investors to be too complicated to invest in. But the premise behind Upstart Holdings (UPST 9.01%) is simple: It uses artificial intelligence to evaluate borrower loan approval. Currently, three-quarters of all loans scrutinized by Upstart have been automated, which results in time savings for borrowers and financial savings for lenders.
Obviously, in a rising interest rate market with the possibility of a recession looming, there are concerns about the creditworthiness of borrowers and how that will affect Upstart's business. The curious thing, though, is that while Upstart-approved borrowers tend to have a lower average credit score than their traditionally vetted counterparts, Upstart's loss rates are actually lower than those of the competition.
That means Upstart is bringing lenders a wider pool of applicants at no greater risk. And that's important to lenders because even in difficult economic times, lenders have to, well, lend money in order to survive. That is the business they're in, so if they can reach more people with the same risk profile, it's a win-win for everyone involved.
Make no mistake, economic conditions can affect Upstart's operations just like any other company. But it is positioning itself to weather any rough patches to emerge healthier and is expanding into new verticals such as auto loans and small-dollar loans. There's always the mortgage market as a future market to enter, even as housing is cooling off fast today.
Bleach maker Clorox (CLX -1.46%) is an example of the market throwing the baby out with the bathwater, beating down its stock by 36% before realizing it may have been a mistake. Even though its stock has jumped 20% off its lows, it still trades 15% lower than where it started the year and is down 37% from its all-time high at the peak of the COVID-19 lockdowns.
Clorox's business is solid and growing, and while the imperative to sanitize every surface has diminished since those early days, organic sales continue to grow and were up 2% last quarter.
Of course, Clorox is more than just bleach. It owns dozens of name-brand consumer products such as Brita, Formula 409, Glad, Hidden Valley, Liquid-Plumr, Pine-Sol, Tilex, and Kingsford. Many are the top sellers in their respective categories and will continue growing strongly into the future.
One of the more attractive aspects of a Clorox investment is its dividend, which yields 3.2% annually and has been paid for over 50 years. Equally important, the bleach maker began raising the payout in 1977 and hasn't stopped, which qualifies it as a Dividend Aristocrat. It most recently increased the quarterly dividend on July 12, announcing it would hike it another 2% to $1.18 per share, or $4.72 per share for the year.
Its business is simple to understand, and Clorox is a stock you won't mind holding over the decades to come.