The holidays are officially upon us. If you're anything like me, that usually means spending more money than usual. After all that spending, if you have some extra cash left over, I've got three stocks that could be valuable additions to portfolios.
As a disclaimer, I am in a wealth accumulation phase of my investing life. This means that I have a greater appetite for risk in pursuit of portfolio growth, and I don't focus as much on less risky assets like bonds or value stocks that are better for preserving wealth. If you find yourself in a similar phase of your investing journey, read on to see what three stocks I bought this week and how they could grow your portfolio over the long haul.
Image source; Getty Images.
1. Tesla: A leader in the EV industry
For the first time in several years, Tesla's (TSLA +0.96%) investors are having to temper expectations. An unfavorable economic landscape, price cuts to popular models, and increasing competition in the electric vehicle (EV) industry are beginning to take their toll on the company's finances. While revenue remains near its all-time high, Tesla's gross profit margins are down below 18% today, falling in five of the last six quarters.
NASDAQ: TSLA
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Yet, taking a longer-term view of the situation, the outlook is much less filled with doom and gloom. Even though new automakers are joining the EV race, Tesla's spot at the top of the industry remains firm. The company is on pace to set a new record in yearly production, plans to open up a new factory in Mexico, is in the beginning stages of setting up shop in India, and has one of the cleanest balance sheets an automaker can have.
There is no doubt that high interest rates and a shaky economy have made their impact felt, but Tesla remains a clear leader in the EV market. Add in the fact that Tesla continues to push technological innovation forward with its pursuit of autonomous driving and artificial intelligence, and Tesla's attractiveness as a long-term player for portfolios becomes all the greater.
2. Bitcoin: The best cryptocurrency out there
I know, Bitcoin (BTC 2.01%) isn't a stock. But it is one of the best investments I have made in my life, and I will continue to allocate a portion of my portfolio to the world's most valuable cryptocurrency for the foreseeable future.
While the value of Bitcoin is up more than 120% this year alone, I think it has plenty left in the tank over the coming years -- and likely even decades. There are simply too many tailwinds forming that will propel Bitcoin to new highs.
The first would be a looming halving. Scheduled for April 2024, the next halving will reduce Bitcoin's inflation rate from 1.8% to a measly 0.875%. We don't need a calculator to figure out that prices will increase with less available supply, even if demand remains stagnant (which it isn't).
CRYPTO: BTC
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Another tailwind is the shifting perception of Bitcoin as a legitimate asset within traditional finance. Multiple applications await the Securities and Exchange Commission (SEC) approval to create the first Bitcoin spot ETF in the U.S. Should approval occur, which seems increasingly likely, it could unlock tens of billions of dollars to enter the Bitcoin market as individuals can gain exposure through pensions, individual retirement accounts, and 401(k)s.
Last and most importantly, Bitcoin continues to prove its worth as a hedge against inflation. Governments worldwide are debasing fiat currencies at alarming rates, with no signs of slowing down. So long as loose monetary policies continue, Bitcoin will keep up its historic pace.
3. Vanguard Mega Cap Growth ETF: A simple but effective ETF
Again, it is not technically a stock, but the Vanguard Mega Cap Growth ETF (MGK +0.37%) is one of my favorite ways to get exposure to all the high-growth companies on the market today. To compile this ETF, Vanguard tracks the MSCI US Large Cap 300 Index, a benchmark consisting of some of America's largest companies.
NYSEMKT: MGK
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In doing so, the fund provides exposure to some of the biggest names on the market, like Apple, Microsoft, and Amazon. In addition, it designates allocation to mainstays like Visa, Costco, and McDonald's.
Add it all up, and the Vanguard Mega Cap Growth ETF is up more than 125% in the last five years. For investors looking to grab the best the market offers without trying to pick individual stocks, this would be the ETF for you.
