Regardless of whether you are a seasoned investor or a novice, 2016 has been challenging. The benchmark S&P 500, historic Dow Jones Industrial Avg., and tech-driven Nasdaq Composite are all down by 14%, 11%, and 24% since hitting their highs. The Nasdaq’s more than 20% drop puts it firmly in a bear market.
It’s not just the size of the aggregate declines that investors are concerned about. Last Thursday, May 5, we saw a true stock market plunge. On an intra-day basis, the Nasdaq Composite fell by 6%, making it the third-largest single-session point decline on record. The nominal point decrease for the S&P 500 and Dow was also among their 10 largest in history.
Even the most severe stock market drops and corrections may be profitable since history has shown that they are the ideal moment to purchase. That’s because each crash and correction in history has been followed by a bull market rally, which has always returned everything back to normal. If you invest in game-changing firms, you’ll have a good chance of increasing your money.
Two outstanding growth stocks that are ready to be bought and held forever.
The first on the list is social media behemoth Meta Platforms (0.73% daily return), which was formerly known as Facebook. According to its forward-year earnings multiple of 14, Meta has never been more inexpensive.
Despite having taken a beating since the year began, Meta’s stock has risen five percent in April. The company announced that in March, it had 3.64 billion monthly active users (MAUs), which was 6% greater than during the same period last year. In other words, each month over half of the world’s adults visits a Meta-owned asset like Instagram, Facebook, and WhatsApp as part of their social media usage. Because there is no social media platform that provides access to a wider audience, advertisers realize that Meta has superior ad-pricing power.
Another advantage of Meta’s investment in the metaverse is that it is presently one of the industry leaders. The metaverse is the next chapter of the internet, which will allow connected people to interact with their surroundings and each other in three dimensions. Even if metaverse expenses put a damper on Meta’s short-term earnings, these are the investments that should be well worth the money if the metaverse lives up to its multitrillion-dollar potential.
Investors may buy shares of robotic surgical system creator Intuitive Surgical (ISRG 1.28%) with the knowledge that they won’t have to sell for years to come. The firm’s stock price has plummeted nearly 39% in less than five months.
The beauty of Intuitive Surgical’s business model is twofold. To begin with, the business has dominated the field of soft tissue operations for the past twenty years. It had 6,920 da Vinci surgical systems in operation around the world as of March 31, 2022, which is a long way ahead of its competitors. Because these machines are costly and require training time, Intuitive Surgical likes to keep customers onboard for a long time.
Intuitive Surgical’s success is also attributed to its long-term margins, which are set up to increase over time. The company’s primary source of income has been the sale of its da Vinci devices since the 2000s. These are complicated systems, so margins earned on their sale were low at best. Instrument and accessory sales with each operation, as well as servicing revenue, have become the lion’s share of total sales over time. These higher-margin segments set Intuitive Surgical up to be a long-term winner.
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