Going into the office and working your 40-plus hours a week isn't likely to lead to any significant wealth for you -- at least, not on its own. However, if you invest a good chunk of that money into the right growth stocks, that could speed up your wealth gains and put you in a much better position in the future. It may even make you rich.
Below are two stocks that, through two very different approaches, could lead to significant wealth if you invest in them today.
1. Apple
Apple (NASDAQ:AAPL) is one of the safest long-term investments you can put your money into. The company commands a loyal following of customers, and as its focus has shifted more to services, its business will be even more stable and predictable. One of the more exciting parts of its business is its Apple TV service, which will now compete for cord-cutters head-on with streaming companies including Netflix and Amazon. It's no small challenge for Apple, but Morgan Stanley projects that Apple TV could be earning $9 billion annually from the new business in just five years.
Over the past five years, Apple stock has made its investors very wealthy, generating returns north of 160%. That's well in excess of the 58% that investors could have earned with the S&P 500 during that time. Even if that level of growth may not be sustainable over the next five years, given Apple's incredibly strong financials, with the company recording a profit of more than $10 billion in each of the past four quarters, the business continues to look very strong, and it's unlikely the stock will go anywhere but up.
Image source: Getty Images.
Services like Apple Music, Apple TV, and many others will ensure that Apple will continue to find ways to grow its business over the long haul. That's why holding shares of this top tech stock could make Apple a safe way to grow your wealth and help make you rich by investing in the stock today.
2. Canopy Growth
Canopy Growth (NYSE:CGC) is not the safest way to grow your wealth. The marijuana stock is a much riskier investment than Apple, but with a lot more risk, investors can reap more in potential rewards as well. Just a year ago, the cannabis giant was trading at more than $50 a share. If it can even get back to those levels, investors today will more than double their money.
It's easier said than done, but with investors and analysts having very low expectations for the stock given how badly the industry has performed in 2019, this year could be a great one for Canopy Growth to deliver some surprising results. Now with Constellation Brands CFO David Klein becoming the cannabis company's new CEO, Canopy Growth should be on a more financially responsible path, and there's hope that he can help make progress toward hitting breakeven as well. If that happens, there could be a lot of bullishness that comes back to the stock in a hurry.
If the cannabis industry grows to the mammoth $130 billion market size that investment bank Jefferies Group expects it to reach by 2029, Canopy Growth investors could stand to benefit significantly from that. The company is already positioning itself for possible entry into the U.S. market with its pending deal with multistate cannabis operator Acreage Holdings -- it's just waiting for marijuana to be legal federally in the U.S. before the two cannabis companies can join forces and potentially dominate the industry.
There's no shortage of ifs surrounding Canopy Growth's future as it is certainly not a risk-free investment, but the stock could make investors who buy it very rich if the legal cannabis industry in the U.S. takes off, as many analysts expect it to.
Which path is right for you?
There are many opportunities for investors to get rich from their investments. Apple is the steady, long-term approach that can be safer for your portfolio, but it could also take a while for the stock to achieve significant returns for investors. For risk-averse investors who have decades worth of investing years left, Apple is the way to go.
Canopy Growth, meanwhile, could double or even triple in price depending on how quickly cannabis legalization progress, particularly in the U.S. If the U.S. were to legalize marijuana within the next year or two, Canopy Growth could spike in price almost instantly as it would open up tremendous growth opportunities for the company overnight. The danger for investors is that in the short term, the stock can be very volatile, and there's no guarantee that it will rise in value. For investors who are willing to take on some risk in exchange for more significant upside, Canopy Growth may be the better option today.
Both of these stocks can provide investors with significant riches, but that doesn't mean they're suitable for every type of investor.
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January 05, 2020 at 08:00PM
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2 Stocks That Could Make You Rich - Motley Fool
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