KEY POINTS
- The bear market is intimidating even for experienced investors, but it should not be.
- The downturn in the market happens more often than you think and is a good opportunity to buy the best companies at a cheaper price.
- The stocks are tossed to the edge but in good condition.
Adding shares to these market leaders has to pay a lot of money when it comes to dusting off.
The next bear market is already on us (or will be coming soon). The tech-heavy Nasdaq Composite is down 28% year-on-year, while the S&P 500 index is down 17.3%. The bear market is generally defined as a situation in which the market drops by 20% or more from its previous highs for a long time. So, depending on which market you follow, we already exist or are in love with it.
Keep in mind that this decline occurs more often than you might think. Since 1945, there have been 14 bear markets, or once every five years on average, according to a study from Hartford Funds. Because the stock market has brought about 10% annual return over the past 50 years and there has been a lot of sales along the way, this decline creates good opportunities to buy large companies at very discounted rates that can improve your long-term - long term returns.
If you are looking to buy shares in a fire auction, here are three stocks with a bright future to consider.
1. Shopify
Global e-commerce is expected to reach $ 7.4 trillion by 2025, up from $ 4.9 trillion by 2021. But you would not know that there is a great long-term opportunity for Shopify (SHOP 1.54%) to judge stock performance. For the year to date, the prices of this leading provider of online marketing solutions have dropped by 76.4%.
2. Lululemon Athletica
Shares of Lululemon Athletica (LULU 0.97%) have declined by 34% per annum so far. This emerging brand operates at a fast pace in the global sports goods market. A study from Statista estimates that the market will grow from $ 192 billion by 2021 to $ 267 billion by 2028.
Lululemon could be a great stockpile to ride that increase. An investment of $ 10,000 in stock over the past five years would have just cost $ 52,750.
Unlike Nike and other top brands, Lululemon does not make many TV markets. The company was founded in 1998 with a local yoga studio in Vancouver, Canada. Through word of mouth and low-level programs, Lululemon has grown into a $ 6.3 billion business annually. This means that Lululemon attracts customers not only through smart marketing but also for quality product that people want to buy.
3. Nvidia
Another growing stock acquired by shellacked this year is Nvidia (NVDA 2.40%), a fast-growing supplier of graphics processing units (GPUs). Its shares have declined 51.6% since their full-time high near the end of 2021. While Wall Street analysts warn investors of potential growth slows, long-term investors should consider adding this technology winner to their nest egg.
50% haircuts already have prices on bad news in the short term. The stock may continue to decline slightly as the market continues to fall, but at 44 cents and profits, there is a strong current under the stock market right now.
Nvidia has always been in great demand for the most efficient processors and computer systems that have recently developed. For the fourth financial quarter of 2022 ending Jan. 30, revenue has grown by 53% year on year, driven by a 37% increase in GPU games and a 71% increase in demand for a data center.
Whatever happens in 2022, Nvidia could grow significantly in the next 20 years. With its leadership position on GPUs, it facilitates the most important technological trends, such as computer-generated intelligence, 3D architecture, robots, self-driving cars, medical imaging, and more. These are trends that affect all sectors of the economy. Managers estimate that the company's current market opportunity is only 1% of the industries they currently use, which translates into hundreds of billions of dollars in potential revenue.
This is the top stock you can think of to buy dips and hold for the rest of your life. Your retirement account will thank you.
