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Saturday, July 25, 2015

5 stocks everyone in their 30s should own

Investors in their 30s have plenty of time to allow their investments to grow. So what are some of the best stocks to have in your portfolio during this important part of your investing career? You might think that your younger years are a great time to roll the dice on "it" stocks like Tesla Motors and Netflix, but that's simply not the case. Instead, here are five stocks our analysts feel could provide 30-somethings with outstanding long-term results. John Maxfield: If there's one stock everyone in their 30s should own, it's a low-cost, broad market exchange-traded fund like the Vanguard S&P 500. While trading in and out of stocks seems awesome and a great source of conversation fodder for your spouse's employer's holiday party (which, just short of being tarred and feathered, has got to be one of the most dreadful ways to spend an evening), it's also one of the most effective ways to unburden your wallet. It's beyond dispute that the majority of humans are horrible investors. Greed incites us to buy stocks when they're high; fear then makes us capitulate and sell when stocks are low. Suffice it to say that there are better ways to build wealth. One such tactic is to simply dollar-cost average into the Vanguard S&P 500. It tracks the biggest and best companies in America, and it does so at a fraction of the cost of paying a financial advisor to manage your money. Matt Frankel: While you're in your 30s, you still have a long time to pursue investment growth -- but that doesn't mean that you should take unnecessary risks with your money. One stock that offers the best of both worlds is Realty Income Corporation. Realty Income is a REIT that specializes in free-standing retail properties, and there are a few reasons its business model is safe and profitable. First, the majority of Realty Income's tenants are service-based (think fitness centers, for example), sell non-discretionary products (drug stores and convenience stores), or offer goods at a low price point (dollar stores) -- and many are of investment-grade credit. A sampling of the company's largest tenants includes Walgreens, FedEx, Dollar General, and AMC Theaters. Second, Realty Income's tenants sign long-term leases of 15 years or more, and sign "net" leases. This means that the tenants are responsible for expenses such as property taxes, building insurance, and maintenance. All Realty Income has to do is acquire a property, find a tenant, and (in most cases) enjoy years of worry-free income. This business model has worked great for shareholders in the past, producing 17.4% average annual total returns over the past 20 years. There is no guarantee that past performance will repeat itself, but since the company has used the same business model successfully in good times and bad since 1969, there is no reason to believe it won't continue to perform well. Just to put this kind of performance in perspective, consider that a $10,000 investment compounded at 17.4% for 20 years would be worth more than $247,000. After 30 years, it would be worth $1.2 million. That's why 30-somethings should own Realty Income. Jason Hall: I'm in my 30s, and I'll offer up a stock that's one of my core holdings: Hain Celestial Group. On the surface it may sound dumb to buy the company best known for Celestial Seasonings teas; not exactly a growth business, right? But as the saying goes, "assumption is the mother of stupid mistakes, and the cousin of stupidity." Okay, I made that up. But it's true. Failing to dig beneath the surface could mean passing up on what may well be one of the great food growth companies of the next few decades. Founder and CEO Irwin Simon has taken full advantage of the secular shifts that are changing the packaged foods business. Consumers are moving away from traditional packaged foods, driven by health concerns over high-sugar, high-fat processed foods and artificial ingredients. People are demanding more organic and natural products, and Hain is reaping the rewards. The company's brands are a veritable "who's who" in growth categories, including milk alternatives, Greek yogurt, nut butters, snacks, packaged salads, and even poultry. Last quarter, it had 10 different brands grow sales more than 10%, and that's not an aberration. Over the past 18 years, sales have grown 10% or more every year. The bottom line is this: Simon has done a remarkable job expanding the company through organic growth and acquisition for years, and the company is still relatively small, with sales of less than $2.6 billion over the past year. This long-term shift in consumer demand is still young. Now's a fantastic time to invest in what could be a market-destroying investment for years to come. Selena Maranjian: The companies you buy in your 30s should be powerful growth drivers in your portfolio for decades. Here's a solid contender: Google. Naysayers might worry about the competition it faces from the likes of Facebook and others, and about its relative weakness in mobile advertising and social media, but there's much more to like about Google than to dislike. Consider its last quarter, which offered revenue growth of 11% year over year, while aggregate paid clicks, the primary driver of critical ad sales, jumped 7%. Google's 2006 acquisition of YouTube has been paying off well, with users spending 60% more time on it in the last quarter than a year earlier, and the channel boasts more viewers aged 18-49 than any U.S. cable network. Analysts at Jefferies & Co. estimate that the online video ad market might total $17 billion by 2017, with YouTube a prime beneficiary. Bulls are excited about initiatives such as Google's new wireless plan, cloud-computing sales, and Google Play, not to mention the company's dominant Android operating system. International growth will also be a significant growth driver, and who knows -- some of its seemingly out-there investments, such as self-driving cars and glucose-sensing contact lenses, could pay off well, too. Google even offers the hope of a dividend, as it's sitting on more than $70 billion in cash and generating billions in free cash flow quarterly. New and experienced CFO Ruth Porat has many hopeful that the company will rein in spending and demonstrate more financial discipline -- reflected already by a major slowdown in hiring. Google is an engine with many cylinders, and it's been firing on most of them lately, with great potential for continued growth. Dan Caplinger: Two major trends have made people around the world more health-conscious: the general aging of the population of many major industrialized nations, and advances in technology that make it easier for ordinary people to track their fitness and activity levels. Nike has made itself a key player on both fronts, with footwear and apparel that combines cutting-edge functionality with brand awareness that customers have demonstrated for decades. Iconic endorsements from basketball legend Michael Jordan and a host of other athletes throughout the sports world give Nike the credibility it needs to attract customers. On the technology front, Nike's FuelBand was innovative, and even though it has stopped producing new versions of the FuelBand, Nike has envisioned high-end apparel designs that could theoretically build sensor technology into garments themselves. Competition from rivals has dramatically increased in recent years, but with the advantage of size and marketing prowess at its disposal, Nike has the ability to draw new customers of all ages as they each seek to meet their fitness needs. With demographics supporting its substantial and steady growth over the long haul, Nike's definitely a stock worth considering for anyone in their 30s with a long time frame to take advantage of the company's growth prospects down the road.Join the conversation about this story » NOW WATCH: 4 things a leader should never do


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