Editor’s note: “10 Stocks to Buy for Your 10-Year-Old” was previously published in April 2020. It has since been updated to include the most relevant information available.
With the markets still shakey from the novel coronavirus, it’s very difficult to predict the day-to-day movements. On the other hand, figuring out which stocks to buy for your ten-year-old is a much easier task. That comes from the confidence that over time, many well-positioned companies will benefit from shifting social dynamics.
Overall, the biggest change that we’ll see is the continued rise and proliferation of digitalization. Of course, we see this impact through e-commerce, which has steadily taken share of total retail sales in the U.S. Just as importantly, digitalization has transformed the way we work via innovations such as cloud computing.
Within the technology realm, I forecast several stocks to buy running higher on the gig economy. The concept of the tethered, nine-to-five schedule is gradually losing relevance. Increasingly, work-life balance ranks highly among young professionals. Plus, with the aforementioned innovation of cloud computing, telecommuting is now easier and more sensible than ever.
On a related note, advancements in tech should allow more people to participate in the digitalized economy. Thanks to incredible progress in mobile payment processors, small companies are able to compete with larger rivals. Therefore, stocks to buy which feature underlining businesses that harness the power of the information age will likely jump higher.
Despite drastic changes, some things will always stay the same. As the coronavirus proves, people will still get sick. And no matter what, people require downtime to refocus and re-energize. Here are the 10 stocks to buy for your ten-year-old.
- Amazon (NASDAQ:AMZN)
- Uber Technologies (NYSE:UBER)
- Fiverr International (NYSE:FVRR)
- Square (NYSE:SQ)
- PayPal (NASDAQ:PYPL)
- H&R Block (NYSE:HRB)
- Splunk (NASDAQ:SPLK)
- American Outdoor Brands (NASDAQ:AOBC)
- Teva Pharmaceutical (NYSE:TEVA)
- Disney (NYSE:DIS)
In this article, I’ve tried to create an eclectic list of companies that should be relevant over the next decade or so.
Stocks to Buy for Your 10-Year-Old: Amazon (AMZN)
After screaming to all-time highs, the coronavirus outbreak took the wind out of e-commerce giant Amazon’s sails — for a while. It has already sharply rebounded off its coronavirus lows. And I’m confident in AMZN stock longer term.
No health crisis can overcome the power of human ingenuity, which is what Amazon is.
In the fourth quarter of 2019, e-commerce represented 11.4% of total retail sales in the U.S. I’m not entirely sure what this allocation will be in 2030. Suffice to say, though, that it will be substantially higher. Like Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google, Amazon has become part of the social lexicon. That bodes very well for Amazon stock.
Another reason to keep this behemoth on your list of stocks to buy is that Amazon is disrupting everything it can. From the cloud to healthcare to groceries, Amazon’s footprint is everywhere. Sure, that ruffles some folks’ feathers. But if you can’t beat ‘em — and no, you can’t beat Amazon — you might as well buy their stock.
Uber Technologies (UBER)
For one reason or another, Uber manages to find itself in the news frequently. Of course, some of it is not for particularly great reasons.
For one, many have blasted the company for harboring an aggressive and toxic work culture. And its relationship with its drivers is not always mutually agreeable. Nevertheless, UBER stock is a name to keep in mind over the long haul.
Primarily, the company has managed to upend the taxi industry. Frankly, it’s about time someone did. Taxis are expensive and service is variable, from professional to downright fraudulent. And that variability can be truly unpredictable abroad.
The beauty of UBER stock is that the underlying business consolidates riders and drivers under a mutually beneficial relationship: if either party acts up, that could spell a loss of convenience or income.
Further, the Pew Research Center indicates that a sizable number of Americans are trying ride-sharing platforms. Given that Uber has the largest footprint in the space, I believe Uber stock is an easy pick among stocks to buy.
Fiverr International (FVRR)
I’d like to give a shout out to my fellow InvestorPlace colleague Laura Hoy for turning me on to Fiverr.
One of the direct plays toward the gig economy, FVRR stock is a somewhat speculative idea. However, if you’re building a portfolio of stocks to buy for the long haul, my reservations for the underlying company fade quickly.
Prior to the surge of independent gig workers, many professionals sought the assistance of traditional employment agencies such as Robert Half International (NYSE:RHI). Here, the concept focused on large, networked organizations marketing talent to their client corporations. If a match was found, the talent would typically find themselves working as a full-time employee.
But that model is becoming less relevant today. Instead, we have Fiverr, which connects gig workers to businesses that require work completed via short-term contracts.
Over time, I see Fiverr working out its kinks — such as exposure to too many low-quality jobs. In the meantime, I think a long-term speculative bet on FVRR stock is warranted given where our society is headed.
If you’ve followed my work for some time, you’ll know that I’m generally very bullish on Square. Therefore, when I witnessed the sizable hit to SQ stock due to coronavirus fears, I was not alarmed.
I’ll go a step further. Because Square appears technically vulnerable, shares are liable to fall more. Even so, put Square on your list of stocks to buy for your 10-year old.
Most people are familiar with Square due to its now-ubiquitous payment processors. Right here, the company demonstrated its true intent: to disrupt the payments space and level the playing field for small businesses.
With their innovations, entrepreneurs received a viable alternative to inking a less-than-favorable contract with a traditional payment-services provider.
But the driving force behind SQ stock is its development of a small-business ecosystem. It’s not a stretch to say that most entrepreneurs hate the day-to-day administrative BS: they’d rather focus on the fundamentals that make their business distinctive. Thanks to Square’s intuitive ecosystem, small-business owners can do exactly that.
I’ve spoken glowingly about digital payments processor PayPal. Primarily, I’ve been impressed with the blistering growth rate of its active users.
It’s making a fool out of the law of large numbers. However, no one should be surprised: PayPal is incredibly convenient and is aligned perfectly with the burgeoning gig economy, bolstering the case for PYPL stock.
Over the next decade, I view PayPal as a no-brainer opportunity among tech-related stocks to buy. Yes, the market panic has severely hurt shares and more pain could follow. But no viral outbreak can unseat the progress that the underlying company has made. Unless, of course, you believe that we’ll move back to analog payments!
Another important factor to consider regarding PYPL stock is PayPal’s push to help bank the unbanked.
Due to social dynamics, not everyone can participate in the digital economy because of lack of access to the financial system. PayPal is actively bridging this gap, which gives it an ethical angle for those interested in positive social impacts.
H&R Block (HRB)
Even before the coronavirus outbreak wrecked the early positive start in the markets, tax preparer H&R Block never was a favorite among investors.
Easily, it’s one of the choppiest names you’ll encounter among New York Stock Exchange-traded equities. However, with changes to our taxes along with a shift in working culture, HRB stock may surprise down the line.
For starters, President Donald Trump administration’s tax code change wasn’t popular with many employees who felt cheated on their refunds. As a result, it’s conceivable that in the future, a liberal or progressive administration will try to make things right. If I know anything about the government, whoever’s in charge will probably screw it up.
But the more important catalyst for HRB stock is the gig economy. With many Americans making the shift from W-2 employees to 1099 workers, they will incur significant tax reporting changes. For 1099 rookies, it may be an overwhelming transition. However, H&R Block is here to help, so speculators shouldn’t ignore it when it comes to considering stocks to buy.
As we dive deeper into the information age, the commodity that is most important isn’t necessarily physical but digital. I’m referring to data.
Every day, we transmit data through the internet. Further, companies pay big money for it as it holds the key to our consumption behaviors. But making sense of all this data is a difficult task. And that’s where Splunk comes in.
While most tech firms talk about big data, Splunk consolidates vast and seemingly disparate information into actionable advice. Called the Data-to-Everything Platform, this powerful system allows Splunk’s clients to make well-informed decisions. Further, the platform facilitates real-time data acquisition, giving clients tactical capabilities. Essentially, SPLK stock runs on harnessing the potential of the digital age.
Earlier, though, I felt that SPLK stock was running a little too hot. Clearly, I was wrong when shares spiked in November of last year. However, due to the broader panic, Splunk has lost some of its momentum. This is giving investors a chance to buy on the dip.
American Outdoor Brands (AOBC)
According to Pew, America is becoming more diverse and a majority of us believe that this is a positive development.
Furthermore, Pew reports that only a very small, single-digit minority view diversity as a negative. However, I think this latter statistic is misleading because very few admit to their prejudices.
Further, we inherently know that differences — though culturally enriching — also tend to breed tension and distrust. If you don’t believe this, open your eyes to the attacks against Asian Americans due to ignorant coronavirus panic. Moreover, sociological studies have demonstrated that human differences are among the catalysts for armed conflicts. That being the case, it’s time to take a long look at American Outdoor Brands.
I think the time has come for us to have a real discussion about firearms in America. The sad reality is that we have a sickness in this country. And yes, the deranged have access to weapons. But gun control will disproportionately affect law-abiding citizens who wish only to protect themselves and their families.
The cat’s out of the bag. America will probably be a much more divided and violent country in the future, which is why AOBC stock will cynically thrive over the long haul.
Teva Pharmaceutical (TEVA)
Out of the stocks to buy on this list, Teva Pharmaceutical has endured the most difficult journey over the last five years. For starters, the healthcare system is essentially broken. Families are paying exorbitant costs while often receiving less-than-ideal care. For TEVA stock specifically, the underlying company has found itself embroiled in multiple controversies, including price gouging.
However, TEVA stock is off to a brilliant start in 2020, gaining over 34%. In fact, while the major indices printed red ink, Teva has steadily moved forward. Logically, some of the bullishness is based on the idea that the company is relatively insulated from the coronavirus outbreak. No matter what, demand for pharmaceuticals will always be strong.
And this segues into another point. Admittedly, TEVA stock is optically one of the less favorable stocks to buy right now. Over time, however, most folks will realize that the organization is a necessary evil. Our broken healthcare system will not fix itself anytime soon. But in the interim, we need access to affordable generics. Like it or not, that’s Teva’s forte.
Disney stock slipped on the broader implications of the coronavirus epidemic. But also, longtime Disney CEO Bob Iger stepped down from the top role. For someone who has frequently pushed back retirement, Iger’s move was a surprise. and it may have come too soon — as coronavirus continues to afflict the company, Iger has actually put his retirement on hold once more.
But the way I see it, Disney owns the trifecta in entertainment. First, through incredibly viable acquisitions like the Star Wars franchise, they dominate the summer blockbuster narrative. Second, through their resorts and theme parks, Disney levers an enviable physical footprint. Third, the company has made huge strides in streaming with Disney+.
Therefore, unless you think entertainment will go out of style, you can confidently bet on DIS stock.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities.