Editor’s Note: This article is a part of our “Top Grad Stocks 2021” series, where our savvy market analysts recommend their best picks for new graduates’ portfolios. Check out “Money Moves for Recent Grads” for more finance advice and click here to see more stocks for your must-buy list.
Congratulations, you graduated college! You likely learned several key lessons, such as how to write a paper in just a few hours before the deadline and which cheap alcohol actually tastes good. However, chances are you feel unprepared when you look ahead to the future. How do you land the perfect job? Decide on employer-sponsored benefits? Fill a portfolio with winning investments?
For new grads, making investing decisions with the long term in mind is particularly hard right now. Retail investors are focused on meme stocks like GameStop (NYSE:GME) and speculative cryptocurrencies like Dogecoin (CCC:DOGE-USD). While you certainly might make a lot of money betting on these high-risk plays, they may not hold up in five or 10 years.
Luckily, InvestorPlace pros are ready to help! Their top grad stocks include defense equities, durable cryptos and growth-focused companies. With their help, you will be able to ace this next chapter of life.
In no particular order, here are the seven top investments InvestorPlace pros are recommending for new grads in 2021:
- Target (NYSE:TGT)
- Amazon (NASDAQ:AMZN)
- PayPal (NASDAQ:PYPL)
- Lockheed Martin (NYSE:LMT)
- Apple (NASDAQ:AAPL)
- Litecoin (CCC:LTC-USD)
- Disney (NYSE:DIS)
Top Grad Stocks 2021: Target (TGT)
Investor: David Moadel
For new college graduates, the last year and a half have been anything but stable. Universities dealt with navigating Covid-19 and the challenges of pursuing remote and hybrid learning. Internships went on pause for the summer. Students struggled to find jobs. Up until a few weeks ago, many students were not sure they would even have a traditional graduation ceremony in 2021.
As InvestorPlace contributor David Moadel highlights, the story for Target in 2021 is the opposite. Instead of experiencing volatility, Target proved that it was stable.
For new investors, that makes Target quite an appealing option for the long term. Moadel writes that unlike penny stocks and meme stocks, Target is a company investors can add to their portfolios and forget about. Through thick and thin, the retailer will continue to deliver, and pay dividends.
Dreading adding an old-school name to your account? Think twice. Although Target is a defensive stock that benefits from its wide network of brick-and-mortar stores, it also offers growth. In the last year, Target saw its e-commerce sales soar 145%.
Investor: Dana Blankenhorn
School may be out for the summer, but buying shares of Amazon stock is a lifelong learning opportunity. At least, that is how InvestorPlace contributor Dana Blankenhorn tells it.
Amazon is a stock that truly encompasses everything, meaning that it will give new investors exposure to several accelerating themes. The company obviously plays a dominant role in e-commerce, but it also leads in streaming and cloud computing. Its endeavors in telemedicine, pharmacy services and grocery retail also merit a closer look.
But beyond that, Blankenhorn sees Amazon as a lesson in corporate evolution.
If you buy Amazon now, he is betting that it will look different several years from now, and not in a bad way. The company will continue to grow and shift its resources into different verticals. In just a few weeks, CEO Jeff Bezos will step down from the helm. When Andy Jassy takes the lead role, he could split up the company, split the stock, or do something else entirely. No matter what, investors will get to navigate changing times.
Scared of the high share price? With Amazon trading for more than $3,000 a share, it’s not exactly kind on new-grad pocketbooks. However, Blankenhorn recommends pursuing fractional investing options on Robinhood or other platforms.
Top Grad Stocks 2021: PayPal (PYPL)
Investor: Tezcan Gecgil
New grads certainly are familiar with PayPal and its Venmo service. However, they may not know that PayPal is one of the best investments they can make now.
As InvestorPlace contributor Tezcan Gecgil writes, PayPal stands out when looking to the long term thanks to its reach in fintech. Financial technology, or fintech, is a theme that continues to accelerate on Wall Street. Investors are betting on companies that promise to disrupt financial institutions and cut out the middlemen. These businesses, like PayPal, make transactions easier. That convenience factor will help PYPL survive and thrive.
What will thriving look like? Right now, PayPal has about 400 million active customers, and its average user transacts with PayPal 40 times a year. It already is the most popular online payment service in the United States.
Plus, as Gecgil writes, PayPal still has a key avenue for growth. The company has embraced cryptocurrencies, rolling out features that allow consumers to transact in Bitcoin (CCC:BTC-USD), Ethereum (CCC:ETH-USD), Litecoin and Bitcoin Cash (CCC:BCH-USD). PayPal and Venmo also just announced that they will enable withdrawals to third-party wallets.
Lockheed Martin (LMT)
Investor: Bob Ciura
Graduation can be a volatile time, which is why Bob Ciura thinks Lockheed Martin is one of the top grad stocks to buy. Just as the aerospace and defense company seeks to protect the nation, LMT stock offers portfolio protection.
For those unfamiliar, Lockheed Martin is the largest name in this sector. The company is responsible for key defense innovations such as the F-35, F-22 and F-16 military aircraft. It also has leading contributions in missile systems and space satellites. Historically, demand for these industries has held steady, giving Lockheed Martin the ability to power through tough times. In fact, Ciura highlights that Lockheed Martin also has a strong track record with its dividend.
One more thing: Lockheed Martin may be cashing in on its innovations, but Ciura also sees a real path for continued to growth. Over the last five years, government spending on defense has increased by 25%. That pace is not likely to slow, and Lockheed is in a key position to take advantage of that.
All in all, LMT stock looks like another solid long-term buy that will pay you to hold it.
Top Grad Stocks 2021: Apple (AAPL)
Investor: Will Ashworth
Everyone says an apple a day keeps the doctor away. InvestorPlace contributor Will Ashworth agrees, and he also thinks that Apple stock can help keep losses away from your portfolio.
For new grads, that is a pretty appealing quality to find in an investment.
So why is Apple one of the top grad stocks for 2021? Ashworth argues that the bull case for Apple rests in the popularity of its products. Its consumer electronics are nearly ubiquitous, and each new iteration of its products, from laptops to smartphones to wireless earbuds, has been met with high demand. This demand is especially present with younger consumers, who rely more on their personal tech devices.
Therefore, Ashworth sees Apple stock as a way for investors to pay themselves first. They can invest in something that they see, know, and use. Then, they can benefit from its continued growth and future products and services.
Need more convincing? Warren Buffett is one of the largest shareholders in AAPL stock. Considering the influence that the Oracle of Omaha has on Wall Street, that’s a pretty good sign.
Investor: Tezcan Gecgil
In case you didn’t notice, the cryptocurrency market has been red-hot this year. With that in mind, InvestorPlace contributor Tezcan Gecgil says new grads would be wise to diversify their portfolios with some top-notch cryptos.
Her pick in this space is Litecoin, which has a market capitalization of nearly $13 billion and claims the No. 14 spot on CoinMarketCap. This size and ranking is important — it carries with it a sense of legitimacy and staying power that not all cryptos have.
Beyond that, Gecgil thinks that Litecoin truly has competitive advantages in the crypto market.
Litecoin is one of many Bitcoin forks. It spun off in 2011 under the guidance of Charlie Lee, a former employee of Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), the conglomerate that is the parent company of Google. As its name implies, Litecoin is a lite version of Bitcoin. It functions very similarly, but its transaction speeds are much faster and much more cost effective. This makes it very appealing for users who prioritize speed and are not looking to pay the high transaction fees found on other blockchains.
Additionally, thanks to its size and relationship to Bitcoin, Litecoin is one of the most accessible cryptocurrencies. Users can transact with it through thousands of merchants, and it is available on crypto exchanges like Robinhood and Coinbase (NASDAQ:COIN).
Top Grad Stocks 2021: Disney (DIS)
Investor: Chris Markoch
You may just be graduating college, but InvestorPlace contributor Chris Markoch recommends thinking ahead. Other life transitions, such as getting married and having children, will influence how you invest.
However, Markoch says that there are some stocks that are relevant no matter where you are in life, and Disney is one of them. Right now, the company appeals to consumers young and old. Its theme parks and hotels have a long and iconic history. It also has its Disney+ streaming service with shows like The Mandalorian that have hooked audiences.
Granted, Disney proved in 2020 that even some of the best stocks do not come without risk. Covid-19 weighed on many of its businesses, including theme parks and streaming. Disney persevered though, and is leveraging pent-up demand as the country reopens. That means in the short term, investors can cash in on the recovery story.
In the long term, Markoch is betting that Disney will become part of your life in a different way, especially if you choose to have children. Your money in DIS shares will come to represent a family pastime, and make any gains that much sweeter.
So what is the bottom line? The House of Mouse may not be perfect, but all roads do seem to lead to Disney World. For investors, that is a compelling investing thesis.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Sarah Smith is the Editor of Today’s Market with InvestorPlace.com.