Nearly everybody would like to retire rich. It’s not an unrealistic goal for many Americans. There are multiple approaches that could help achieve the goal.
Do you want $1 million in retirement? One way to potentially make it happen is to invest $250,000 spread equally across these three stocks and wait a decade.
1. Brookfield Renewable
Brookfield Renewable (NYSE: BEP) (NYSE: BEPC) believes that it can generate total returns of between 12% and 15% per year over the long term. If the renewable energy leader hits the upper end of that target, an initial investment now will quadruple within the next 10 years.
But can Brookfield Renewable really deliver an average annual total return of 15%? I think so. It’s given investors a 16% average annual total return since 1999. The stock is also off to a great start so far in 2023, soaring more than 20%. My view is that Brookfield Renewable boasts one of the clearest paths to growth you’ll find.
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The demand for renewable energy sources will almost certainly increase significantly in the coming years. Governments and corporations are scrambling to reduce carbon emissions. Onshore wind and solar are already more cost-effective than coal and gas for generating electricity.
Brookfield Renewable is ready to meet that demand. Its development pipeline capacity of 110 gigawatts is more than 4x the size of its current capacity.
2. Outset Medical
You might be hesitant about investing heavily in Outset Medical (NASDAQ: OM). The company, which makes hemodialysis machines, isn’t profitable yet. Its stock has plunged more than 30% year to date. However, I think that Outset Medical is arguably the best growth stock under $20 per share on the market right now.
The important thing to understand about Outset is its huge opportunity. The company is going after a total addressable market of $11.4 billion. Capturing only 10% of this market would likely boost Outset’s valuation by more than 5x.
I believe that Outset could snag an even higher market share over the next 10 years. How? Roughly $8.9 billion of its addressable market is in home dialysis. This is a greatly underpenetrated market, primarily because of the limitations of previous dialysis technology and reimbursement barriers for the adoption of home dialysis.
Outset’s Tablo dialysis system eliminates all of the problems associated with older systems. The U.S. government is also now providing financial incentives for shifting dialysis care to homes.
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3. The Trade Desk
Since the beginning of 2020, shares of The Trade Desk (NASDAQ: TTD) have soared 130%. A nice chunk of that gain has come just this year. I predict that this advertising technology leader will be one of the biggest monster stocks of the decade.
The Trade Desk’s online platform enables advertisers and advertising agencies to easily buy ads on a wide variety of digital outlets. Its Unified ID 2.0 (UID2) technology is also rapidly becoming the standard alternative to cookies in helping advertisers target personalized ads to consumers without violating the consumers’ privacy.]
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Connected TV (CTV) stands out as the biggest opportunity for The Trade Desk. The growing number of ad-supported TV streaming services has made The Trade Desk’s platform more attractive than ever. And CTV allows advertisers to market to specific types of consumers more effectively than ever.
The Trade Desk also has a major opportunity outside the U.S. Currently, only around 10% of the ad spend on the company’s platform comes from international markets. But nearly two-thirds of global ad spending is outside of North America.
An important disclaimer
Can you actually invest $250,000 divided equally in these three stocks and wind up with $1 million in just 10 years? I think it’s quite possible. However, here’s an important disclaimer: Success isn’t guaranteed with these stocks (or any other stocks, for that matter.)
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Because of the risk that things could go wrong, the smartest retirement strategy is to have a diversified portfolio. Don’t put all of your eggs in one basket — or in just three baskets. That said, I think that Brookfield Renewable, Outset Medical, and The Trade Desk are great baskets to include in the mix if you’re looking for big returns over the next decade.
