If you were able to identify in advance the rare stocks that could turn $1,000 into a cool million, you wouldn’t have to do much to be set for life. But no one has a crystal ball, which is why diversification is just as important as picking top stocks. There are all sorts of factors that could send any given stock plummeting or skyrocketing, and you can never know which ones will carry the day (or week, or month, or year).
The hard part of investing isn’t necessarily coming up with the funds to invest or agonizing over corporate financial statements. Often, the hardest part is maintaining the fortitude to hang on to your investments through the tough times and let the magic of compound growth do its work.
Consider Amazon (NASDAQ: AMZN), Walmart (NYSE: WMT), and Home Depot (NYSE: HD). Each of these stocks has had major downswings at times, but if you’d invested $1,000 in any of them when they went public, you’d have more than $1 million today.
The Amazon of e-commerce
Amazon’s overall returns have been some of the highest in the history of the stock market. If you’d invested $1,000 in Amazon stock at the time of its initial public offering (IPO), you’d have almost $1.9 million today.
AMZN Chart
As you can see in the chart, that includes a major downturn in 2022, in addition to other bumps along the road. What’s happening today? Amazon is still reporting double-digit percentage growth, a truly remarkable feat given the size of the base it’s building on. Even more, it still has incredible opportunities in artificial intelligence on top of strong potential in its core e-commerce business.
The largest retailer in the world
Walmart isn’t a growth stock anymore, but even though it keeps looking like Amazon is growing fast enough to take over as the world’s largest retailer, the e-commerce powerhouse hasn’t been able to knock it from the top spot. The discount chain is still growing at about mid-single-digit percentage rates, which is truly impressive considering its gargantuan size. Walmart has been a public company a lot longer than Amazon, and if you’d invested $1,000 in…
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