If there's one lesson the stock market teaches time and again, it's the importance of patience and seeing your investment thesis through over the long run. For instance, even though the benchmark S&P 500 has undergone 38 double-digit percentage declines since the beginning of 1950, each and every one of these drops was eventually put into the rearview mirror by a bull-market rally. A more recent example is the coronavirus crash, which featured the quickest decline of 30% in the broad-based index in history. Since hitting its trough in March 2020, the widely followed S&P 500 has doubled in value. To make serious money on Wall Street, investors need to recognize that time is their ally. If becoming a millionaire is one of your financial goals, it's perfectly doable within 15 years, if not sooner, if you put $100,000 to work into the following high-growth stocks and don't sell. Image source: Getty Images. Teladoc Health The single biggest driver of life-altering …
3 Reasons Your Retirement Investments Are Lagging the Stock Market
The S&P 500 has shown amazing growth in the past two years -- nearly 30% in 2019 followed by about 14% in 2020. To put that in perspective, if you applied those growth rates to a $100,000 balance, it would grow to nearly $150,000 in two short years. And that's without accounting for your ongoing contributions. That type of growth can give you a nice push toward reaching your retirement savings goals. If you're not seeing those strong growth rates in your retirement account, though, it's time to find out why. Here are three common reasons why your retirement investments could be lagging the stock market. 1. You're too conservative Your portfolio might be underperforming because your mix of investments across stocks, bonds, and cash is too conservative. Your age is an important factor here, because what's too conservative at age 25 might be just right at age 55. There's an easy formula to check your allocation, though. Simply subtract your age from 110 -- the answer is …
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Why Invest in a Non-Deductible Traditional IRA?
Qualified retirement accounts are a great way to invest for your retirement. In all cases, the money you invest in those types of plans can grow tax-deferred while it is in the plan. In addition, in some cases, you get a deduction for contributing to the plan while in others, you can take qualifying withdrawals completely tax free in retirement. In one type of plan, however, the non-deductible Traditional IRA , you get neither a tax deduction for contributing nor the ability to take tax free qualifying withdrawals. To make matters worse, when you withdraw money from that type of plan, your gains are taxed as ordinary income , removing the benefits of long-term capital gains tax rates in standard brokerage accounts. That raises a key question: Why invest in a non-deductible Traditional IRA at all? Image source: Getty Images. A backdoor way to the Roth IRA One key reason people still contribute to non-deductible Traditional IRAs is the fact that they can use that …
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You’ve Only Got 75 Days Left to Make These 3 Retirement Moves
It's hard to believe we only have 75 days until we'll be ringing in 2022. You might be wondering how 2021 got away from you so fast. I know I am. But there's still time to cross a few things off your annual to-do list. Here are a few retirement moves you might want to make your top priority. 1. Contribute to your 401(k) While you can make prior-year IRA contributions up until the April tax deadline, you must make all your 2021 401(k) contributions by the end of the year. That's because your 401(k) contributions come directly out of your paychecks, rather than from savings you contribute on your own schedule. Image source: Getty Images. You're allowed to contribute up to $19,500 to a 401(k) in 2021 or $26,000 if you're 50 or older. If you're not there yet, do your best to contribute as much as you can over the remaining weeks. This is especially important if you qualify for a 401(k) match but haven't contributed enough to meet the full match amount. Talk to your …
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Don’t Buy MercadoLibre for Its E-Commerce Business, Buy It for This Instead
E-commerce giant MercadoLibre ( NASDAQ:MELI ) has spent two decades steadily building its e-commerce marketplace and logistics network to become the leading retailer in Latin America. The stock has rewarded investors with a 2,500% gain over the past decade. The company's growth runway remains intact for its e-commerce business, but it's no longer the only star of the show. Its fintech business could be what drives returns on the stock in the future; here are two reasons. Image Source: Getty Images 1. Banking infrastructure is lacking in Latin America The financial infrastructure in Latin America is underdeveloped compared to more mature markets like the United States. While roughly 95% of U.S. households have banking services, countries throughout Latin America still lack banking access. Banking penetration rates are under 90% throughout the region, led by Brazil at 88%, but countries like Argentina, Columbia, and Mexico lag far behind. MercadoLibre's Mercado Pago …
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2 Stocks to Consider for E-Commerce and Digital Payments Growth in Latin America
StoneCo ( NASDAQ:STNE ) and MercadoLibre ( NASDAQ:MELI ) are leaders in the e-commerce and digital payments spaces in Latin America. Their stocks have not performed particularly well this year, though -- but that doesn't mean they won't be long-term winners. In this Motley Fool Live segment from "The 5" recorded Oct. 8 , Fool.com contributors Jason Hall, Jeremy Bowman, and Nicholas Rossolillo discuss why the future still looks bright for both tech firms. Jeremy Bowman: Let's talk about what your favorite international stock -- your favorite non-U.S. stock -- is right now. Nick, let's go to you. Nicholas Rossolillo: I don't have to defer for that long. [laughs] You asked about StoneCo. Man, what a disaster. Let's preface my pitch here with a chart that you never want to see. StoneCo, since they went public in late 2018, a pretty good run through the first month or two of 2021, and then, the last year-to-date has just been a disaster. You don't want to see …
5 Traits to Chase in the Hunt for 10X Stocks
We all dream about stocks that turn a modest investment into life-changing wealth. But for many, it stays a dream; there are thousands of publicly traded companies, and it's so hard to find the one that's the next Amazon , let alone find it before the whole world already knows about it. But there are lessons we can take from the stocks that did go on to become the dominant companies we idolize. Here are five traits that I've found most stocks to have that go on to 10X returns and beyond. 1. A founder at the helm The founders of the world's greatest companies are nearly celebrities in their own right. Jeff Bezos and Amazon, Mark Zuckerberg and Facebook , Elon Musk and Tesla . Founders are builders, and a high-quality business is a reflection of its leadership. I would argue that a company's management is its most important trait. Image Source: Getty Images. A study by Brain & Company tracked stocks of founder-led companies from 1990 through 2014 and found that …
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3 Solid Growth Stocks Perfect for Retirees
Retired investors may recoil at the mere mention of the word "inflation," because it means the money they've accumulated in their portfolios will buy less and less of the services and items they need. That's one reason why it's important to have some exposure to growth stocks in your portfolio -- they can help counter inflation's erosive impact on the value of your nest egg. To that end, we asked three savvy Motley Fool contributors to recommend growth stocks that they think would be smart additions to any retirement portfolio. Here's why they view Abbott Laboratories ( NYSE:ABT ) , Facebook ( NASDAQ:FB ) , and Rent-A-Center ( NASDAQ:RCII ) as great choices to consider buying now. Image source: Getty Images. A potent mix of income and growth Eric Volkman (Abbott Laboratories): For a great retirement portfolio stock, let's duck into the laboratory -- Abbott Laboratories, that is. A healthcare company with roots going back more than 130 years, …
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Where Is IBM Headed Following Its Spinoff of Kyndryl?
Over the last year, IBM ( NYSE:IBM ) shareholders have been getting a slow drip of information about the planned November spinoff of its managed infrastructure business into a new publicly-traded company that will be called Kyndryl. Recently, the storied tech firm provided more details on how it will operate once Kyndryl is sent on its merry way. The new IBM won't be an exciting high-growth company. Still, it will be rejuvenated enough that its stock will be worth another look, especially for investors who are interested in assets that offer a balance of gradual growth and income too. Image source: Getty Images. Getting out of the low-margin managed infrastructure business Corporate spinoffs -- where a company divests itself of one or more of its operating segments -- can be fantastic events for shareholders in aging businesses. Once IBM packages up its managed infrastructure services unit and launches it as an independent public company in November, IBM shareholders …
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3 Surefire Ways to Increase Retirement Savings
Investing for retirement is crucial for your future financial security since Social Security likely can't fully cover your costs after you stop getting paychecks. Unfortunately, many Americans are behind on funding their nest egg and with good reason -- putting aside money for the distant future can be difficult when you have today's expenses to think about. The good news is, there are a few surefire ways to increase the amount you're saving for retirement. Here are three of them. Image source: Getty Images. 1. Automate your investments Making your retirement investments automatic is one of the easiest and most effective ways to increase the amount you're saving. That's because once you set up an automatic contribution to your retirement plan, chances are good you aren't going to go through the trouble to change it. This status-quo bias can make retirement savings effortless. Setting up automatic investments is really easy with a 401(k) as you just talk to the plan …
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