These stocks could potentially offer investors a life of luxury.
Investing is much like cooking; having a great recipe doesn’t guarantee success, but it certainly sets you on the right path. With that idea in mind, let’s craft a hypothetical $50,000 investment portfolio.
Walmart: The Foundation
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To start, I’m allocating $20,000, or 40% of the portfolio, to Walmart (WMT).
While researching some of the largest companies in 2009, I found that only one of the top five by revenue remains in the top five today: Walmart. This alone speaks to the company’s incredible resilience.
Over the past 15 years, the retail landscape has drastically evolved with the rise of e-commerce, but Walmart hasn’t just survived, it has thrived. Over the last 12 months, Walmart generated more than $665 billion in sales, ranking first among American companies. Since 2009, Walmart has grown its sales by 65%, largely due to its expansion into e-commerce.
In its most recent quarter, which ended July 31, Walmart reported $115 billion in U.S. sales, with nearly $19 billion—about 17%—coming from online orders. E-commerce growth has exceeded 20% in five of the past six quarters, positioning Walmart to potentially remain among the top five largest American companies by revenue for years to come.
Duolingo: Adding Some Spice
Next, I’m allocating $5,000, or 10% of the portfolio, to Duolingo (DUOL).
I’ve taken inspiration from legendary investor Peter Lynch, who advised people to “buy what you know.” With Duolingo, I’m following that advice because I’m familiar with the company and its product.
Duolingo offers a language-learning app, available for free on smartphones and other devices. However, it’s no ordinary app. Its gamified structure makes language learning feel more like playing a video game, which keeps users engaged.
The numbers speak for themselves: In the most recent quarter (ending June 30), Duolingo reached over 100 million monthly active users, with 8 million paying subscribers—an impressive 52% increase from last year. This user growth has translated into strong financial performance. Revenue for the quarter grew 41% year over year to $178 million, and net income reached $24 million, more than six times what it was a year ago. Analysts expect the company’s revenue to hit $950 million next year, an increase of about 29%.
By allocating 10% of the portfolio to Duolingo, I’m adding some excitement and potential high growth to my investment mix.
Microsoft: The Powerhouse
Finally, I’m allocating $25,000, or 50% of the portfolio, to Microsoft (MSFT).
Why so much in Microsoft? It’s simple: Microsoft is a world-class company led by great leadership in a rapidly expanding industry. Known for its software products like Office and Windows, Microsoft has diversified its business into gaming and cloud services.
Under the leadership of CEO Satya Nadella, who has been at the helm for over a decade, Microsoft’s stock has surged by over 1,300%, giving it a compound annual growth rate of 28.4%, more than doubling the return of the S&P 500 over the same period.
Even more exciting is Microsoft’s future. As a leader in artificial intelligence (AI), Microsoft’s partnership with OpenAI, the creator of ChatGPT, is already driving innovation, with AI features being integrated into its flagship software products.
By committing half of my portfolio to Microsoft, I’m confident in building a strong foundation with a company that has consistently outperformed the S&P 500 and is poised for even more growth in the coming years.
Final Thoughts
This $50,000 investment recipe is built around a solid mix of steady growth, exciting potential, and long-term value. Walmart’s resilience, Duolingo’s rapid user growth, and Microsoft’s dominance in tech and AI make for a well-rounded portfolio that could potentially lead to significant returns over time.
Source: The Motley Tool