5 Growth Stocks That Can Build Generational Wealth by 2040 – The Motley Fool
Regardless of whether you’ve been putting your money to work on Wall Street for decades or began investing within the past couple of years, it’s been a trying year.
Since the green flag waved on 2022, the widely followed Dow Jones Industrial Average and broad-based S&P 500 dipped into correction territory with respective declines of more than 10%. It’s been an even wilder ride for the growth stock-driven Nasdaq Composite, which endured a peak-to-trough decline of 31% since hitting a record-closing high in November. This squarely places the Nasdaq in a bear market.
Although bear market drops can be scary and cause investors to question their resolve, they’re also, historically, one of the best times to put your money to work. Data shows that most stock market corrections resolve quickly, with bull markets lasting disproportionately longer than bear markets.
If your goal is to build generational wealth, right now is the perfect time to go shopping for innovative growth stocks that can, over time, put you on a path to financial freedom. What follows are five growth stocks fully capable of building generational wealth by 2040.
The first rapidly growing company with the tools needed to compound an initial investment many times over by 2040 is China-based electric vehicle (EV) manufacturer Nio (NIO 6.08%). Despite facing a number of near-term supply chain headwinds tied to China-based COVID lockdowns and semiconductor chip shortages, Nio has demonstrated that it can lead with its innovation.
Before provincial lockdowns impacting the company’s supply chain, Nio had boosted production from fewer than 4,000 EVs in a quarter to north of 25,000 EVs in under two years. What’s more, it’s producing an array of premium EVs that are designed to take on the industry’s “big boys,” like Tesla. The recently launched ET7 and upcoming ET5 sedans can, with the top battery upgrade, go 621 miles on a full charge. That handily beats Tesla’s flagship sedans, the Model 3 and Model S.
Aside from operating in the largest auto market in the world, Nio should also benefit from its innovative battery-as-a-service (BaaS) subscription, which was unveiled in August 2020. Subscribers to BaaS can charge, swap, and upgrade their batteries, as well as receive a discount on the initial purchase price of their Nio EV. In return, Nio nets a monthly, high-margin subscription fee and, more importantly, locks in the loyalty of its early buyers. The BaaS program could allow Nio to become one of China’s premier auto makers by the end of the decade.
Another growth …….