Regardless of how long you’ve been putting your money to work on Wall Street, the first five months of 2022 have been a challenge. Since hitting their all-time highs in early January, the 126-year-old Dow Jones Industrial Average and widely followed S&P 500 have tumbled 13% and 18%, respectively. Meanwhile, the growth-stock-focused Nasdaq Composite is off 30% from its November record closing high.
While there’s no question that big one-day moves lower in the market can be unsettling and tug at investors’ emotions, it’s far more important to recognize the history behind these moves. Namely, that crashes, corrections, and bear markets are an inevitable part of the investing cycle, and that over time, they’ve always (eventually) been wiped away by a bull market rally.
Going shopping during steep corrections and bear markets offers investors the opportunity to buy innovative growth stocks that can deliver transformational wealth…with some patience, of course. What follows are five examples of growth stocks with supercharged return potential that can, over many years or decades, put investors on a path to complete financial independence.
The first innovative growth stock that’s been clobbered during the downturn is identity-verification solutions company Okta (OKTA 5.97%).
Okta has been punished for its near-term forecast, which calls for more losses, as well as the nosebleed premium to sales that the company’s shares were once valued at. But that’s all history as of now.
What makes Okta such a no-brainer buy is the evolution of cybersecurity software from optional to a basic necessity. With businesses accelerating the shift of data online and into the cloud in the wake of the pandemic, third-party providers like Okta are being leaned on more than ever to recognize and respond to potential threats. Since Okta operates a cloud-native platform and leans on artificial intelligence (AI), it should be able to thwart attacks more effectively than on-premises solutions. This efficacy is what can sustain a 20% (or higher) annual growth rate, as well as desensitize the company to recessions and economic pullbacks.
Additionally, investors should be excited about the Auth0 acquisition, which closed last year. Aside from gobbling up a competitor, Okta’s purchase of Auth0 opens the door for Okta to spread its wings internationally. This overseas growth should come in handy in the latter half of the decade, which is when Europe should be well past the inflationary, supply chain, and geopolitical issues currently haunting the region.
Another company that offers transformational wealth to long-term investors is cloud-based, small-cap adtech stock <…….