Day trading is often portrayed in a glamorous light, but the reality is much less appealing. According to a recent study, just 3% of day traders are profitable during an average year, and a mere 1.1% make more than minimum wage. So, if you want to build life-changing wealth, the first thing you’ll need is a long-term mindset. A buy and hold strategy blunts the impact of transient market volatility, and it also means you pay less in taxes because short-term capital gains are taxed more aggressively.
Of course, you will also need a diversified portfolio of high-quality stocks, and that’s the tricky part. There’s no magic formula to identify smart investments, but I typically start by looking for companies with three qualities: a competitive advantage, strong revenue growth, and a whopping market opportunity. For instance, Airbnb (NASDAQ:ABNB) and Intuit (NASDAQ:INTU) check all three boxes, and both look like the building blocks of a market-beating portfolio.
Image source: Airbnb.
1. Airbnb
Airbnb is disrupting travel and tourism, an industry that represented 10% of the global economy prior to the pandemic. Airbnb connects 4 million hosts with potential guests, helping travelers find unique lodgings in 100,000 global cities. Likewise, its platform also links travelers with experiences in over 1,000 cities — everything from hidden jazz clubs in London to maple syrup tasting in Vermont.
Last year, social distancing brought travel to a standstill, and the industry is still in the early stages of recovery. But the pandemic is likely to have a lasting impact, and Airbnb is well-positioned to capitalize. Remote work has made people more flexible, meaning they can travel anytime. To address demand, Airbnb introduced flexible search parameters, allowing users to search within a range of dates, prices, and destinations.
Airbnb also made it easier for hosts to join the platform, offering artificial intelligence (AI)-powered tools to improve photo arrangement and text descriptions. Those moves highlight another key advantage: Onboarding a new host is much easier (and cheaper) than building a new hotel. That makes Airbnb’s business model more dynamic and resilient, which has translated into strong sales growth over the past year.
|
Metric |
Q3 2020 |
Q3 2021 |
Change |
|---|---|---|---|
|
Revenue (TTM) |
$3.6 billion |
$5.3 billion |
47% |
Source: YCharts. TTM = trailing-12-months.
The future looks even brighter for this disruptive tech company. Management puts its market opportunity at $3.4 trillion, which includes short-term stays, long-term stays, …….
Source: https://www.fool.com/investing/2022/01/02/want-to-build-wealth-2-unstoppable-stocks-to-buy/
