After brutal COVID-19-driven declines plunged stocks into bear-market territory, the U.S. stock market has begun to recoup some of its losses in recent days.
While downside volatility can certainly return to the markets in the days ahead, with many stocks still down sharply from their highs, now could be a good time to consider investing some money in the stock market.
And one of the best ways to do so is to invest in stocks that are poised to benefit from powerful long-term trends, some of which could even see their growth accelerated by the pandemic and its aftereffects. In this regard, investing $1,000 or so in each of the following five stocks could prove to be a very smart move.
The coronavirus pandemic should accelerate the migration of retail sales from traditional brick-and-mortar stores to online channels. Shopify (NYSE:SHOP) stands to benefit from this global megatrend. The commerce platform gives businesses of all sizes the tools they need to operate online stores. In turn, Shopify is enjoying torrid growth: Revenue soared 47%, to $1.6 billion, in 2019.
And with such a massive expansion opportunity — online retail sales are set to surpass $6.5 billion by 2022, up from $3.5 trillion in 2019, according to Statista — this enabler of e-commerce should continue to grow at an impressive clip for many years to come.
PayPal (NASDAQ:PYPL) is another high-quality business that’s poised to profit handsomely from the growth of e-commerce. The digital payments giant makes it easier to buy items online with features such as One Touch, which allows users to skip the entering of their billing information and check out with the click of a button.
PayPal should benefit from the growth of peer-to-peer digital cash transfers — which could accelerate if disease-transmission concerns cause people to make fewer payments with physical cash — because it owns the massively popular Venmo social payments app.
The COVID-19 pandemic has forced sports leagues around the world to delay or cancel their seasons. Esports, such as Electronic Arts’ (NASDAQ:EA) Madden NFL tournaments, which can be played remotely, are helping to fill the void.
Video games are a massive $150 billion industry, supported by more than 2.5 billion gamers across the world. Fueled by the growth of esports and mobile gaming, the video game market is set to approach $200 billion by 2022, according to esports analytics site Newzoo. Electronic Arts is an industry titan with some of the most popular video game franchises, so buying its stock is a great way to claim your share of the gaming industry’s steadily rising profits.
Electronic-agreement technology is allowing companies to conduct business while abiding by social-distancing directives. Huge industries such as healthcare and real estate are beginning to adopt this tech en masse. As the leader in e-signatures, DocuSign (NASDAQ:DOCU) is particularly well-positioned to ride this growth trend.
But rather than simply wait for the rising tide to lift its boat, DocuSign is investing aggressively as it expands its digital transaction management (DTM) services. The DTM market, which includes services that digitalize paper-based processes, could reach $30 billion this year, according to Aragon Research. With expected 2020 revenue of roughly $1.3 billion, DocuSign has long runways for growth still ahead.
Despite the stock market’s recent rebound, volatility will surely return at some point. CME Group (NASDAQ:CME), which operates the world’s largest futures exchange, tends to benefit from periods of market turbulence.
Futures contracts are agreements that allow people to buy or sell an asset at a specified time and price. Futures are often used to limit risk, by allowing traders to hedge their positions in areas such as interest rates, stocks, and commodities. Demand for these risk management tools typically rises during periods of market distress, which, in turn, tends to boost CME Group’s profits. So if you’re looking for a way to hedge your own portfolio’s risk in this volatile market, buying some shares of CME Group could be an intelligent way to do so.