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Before you consider investing, ask yourself whether you’re comfortable with that level of volatility. Growth ETFs often earn explosive returns when the market is thriving, but they can also be hit much harder during downturns. If you’re uncomfortable with the idea of facing more severe ups and downs, growth ETFs could be a stressful investment.

That said, this type of investment could also help you earn much higher-than-average returns over time. The Vanguard Growth ETF has earned an average rate of return of 15.17% per year over the past 10 years. By comparison, the Vanguard S&P 500 ETF has seen an average return of just 12.96% per year in that time, while the stock market as a whole has earned an average of 10% per year over decades.

Because growth ETFs can be more unpredictable, there are no guarantees that you’ll continue seeing 15% average annual returns. But even slightly higher-than-average returns could still earn you a lot of money.

If you were to invest $400 per month, here’s approximately how much you could accumulate, depending on whether you’re earning an 11%, 13%, or 15% average annual return:

Data source: Author’s calculations via investor.gov. Table by author.

The most important thing to keep in mind when investing is that a long-term outlook is key, and that’s especially crucial with growth ETFs. We’re bound to face a downturn sooner or later, and even the most seasoned investors are often shaken by volatility. But by holding your investment for decades, you can ride out the storm and take advantage of long-term gains.

There’s no single best way to invest, and everyone’s approach will be different. But if you’re looking for a lower-effort investment that could help make you a lot of money over time, the Vanguard Growth ETF could be a great option.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $22,819!*

• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,611!*

• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $444,355!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 11, 2024

Katie Brockman has positions in Vanguard Index Funds – Vanguard Growth ETF and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, Vanguard Index Funds – Vanguard Growth ETF, and Vanguard S&P 500 ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

1 Magnificent Growth ETF That Could Turn $400 Per Month Into $1.4 Million While Barely Lifting a Finger was originally published by The Motley Fool

The company is forecasting a 30% increase in revenue in full-year 2024 to $90 billion, which would be a solid improvement over the 9% decline it witnessed last year. More importantly, the revenue forecast for the next couple of years has been rising as well with the company expected to maintain top-line growth of around 20%.

Even better, analysts expect this growth to flow to the bottom line as earnings increase at an annual rate of 26% over the next five years.

Meanwhile, the stock is trading at 34 times earnings, a big discount to Tesla’s earnings multiple of 90. Investors looking to add a tech stock to their portfolios should consider TSMC — it may not be long before the company surges past Tesla with a higher market cap.

Just like TSMC, Broadcom is also taking advantage of growing demand for AI chips. Broadcom specializes in making custom chips, known as application-specific integrated circuits (ASICs), and it has been billed as the second-most important AI chip company after Nvidia.

In the fiscal 2024 third quarter (ended Aug. 4), sales of the company’s custom AI chips increased an impressive 3.5x from the year-ago period. That trend can be expected to continue as Broadcom is reportedly the leading player in the custom AI chip market with an estimated share of 55% to 60%, according to JPMorgan.

The investment bank believes Broadcom has a revenue opportunity of $20 billion to $30 billion in custom AI chips, which could grow at an annual rate of 20% in the future. The company has already landed key customers such as Meta Platforms and Alphabet, and a recent report from Reuters states that even OpenAI is looking to build an in-house chip with Broadcom’s help.

Broadcom’s AI opportunity isn’t limited to just custom chips. Its networking business has also received a nice shot in the arm thanks to growing deployment of AI data centers with fast connection needs. The company’s networking revenue increased an impressive 43% year over year in fiscal Q3, driven mainly by the growing deployment of AI clusters by hyperscale cloud service providers.

Thanks to such solid tailwinds, it is easy to see why Broadcom’s earnings are forecast to increase at an annual rate of 20% for the next five years. That’s well above the growth that Tesla is expected to deliver over a similar period. Given that Broadcom has a market cap of $813 billion, it is just 27% away from matching Tesla’s current market cap. Broadcom is already the 11th-largest company in the world, putting it just behind TSMC.

And like TSMC, Broadcom seems poised to outgrow Tesla within the next five years, considering its stronger earnings growth and its robust position in the AI chip market.

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 875% — a market-crushing outperformance compared to 172% for the S&P 500.*

They just revealed what they believe are the 10 best stocks for investors to buy right now… and Tesla made the list — but there are 9 other stocks you may be overlooking.

See the 10 stocks »

*Stock Advisor returns as of November 11, 2024

JPMorgan Chase is an advertising partner of Motley Fool Money. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Apple, JPMorgan Chase, Meta Platforms, Nvidia, Qualcomm, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

Prediction: These 2 Stocks Will Be Worth More Than Tesla in the Next 5 Years was originally published by The Motley Fool

Billionaire Warren Buffett, CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), along with Gates, was one of the founders of the “Giving Pledge.” Buffett said that “99% of my wealth will go to philanthropy during my lifetime or at my death.” Thus far, he’s donated roughly $43 billion to the Trust. That helps explain why the Gates Foundation owns more than 22 million Berkshire Hathaway shares worth more than $10 billion.

Given Berkshire’s holdings, which include dozens of businesses and stocks, it’s considered by many to be an incredibly safe investment. That, combined with Buffett’s donations, shows why it’s a top holding. Berkshire also racks up billions of dollars in dividend income every year and currently has $325 billion in cash.

Buffett is considered one of the world’s most successful investors, which is likely why Gates continues to hold so much Berkshire Hathaway stock.

Waste Management (NYSE: WM) isn’t an exciting business, but the combination of reliable recurring revenue and strong pricing power explains why it’s a Gates favorite. The Foundation holds more than 32 million shares of Waste Management stock worth $7.1 billion.

Beyond its trash collection roots, Waste Management has been spending heavily on automation projects to make its recycling operations more profitable. The company’s renewable natural gas projects are also bearing fruit.

Let’s not forget Waste Management’s dividend. The company has made dividend payments every year since 1998 and has increased its payout for 21 successive years. It boasts a yield of 1.3%, and with a payout ratio of just 45%, its track record of payout increases will likely continue.

There’s a lot to like about railroads, which offer a combination of cost-effectiveness and environmental benefits. Add to that the high barriers to entry and strong economic moat, and the attraction is clear. That helps to explain why the Gates Trust owns nearly 55 million shares of Canadian National Railway (NYSE: CNI) worth roughly $6 billion.

Canadian National is unique among its peers, as it’s the only transcontinental railroad in North America, connecting the Pacific coast, the Atlantic coast, and the Gulf of Mexico. As a mode of transportation, rail is four times more efficient than over-the-road trucks. Not only are trains more cost-effective, but their greenhouse gas emissions are 75% less. There’s also a strong economic moat and significant barriers to entry, which makes railroads even more appealing.

Canadian National has a dependable record of dividend payments, which has increased every year since the company’s IPO in 1995. It offers a current yield of 2.2%, and its payout ratio of 39% offers plenty of opportunity for future increases.

Along with the aforementioned reasons for Gates to hold these stocks in his Trust, there’s another — perhaps more compelling — reason. Over the past five years, three of the four have generated triple-digit returns and outpaced the gains of the S&P 500, with Canadian National Railway being the sole laggard. That’s partially explained by the recent macroeconomic conditions and the inflationary environment, which put a squeeze on the results.

However, viewed as a whole, the returns of Gates’ largest holdings provide the clearest argument yet as to why these stocks are a wise choice.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $23,818!*

• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,221!*

• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $451,527!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 11, 2024

Danny Vena has positions in Canadian National Railway and Microsoft. The Motley Fool has positions in and recommends Berkshire Hathaway and Microsoft. The Motley Fool recommends Canadian National Railway and Waste Management and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Billionaire Bill Gates Has 80% of His $45 Billion Portfolio in Just 4 Stocks was originally published by The Motley Fool

A far more boring REIT to own would be VICI Properties, which invests in experiential properties. Although that includes things like gyms and bowling alleys, the big story here is casinos. VICI owns some of the largest gaming facilities in North America in some of the largest gaming markets in North America that are operated by some of the largest casino companies in North America. As the age-old saying goes, the house always wins. In this case, VICI’s lessees have to pay their rent no matter what is going on with the economy or their businesses.

This has resulted in surprisingly steady performance even through the coronavirus pandemic when casinos were effectively shut down. In fact, the dividend has risen steadily since the dividend was initiated in 2018. The dividend growth rate has been fairly generous, too, with the annualized rate of 7% coming in at around twice the historical rate of inflation growth.

Although there are only so many casinos for the REIT to buy, the leases it creates are long (an average of 41 years), and they include regular rent bumps. So, there’s no reason to believe that the “house” will stop winning anytime soon, noting that the adjusted FFO payout ratio was a healthy 75% or so in the third quarter of 2024.

It’s actually pretty easy to find high-yield stocks. The hard part is finding high-yield stocks that are worth owning. While AGNC isn’t a bad company, it just isn’t a yield investment (it’s all about total return), no matter how high its yield gets. You’ll likely be better off with high-yield alternatives like Innovative Industrial or VICI, which back up their high yields with strong and growing businesses.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $23,818!*

• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,221!*

• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $451,527!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 11, 2024

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool recommends Innovative Industrial Properties and Vici Properties. The Motley Fool has a disclosure policy.

2 High-Yield REIT Stocks to Buy Hand Over Fist and 1 to Avoid was originally published by The Motley Fool