The longer your investment horizon, the greater your chances of seeing good returns. However, it’s still important to choose the right stocks. By combining a long investment horizon with promising stocks in your portfolio, an investor could set themselves up very nicely for a comfortable retirement. In this article, I’ll discuss two TSX stocks that could grow your portfolio over the next decade.
Invest in this top tech stock
In what’s becoming a bit of a controversial pick, I believe Shopify (TSX:SHOP)(NYSE:SHOP) could grow your portfolio over the next decade. The stock has gotten a lot of heat after falling about 80% from its all-time high. However, Shopify remains one of the most important companies in a rapidly emerging industry.
Shopify provides a platform and many of the tools necessary for merchants to operate online stores. It offers a wide range of solutions that could help merchants regardless of how established they may be. On the low end of the spectrum, Shopify offers solutions that could attract first-time entrepreneurs. On the higher end of the spectrum, Shopify is able to cater to large-cap enterprises. This inclusivity is what I believe separates Shopify from its peers.
In terms of its business, Shopify relies on a recurring payment model. That provides the company with a stable and predictable source of revenue. It’s also easy to see that Shopify’s business continues to grow in each and every year. Since Q1 2017, Shopify has never seen its monthly recurring revenue decline. Shopify stock may not be very popular today, but I believe it’s a stock with a lot of growth potential from these depressed stock prices.
This company is worth the price
At the surface, Constellation Software (TSX:CSU) looks like a very expensive stock. In terms of price per share, it really is. Constellation Software stock trades at about $2,000. However, investors shouldn’t really think about price per share since it’s the size of the position in your portfolio that really makes a difference. For example, if Constellation Software was worth $50 and you invested $2,000 into the stock, it would be the same as buying one share at $2,000.
However, if you don’t have two grand to spend on a stock then that’s a different story. Depending on your brokerage, you may be able to buy this stock in fractional shares. That could help investors with smaller amounts of capital.
Now that we’ve sorted out the issue of price, let’s take a look at the stock for what it’s worth. Constellation Software has found success by acquiring impressive vertical market software businesses and helping turn those into excellent business. It does this by following a very strict and disciplined criteria in selecting businesses to acquire. Constellation Software requires that the businesses they acquire have an outstanding manager, consistent profitability, and above-average growth.
Since its IPO, Constellation Software stock has grown more than 10,800%! That represents a CAGR of about 34%. With its founder Mark Leonard continuing to lead the company, I believe Constellation Software could still grow a lot from here.
