Strategies for Smart Investing: Average vs. Growth Stocks
For most investors, targeting average returns is a wise choice. Average returns can be both powerful and straightforward to achieve by investing in one or more low-fee, broad-market index funds, like those that track the S&P 500.
If you’re aiming for above-average returns, consider allocating part of your portfolio to growth stocks. Here are several promising options to explore.
Where to invest $1,000 right now? Our analyst team has identified what they consider the 10 best stocks to buy at this time. Learn More »
Image source: Getty Images.
The Case for Average and Above-Average Growth
First, let’s examine the broader context. Historically, the Stock market has delivered annual returns averaging close to 10%. However, the average return during your specific investing period may vary. Currently, there are concerns over a potential recession. If one were to occur, keep in mind that recessions have happened before, and the market has consistently bounced back.
To illustrate how your investments might grow over time at different rates, consider the following projections:
|
Investing $12,000 Annually For: |
Growing at 8% Annually |
Growing at 10% Annually |
Growing at 12% Annually |
|---|---|---|---|
|
5 years |
$76,032 |
$80,587 |
$85,382 |
|
10 years |
$187,746 |
$210,374 |
$235,855 |
|
15 years |
$351,892 |
$419,397 |
$501,039 |
|
20 years |
$593,076 |
$756,030 |
$968,385 |
|
25 years |
$947,452 |
$1,298,181 |
$1,792,007 |
|
30 years |
$1,468,150 |
$2,171,321 |
$3,243,511 |
|
35 years |
$2,233,226 |
$3,577,522 |
$5,801,557 |
|
40 years |
$3,357,372 |
$5,842,222 |
$10,309,707 |
Data source: author’s calculations.
Investing in growth stocks may facilitate quicker financial growth; however, these investments carry risks. Stocks can be overvalued, and some may underperform. Below are a few notable growth stocks to consider:
- Nvidia has established itself as a leader in the semiconductor sector. Initially recognized for its gaming chips, the company is now a pivotal player in the artificial intelligence boom, producing chips for data centers. Following a recent market drop, Nvidia’s stock is now priced more attractively, down 16% year-to-date.
- Accenture, with only a 2% decline year-to-date, is another contender. Investors are keen on its new software suite leveraging Nvidia’s technology. With over 750,000 employees across 100 countries, Accenture remains a steady grower and also provides dividends.
- SoFi Technologies, a fintech company, describes itself as a comprehensive digital financial services provider. With over 10 million members, it offers banking, insurance, and investment services. SoFi’s stock has retreated about 18% year-to-date, making it potentially appealing for investors.
- Meta Platforms, known for Facebook and also including Instagram, Messenger, Threads, and WhatsApp, boasts daily engagement from about 3.35 billion users. This substantial user base presents significant monetization opportunities, contributing to Meta’s stock being up 6.9% year-to-date.
- The Vanguard Information Technology ETF is an advisable choice if you’re hesitant about selecting individual growth stocks. This ETF instantly diversifies your investment across 316 tech-focused companies, with significant portions in giants like Apple, Nvidia, and Microsoft.
Investing in any of the mentioned stocks, other powerful ETFs, or a straightforward S&P 500 index fund can effectively set you on the path to financial security.
What to Do with $1,000 Right Now
Listening to our analyst team’s Stock recommendations can yield substantial benefits. Notably, Stock Advisor’s total average return is an impressive 799% — significantly outpacing the S&P 500’s 162%. *
They’ve recently disclosed what they identify as the 10 best stocks available for investment today, accessible upon joining Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of March 10, 2025
Randi Zuckerberg, a former director of market development and spokesperson for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, serves on The Motley Fool’s board of directors. Selena Maranjian holds positions in Apple, Meta Platforms, Microsoft, Nvidia, and SoFi Technologies. The Motley Fool has positions in and recommends Accenture Plc, Apple, Meta Platforms, Microsoft, and Nvidia. Additionally, The Motley Fool recommends long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
