As we look towards 2020, it’s important as well as interesting to look back. The goal is to see if we can apply any lessons that the market has taught us and glean any hints for investing in the coming decade. One place to start is with the top 10 stocks of the decade in the S&P 500 (through December 5), as compiled by MarketWatch.
It was striking and humbling for me to learn that more than a few of the top 10 stocks of the decade I knew little about. Let’s take a look and see how a $100 investment would have grown over the decade if you had reinvested all dividends in these top-performing stocks.
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The Top 10 Stocks of the Decade
Of this illustrious group, Netflix (NFLX) ranked #1, with a $100 investment on the first trading day of 2010 growing to a remarkable $3,867 now.
Fintech innovator MarketAxess Holdings (MKTX) grabbed the #2 slot with a $100 grubstake amassing $3,282. This company operates a global electronic bond-trading platform, improving the process for investors who traditionally traded bonds “over-the-counter.”
Next up was Abiomed (ABMD), a company that develops medical devices that provide circulatory support. The company’s Impella device is the world’s smallest heart pump. Your $100 investment in Abiomed over the decade would have led to a cool $2,221.
In fourth place, growing to $2,165, was TransDigm Group (TDG), a fast-growing aerospace firm that has grown through smart acquisitions.
Broadcom (AVGO), a San Jose, California firm which designs, develops, and supplies a range of semiconductor devices, came in fifth place with stockholders turning $100 into $2,019.
Align Technology (ALGN), also headquartered in San Jose, is a medical device company that designs, manufactures, and markets Invisalign clear aligners and scanners and services for orthodontics, and restorative and aesthetic dentistry worldwide. This stock held throughout the decade led to a stockpile of $1,558.
United Rentals (URI) operates a pretty straightforward business as an equipment rental company. It operates across many segments including general construction and industrial equipment, including backhoes, skid-steer loaders, forklifts, earthmoving equipment, and material handling equipment. A $100 investment in this stock led to a nice $1,534.
Regeneron Pharmaceuticals (REGN) is a New York-based biopharmaceutical company that has collaboration and license agreements with firms such as Sanofi, Bayer, Teva, and Mitsubishi Tanabe Pharma. Investors in this stock accumulated $1,530.
Ulta Beauty (ULTA) stores offer cosmetics, fragrances, skincare and haircare products, bath and body products, salon styling tools and salon services. If you stuck with Ulta stock over the whole decade you came away with $1,333
Amazon (AMZN), of course, needs no introduction and it was a bit of a surprise that it ranked 10th on this list of super stocks. Still, turning $100 into $1,309 is nothing to sneeze at.
What to Look for in the Next Decade
I think we can all take away a few investing lessons from this rundown of great growth stocks over the last decade and apply them to 2020 and the next decade.
First, all of these firms are global, selling products and services all over the world.
Second, they operate in a wide variety of sectors, from pharma to high-tech equipment, finance, aerospace, and entertainment. There is clearly no monopoly on growth and opportunity.
Third, many investors, including me, wouldn’t have had the patience to hold a winning stock like these for 10 years. Although it is smart to take some profits off the table from time to time, learn to let your winners run until they start underperforming.
I wish you all the success in the world investing in 2020 and beyond.