Last week was a reminder to investors that the blockbuster gains of the last year could easily disappear. All it took was a modest increase in Treasury yields to send high-growth tech stocks into a tailspin…
The Nasdaq lost 3% on Feb. 25, and fell nearly 10% in the span of a week, following its intraday record on Feb. 16.
With the coronavirus vaccine rollout accelerating and hopes for economic recovery increasing, we’re likely to see similar turbulence in the coming months. Given the market’s lofty valuation, we could easily witness a larger pullback, especially as interest rates are expected to rise over the next year, beckoning a rotation into bonds and a devaluation of growth stocks.
If you’re feeling jittery about the prospects for some of the growth-stock winners that have rallied into the stratosphere over the last year, you can read below about three stocks that are rock-solid, long-term winners no matter what the market does.
1. Walt Disney
It’s hard to find a stock more deserving of a place in any portfolio than Walt Disney (NYSE:DIS). The company offers growth through its streaming juggernaut Disney+, the safety of an unrivaled trove of intellectual property that’s been a part of Americana for generations, and (in non-pandemic times) reliable income from its dividend.
Disney stock may be trading near all-time highs, but that price tag is warranted: The breakout growth from its streaming services has caused Wall Street to value it more like a growth stock than the legacy entertainment company that it was before the launch of Disney+. That service has attracted nearly 100 million subscribers in little more than a year — unprecedented growth for a streaming launch. Additionally, the company is likely to see record demand at its theme parks and resorts once the pandemic is over and it’s safe to travel again. Attendance at its parks has already started recovering, and that will accelerate as vaccines are distributed.
In other words, with Disney, investors get a rare combination: a fast-growing digital component, and a business set to get strong tailwinds from the economic reopening. The company would benefit from an accelerated, successful reopening, making it resistant to any upcoming pullback in the market.
Java giant Starbucks (NASDAQ:SBUX) was as poorly positioned for the pandemic as most companies. The cafe chain relies on customers visiting its stores every day to buy coffee or a snack, often while commuting to work or school — just the kind of discretionary purchases that disappear during a crisis.
Starbucks should have gotten pummeled by the pandemic. But while its sales did plunge in the early days when lockdowns were in effect, the cafe chain has made an impressive recovery, thanks to its drive-thru locations, Mobile Order & Pay program, and adapting stores to the pandemic by offering curbside pickup as well as delivery via Uber Eats.
As a result, Starbucks has nearly…
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