Last month, Wells Fargo & Co. (NYSE: WFC) released a startling report that said 20% of millennials will never invest in the stock market. That's a costly mistake.
And I don't want to see young people throw their financial futures away, which is why I created a guide for the top stocks for millennials in 2019.
Of course, I'm not surprised the younger generations are avoiding the stock market. Many people under the age of 35 grew up watching parents, friends, and family members take a financial beating in 2008.
Homes were lost, and the savings in retirement accounts evaporated into thin air.
Because of the devastating losses, many Americans have been sitting out of the longest bull market on record.
People are right to be cautious, but here's the truth: The stock market is the single best place to build your wealth over the long term.
The 90-year historical return of roughly 9.8% by the S&P 500 crushes whatever the local savings bank has been able to offer.
And I want to make clear that you can achieve market-beating returns and build your nest egg without having to take excessive risks.
Investing in growth and income stocks offers you the ability to take part in a Dividend Reinvestment Program (DRIP).
A DRIP automatically reinvests the cash flow generated by dividends and buys more of a company's stock at no cost. This provides a compounding effect on your money, juices the number of shares you own, and will help millennials build wealth more quickly and effectively.
I'll show you exactly which stocks you can use to do this in my list of stocks for millennials.
Plus, I'll also show you a stock with so much growth potential I simply had to include it.
My hope is this starts young investors on the road to financial freedom that will allow them to retire comfortably in the years ahead...
Top Stocks for Millennials, No. 5: Brookfield Property Partners
Buy low, sell high.
There's no better industry to make money with this mantra than in real estate. Recently, Real Estate Investment Trusts (REITs) and commercial real estate operators have taken a hit due to rising interest rates.
But the savvy know that the recent pullback in Brookfield Property Partners LP (NASDAQ: BPY) has created an exceptional opportunity for millennial investors.
Right now is the perfect time to acquire shares of BPY. It has a mouthwatering dividend yield of 6.57%.
Reinvesting that dividend will give you more shares and help you compound your money over time.
Compounding returns is part of what made Warren Buffett a billionaire.
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Over the last five years, this commercial real estate holdings giant has morphed into a powerhouse thanks to five large acquisitions that set it up for long-term success.
Brookfield has $90 billion in assets (up 200% since 2013), and almost every single one of them generates gobs of cash.
Over the next 12 months, RBC Capital Markets projects the BPY stock price will climb to $24.
From today's (Nov. 15) opening price of $18.75, that's a potential profit of 28% over the next 12 months. But this is a stock you'll want to hold for a long time.
Top Stocks for Millennials, No. 4: Verizon Communications
There was a time when owning a cell phone was a luxury.
Today, it's a modern-day necessity joining monthly Internet and streaming services on the list of things people can't live without.
And connectivity is about to get even more important.
The company recently - and without much fanfare - rolled out residential 5G broadband service in Houston, Indianapolis, Los Angeles, and Sacramento.
We're talking about a service that is going to revolutionize cell phone and wireless communication speeds.
This service will also allow Verizon not only to maintain its massive customer base, but also to tap into the growing population of cord cutters who are ditching cable and turning to streaming services like Netflix Inc. (NASDAQ: NFLX) and Hulu.
While it will take time for the benefits of 5G to materialize, Verizon sits right at the forefront of this digital revolution.
Patient millennials can earn a 4.1% dividend yield payment from VZ and let their money do the work for them, and they'll be holding one of the best 5G stocks on the market.
Top Stocks for Millennials, No. 3: Welltower
One of the industries poised for immense growth and reliable cash flow in the future is in the business of senior living facilities.
And that makes Welltower Inc. (NYSE: WELL) a clear-cut winner.
Now, millennial investors may not be thinking about entering a nursing home anytime soon.
But baby boomers indeed are, and they are the largest generation. That's going to create a massive amount of demand for retirement and long-term care services. And Welltower could become the home to many parents of millennials as the industry expands.
This is one of the few industries that exist outside of baby deliveries and funeral homes in which the income is virtually guaranteed.
You're also working in an industry where the properties owned appreciate in value and generate income from operations.
All of that demand will continue to generate impressive cash flow in both good markets and bad markets.
It's not going to matter too much if the economy goes boom or bust when it comes to this sector. Welltower will keep raking in the cash.
The stock offers a healthy 5% dividend to boot.
Top Stocks for Millennials, No. 2: Amazon.com Inc.
Amazon.com Inc. (NASDAQ: AMZN) is the only stock on this list that doesn't have a dividend.
But I had to include it on this list because the upside is too large for millennial investors to pass up.
Amazon has been the most dominant retail company in the history of the United States. It has forced competitors to close or completely alter their selling strategies.
On top of that, AMZN is taking on new industries, like the grocery business. Plus, its Amazon Web Services division, which includes cloud storage, continues to bolster its revenue.
There's also this incredible fact: 90 million U.S. households have Amazon Prime.
That is a stunning amount of capital when annualized at rates between $59 for students and $119 for traditional households.
Stifel Nicolaus projects the AMZN stock price will trade for $2,400 in the next 12 months, a potential profit of 51% from today's opening price of $1,581.
That might sound like a steep price tag, but if you're just getting started as an investor, buy one share at a time. Or tap into micro-shares and purchase several hundred dollars at a time.
Any one of those stocks is a great place to start for millennials building their investment portfolios.
But I wanted to save the top stock for millennial investors for last because, years from now, you're going to be bragging to your grandkids about how much money this next pick made you...
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Top Stocks for Millennials, No. 1: Blackstone Group
Right now, Blackstone Group LP (NYSE: BX) is sitting at one of the most attractive prices for its stock in a decade.
Shares are trading at just under $33 as of Nov. 14, 2018.
This is a cash-rich company that takes companies private, turns them around, and then makes a heap of money either by selling the firm to a competitor or launching an IPO.
One of the most successful leveraged buyouts in history is credited to Blackstone through its 2007 purchase of Hilton Hotels.
Don't be surprised if Blackstone Group comes in soon and buys up the few remaining assets of value at General Electric Co. (NYSE: GE).
The private equity giant has a ridiculous profit margin of 22.3% and trades at a price/earnings ratio of 10.45, less than half what the average S&P 500 stock trades for.
This stock is ridiculously cheap, but don't be fooled by its price tag. It's one that younger investors can buy, hold, and reinvest to build wealth and retire early.
The stock has a one-year price target of $44.25. That represents a mouthwatering 32.6% upside over the next year, and young investors can take solace in knowing they are buying one of the best private equity managers on the planet.
Hopefully, those five stocks can get you started on the road to financial freedom. But if you've got even more catching up to do, we've got you covered there too...
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.