I've got no major regrets about my current investment portfolio and how it got to where it is today. But if I had it to do over again, I'd probably do things a little bit differently. I'd speculate a little less and hold on to certain positions longer. I'd look for more trends and chase fewer fads. Mostly, I think I'd simplify everything and embrace a “less is more” mindset.
With that as the backdrop, here's exactly how I'd do things with a clean slate and $100,000 to get started today. Note that all six of these picks are holdings I'd be happy to stick with forever if need be.
It's an admittedly obvious, almost-cliché pick, but I'd have to own a stake in Google parent Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG).
Think about it. As long as the world uses the internet, it's going to need a means of navigating it. Google is still the go-to option for most people, fielding more than 90% of the world's web searches, according to GlobalStats' statcounter. It's also behind the preferred means of connecting smartphones to the mobile web. GlobalStats says 70% of the world's mobile devices use Google's Android operating system.
This expansive market share of course positions the company to monetize all this web traffic. It's also the key reason Alphabet has failed to grow its quarterly revenue (year over year) only twice in the past 10 years. One of those instances was the second quarter of 2020 when the pandemic was first taking hold in the U.S.
I don't like JPMorgan Chase (NYSE: JPM) just because it's the nation's biggest bank, boasting $3.2 trillion worth of assets. I will say, however, that its sheer size makes it one of the easiest financial names to like. Not only does size give the big bank lots of clout, it also translates into greater cash flow that allows JPMorgan Chase to retain its leading market share.
It's also one heck of a dividend payer. While I don't expect the company to double its dividend again in the next five years as it has over the course of the past five, the company's dividend history does suggest it's committed to sharing its income stream in a real-time kind of way.
Of all the technology stocks a new investor might name as prospective buys, Texas Instruments (NASDAQ: TXN) typically isn't one of the first names on that list. Rather than manufacturing the processors used in AI applications or chipsets found in cutting-edge smartphones, Texas Instruments is more likely to make one of the other often-ignored chips attached to a circuit board. Its wares are just as likely to be found in something as simple as a vacuum cleaner or a coffee machine as in a laptop or data center.
But that's the point. Texas Instruments makes the sort of technologies needed regardless of the economic environment, addressing slivers of the market that aren't hypercompetitive.
Invesco Water Resources ETF
I'm typically not a fan of theme-based trades, like the legalization of cannabis, 3D printing, the advent of fuel cells, or the rise of China's consumer class. There are often just too many unanswered questions obscured by hype.
The growing problem of water scarcity, however, is a real one even if few people are talking about it. It's not just a third-world problem, either. Residents of Flint, Michigan, recently went for years without access to clean, safe water. Southern California continues to face its own water shortage crisis as the Colorado River literally dries up.
It's difficult to pinpoint exactly which companies will benefit from this unfortunate dynamic. Then again, it's a big problem that will require responses from many companies. The easiest and most effective way of playing this trend is by buying an entire basket of water-centric companies like the Invesco Water Resources ETF (NASDAQ: PHO).
Solar energy is another one of those megatrends worth owning exposure to. Eurostat says solar power's growth in the European Union reached record levels in 2021, while the United States Energy Information Administration forecasts that solar power will account for 47% of our renewables-based electricity production by 2050, up from only 16% in 2020. That makes it the fastest-growing energy resource for the timeframe in question.
The preferred way to invest in this growth has been with stocks of solar panel manufacturers like First Solar and JinkoSolar. And those companies will continue to play an important role in the continued rollout of solar power solutions. But names like SolarEdge Technologies (NASDAQ: SEDG) are positioned to lead the next era of the solar revolution. Rather than seeking to improve the efficiency and lower the cost of solar panels themselves, SolarEdge is focused on optimizing the inverters that convert sunlight into electricity and improving the tools that help users manage these systems. It's an important area that's so far been underexplored, and that's a key reason 2021's projected revenue growth rate of 34% is expected to repeat in the fiscal year that's now underway. Profits are growing at similar clip.
SPDR S&P 500 ETF
Finally, I'd invest the biggest chunk of my $100,000 — half of it, in fact — in index fund SPDR S&P 500 ETF (NYSEMKT: SPY).
Yes, I know it's boring. I also know that stepping into an index is antithetical to the idea of handpicking stocks for their potential to outperform the broad market. The overweighted allocation to this index-based exchange-traded fund also seems unbalanced.
The thing is, I now know enough to know just how difficult it is to beat the market, even when I've got access to more market-based information than the average investor does. This information is interesting to be sure, but not necessarily helpful. My mix mostly assures me I won't underperform the market, yet it also gives me a good chance to outperform it by at least a little.
The trick truly is sticking with all six of these picks, even when it feels uncomfortable to do so.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. James Brumley owns Alphabet (A shares). The Motley Fool owns and recommends Alphabet (A shares) and Texas Instruments. The Motley Fool recommends Alphabet (C shares), First Solar, and SolarEdge Technologies. The Motley Fool has a disclosure policy.