Here's Why Alphabet Deserves a Spot in Your Portfolio

In a market where countless stocks are trading at unreal valuations or growing at lightning speed, investors may be tempted to load up on these types of stocks. While I'm a proponent of owning some of these names, a well-balanced portfolio isn't completely levered toward growth at all costs.

This is why I think there is room for companies like Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) in a portfolio. While Alphabet participates in the artificial intelligence (AI) arms race, it's not its primary business. I think Alphabet deserves a spot in every investor's portfolio, as the current business model should provide market-beating returns for years to come.

First, let's look at what just a few percentage points of outperformance each year looks like. Say you invest $500 per month into the S 500, which has historically returned around 10% annually. After 30 years, you'll have $1.1 million. That's a great run, but if you can get 12% annual returns (which I think Alphabet can do), that number rises to $1.8 million -- a 56% increase.

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Source Fool.com