Putting money into the stock market is a smart choice that, through sufficient self-control and perseverance, has the potential to result in significant wealth. financial freedom .
Proven investors understand that owning a diversified mix of top-tier stocks is essential. By allocating resources among multiple well-managed businesses that have distinct strengths, you set yourself up to benefit from overall economic expansion and allow the power of compound interest to boost your returns over time.
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These three exceptional stocks can help jumpstart your investment portfolio and put you on the path to success.
Progressive
Many investors tend to ignore the insurance sector, viewing it as outdated and somewhat dull. Nonetheless, there is a firm that keeps pushing boundaries and excelling in the field through exceptional underwriting services. Progressive (NYSE: PGR) .
Progressive currently ranks as the second-biggest car insurance provider in the U.S., coming right after State Farm. Over many years, Progressive has displayed excellent underwriting In the fiercely competitive insurance sector, this company has richly rewarded its investors. To illustrate, an investment of $10,000 in Progressive stock three decades ago would be valued at more than $1.7 million currently!
This insurance company has consistently pledged to secure an underwriting profit of at least $4 for every $100 in premiums collected. Consequently, they have adopted advanced technologies and were among the first in their industry to do so. telematics , or pricing strategies tailored to drivers' behaviors rather than conventional demographic factors. The firm offers customized rates aimed at attracting safer, higher-quality drivers.
This dedication to ensuring profitable underwriting is crucial for Progressive’s enduring success. Owning shares offers additional advantages too, as the product remains consistently sought after and can expand in tandem with economic growth. Furthermore, the company possesses pricing power This allows it to increase premiums and adapt to escalating costs due to high inflation. If you're looking for steady growth over the long term, Progressive is a great blue-chip stock to hold now.
Berkshire Hathaway
Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) Shares several commonalities with Progressive. Among Berkshire Hathaway’s many privately-held firms is GEICO, which was purchased in 1996. GEICO ranks as the third largest auto insurer in the United States, and it has made excellent progress In its underwriting efforts to close the gap with Progressive in recent times.
Besides GEICO, Berkshire Hathaway also controls various other insurance companies like National Indemnity, General Re, and Alleghany. Collectively, these entities contributed $22.7 billion out of the company’s total operating earnings of $47.4 billion for the previous year.
Berkshire owns numerous businesses across other industries as well, including railroads, consumer staples, energy, and manufacturing. These companies also have strengths, like pricing power and steady, stable growth alongside the economy. In addition, Berkshire boasts $334 billion in investable assets And it is amassing significant interest from secure U.S. Treasury investments, whereas Warren Buffett and his team are biding their time for promising investment prospects.
Berkshire Hathaway provides exposure to the broader economy with its numerous holding companies, which can grow as the economy grows but also provide resilience across economic cycles. This, coupled with Berkshire's strong financial position and patience in finding quality investments, makes it an excellent choice for long-term investors today.
Tradeweb Markets
Tradeweb Markets (NASDAQ: TW) In the 1990s, this firm modernized U.S. Treasury trading through its innovative trading platform. It has since evolved into an essential resource for large institutional investors seeking to trade not only Treasuries but also various financial products such as stocks, bonds, options, and exchange-traded funds (ETFs).
In recent years, the market for Treasury and corporate bonds has seen tremendous growth. Treasury bills and bonds Are widely traded and held by banks, insurance firms, and various professional investors, these liquid financial tools see significant activity from such entities. Furthermore, as the U.S. national debt expands, issuing Treasury securities remains vital for governmental financing.
Tradeweb has also done an excellent job forging partnerships and gaining market share Across its different financial tools, for example, since 2019, its portion of the U.S. Treasury market increased from 12.3% to 23.4%. During this time frame, its stake in the U.S. investment-grade bond sector rose twofold to reach 26.2%, whereas its position in the U.S. high-yield bond segment surged almost threefold up to 10%.
The markets are showing increased activity, and Tradeweb keeps broadening its range of services. Given the rise in global debt, Tradeweb seems poised for growth, which makes it a strong pick as an investment option today.
Is it a good idea to put $1,000 into Progressive at this moment?
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Courtney Carlsen holds stakes in Progressive. The Motley Fool owns shares of and endorses Berkshire Hathaway and Progressive. The Motley Fool possesses a disclosure policy .
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