The best shares to buy depend on one’s investment goals and risk tolerance. For some people, low-risk stocks are the best option. For others, higher-risk growth stocks are more suitable.
Here, I’m going to highlight three growth stocks that I believe are a good match for me, a risk-tolerant, long-term investor. I believe these stocks are some of the best shares to buy today.
A reopening stock
The first stock I want to highlight is Visa (NYSE: V). It operates the largest payments system in the world.
The reason I’m bullish on Visa is that the US economy looks set to boom this year. America is reopening at a rapid rate and cashed-up consumers are unleashing pent-up demand. Las Vegas hotels, for example, are seeing very strong booking numbers. Visa should benefit from this economic strength. Across the US, there are around 340m Visa credit cards in circulation.
This is not just a reopening stock, however. The long-term story looks very attractive too. Over the next decade, trillions of transactions are set to shift from cash to cards and e-payments.
I’ll point out that Visa stock is quite expensive. Currently, the stock sports a forward-looking P/E ratio of about 40. This adds risk to the investment case. However, this is a dominant company that’s very profitable. So, I’m comfortable with the high valuation.
An emerging markets play
Another stock I’d buy right now is Diageo (LSE: DGE). It’s a leading alcoholic beverage company that owns a wide range of top brands including Johnnie Walker, Smirnoff, and Tanqueray.
My investment thesis here is pretty simple. As the world reopens in the year ahead, people are going to celebrate with their friends and family. A considerable amount of alcohol is likely to be consumed. Diageo should benefit.
Like Visa though, this is not just a short-term play. In the long run, Diageo should benefit from its exposure to world’s emerging markets where wealth – and demand for premium products – is rising rapidly.
Diageo shares have had a strong run since November. So, there’s always the risk of a pullback. However, City analysts have been upgrading their earnings forecasts recently. This could support the share price. The stock’s forward-looking P/E ratio of 26 seems reasonable, to my mind. I also like the 2% yield on offer.
A disruptive stock
Finally, on the more speculative side, I like Upwork (NASDAQ: UPWK). It operates the world’s largest freelance employment platform. Through this platform, skilled freelance workers can gain access to a vast range of jobs.
Upwork has grown at an impressive rate in recent years (three-year revenue growth of 84%) and I expect the strong growth to continue. As economic conditions pick up post-Covid-19, businesses are likely to hire more staff. In many cases, they will turn to freelancers for flexibility.
This is another stock that has substantial long-term growth potential. Right now, the employment landscape is undergoing a huge shift with both employees and employers turning to the freelance market due to the benefits it offers. Between now and 2025, the global freelance platform market is expected to grow at around 16% per year.
Upwork is still relatively small. Its market cap is just $5.5bn. This means it’s likely to be volatile. I’m happy to ride out this volatility, however. Overall, I think the long-term risk/reward proposition here is favourable.