Deciding how to invest a lump sum of cash -- say, $50,000 -- is difficult.
The typical U.S. household has just $200,000 in retirement savings by age 65, so $50,000 in cash is a lot of money to most individual investors.
You should look to grow that money, but not recklessly. It can take years to save $50,000, so you don't want to wipe out your portfolio with risky stocks or margin loans. Instead, look to high-quality technology companies with ironclad balance sheets and ample growth prospects to lift your portfolio over the coming years.
Here are some of the best stocks to invest $50,000, or any lump sum, in right now.
Image source: Getty Images.
The Invesco QQQ ETF is the ideal starting point
It's hard to go wrong when you start with the Invesco QQQ ETF(NASDAQ: QQQ). This exchange-traded fund tracks the Nasdaq-100 index, which includes the top 100 holdings in the Nasdaq Composite index. In other words, you get investment exposure to many individual companies with a single ticker symbol. That's instant diversification, a great way to mitigate risk when you invest a lump sum.
The Invesco QQQ ETF features technology stocks, with approximately 57% of the fund's assets devoted to the sector. The Magnificent Seven dominate the ETF's top holdings, including Apple, Microsoft, Amazon, Alphabet (Google), Meta Platforms (Facebook), Nvidia, and Tesla.
These companies are leaders in numerous technology markets, including cloud computing, artificial intelligence, digital ads, electric vehicles, robotics, and more. They generate hundreds of billions of dollars in cash profits, making them an ideal combination of safety and long-term upside.
The Invesco QQQ ETF has outperformed the S&P 500 over its lifetime. That doesn't guarantee it will continue, but it makes the ETF arguably the best technology stock today.
These three individual stocks are industry leaders with excellent track records
Want to sprinkle in some individual stocks with upside? Consider these top-notch contenders. They have entrenched leadership positions in their respective fields and exemplary histories of delivering outsized investment returns over extended periods.
Netflix's long-term outlook remains promising
Streaming has taken the reins from cable television, a long-term trend that originated with Netflix(NASDAQ: NFLX). The company started with disc rentals, but launched its streaming platform in 2007. Today, Netflix is a global behemoth with over 300 million subscribers and $40 billion in trailing 12-month revenue.
In its early years, Netflix struggled to profit, but it has reached a size where revenue grows faster than content spending. The company's net profit margins have expanded from under 3% a decade ago to over 23%.
The long-term outlook remains promising. Netflix has broken into new content categories, including mobile gaming and live sporting events, and international markets still have plenty of room for expansion. It's hard not to like the company's chances of continuing to grow profitably for the foreseeable future.
Palo Alto Networks has access to growth opportunities
Cybersecurity continually evolves to keep up with advanced threats and hackers. The stakes are high, with the typical breach costing companies over $4 million in damages. Palo Alto Networks(NASDAQ: PANW) is a security stalwart, most known for its leadership in cutting-edge firewall security.
About a year ago, the company shifted toward a platformization strategy, pushing its customers to move from piecemeal solutions to standardizing on its three primary product platforms. A significant business model change can disrupt a company's short-term performance, but the strategy appears to be planting seeds for long-term growth.
Palo Alto Networks should see plenty of growth opportunities for its network and cloud security technology moving forward, as more companies adopt cloud-based solutions and look to innovative solutions, like AI, to help protect themselves from threats.
Sony: An international stock with durable growth ahead
Electronics giant Sony Group(NYSE: SONY) is well-known among consumers, likely more so for the PlayStation gaming console than anything else. Sony is currently on its fifth-generation console, the PlayStation 5, which has sold over 77 million units since its launch in November 2020.
Investors who aren't gamers may underestimate the size of the video game industry. According to Straits Research, the global video game industry was worth approximately $221 billion last year, and could grow to over $424 billion by 2033.
Sony has done so well with PlayStation that archrival Microsoft, which owns the Xbox platform, has started to bring some exclusive titles to the PlayStation, a sign that Sony and Nintendo could be running away with the console market. Sony is a fantastic stock for investors looking for an international stock with durable growth ahead.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Netflix, Nvidia, and Tesla. The Motley Fool recommends Palo Alto Networks and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
