If you are an investor, it is important to familiarize yourself with the big companies that drive the performance of the entire stock market.
Some companies, due to their size and influence, can play a huge role in the returns of large markets. In particular, Facebook, Amazon, Apple, Netflix and Google are considered extremely influential and are known as FAANG companies.
Anyone who has invested in FAANG companies over the years has probably made a lot of money, especially since it is possible to take advantage of inflation to increase their portfolio. .
Why are FAANG shares still a real investment opportunity?
FAANG stocks deserve special attention, even if you don’t invest in them directly. This is because they represent a large portion of the total market capitalization of the market and their price movements affect the entire exchange.
Source: Statistics
Maxim Manturov, head of investment research at Freedom Finance Europe, says: “You can consider companies that have ‘price power’ and can raise the prices of their products without too much of a problem (mainly Blue Chips), or companies that are less dependent on tangible assets to do business, including big tech companies like FAANG.Gold has often been seen as a hedge against inflation.In fact, many people have viewed gold as an “alternative currency”, especially in countries where the national currency loses its value. These countries tend to use gold or other hard currencies when their own currency fails.”
Facebook (FB)
The company went public in 2012, eight years after its founding, and is now the largest social media platform in the world. In 2019, Facebook has over 2 billion active users, expanding its offerings through acquisitions of Instagram, Oculus VR, WhatsApp, and more.
Facebook’s share price has risen over the years despite its disappointing IPO, and shares have more than doubled since the start of 2015.
Amazon (AMZN)
The company started selling books online in 1995 and is now the largest online retailer in the world. Amazon is also a cloud computing solution through its Amazon Web Services (AWS) division, online music and movie streaming, and even consumer electronics with the creation of the Kindle, Kindle Fire and Echo devices.
Investors may have grown impatient with Amazon because it took a while to make huge profits, but that’s no longer the case. Investors have been handsomely rewarded as Amazon shares have tripled since the start of 2016.
Apple (APPL)
He’s a longtime veteran of the FAANG Group, which dates back to the advent of personal computers in the 1970s and 1980s. Today, the company still makes computers, but it also derives almost half of its revenue from the sale of smartphones. It also generates revenue through apps, music streaming, cloud storage, smartwatches and launched a TV streaming service in 2019. Apple’s stock price has more than doubled since the start of 2016 .
Netflix (NFLX)
In some ways, Netflix is an outlier of this group, as its market capitalization is lower than that of the rest of the FAANG companies. On the other hand, its share of the market and the number of users which continues to increase every day makes it one of the most powerful companies on Wall Street.
Netflix went public in 2002 as a very different company, offering a subscription service to rent DVDs by mail. It gradually shifted to movie streaming, then introduced original content. It now has over 150 million subscribers willing to pay between $8.99 and $15.99 per month for its streaming service.
Google, Alphabet (GOOGL)
Source: Statistics
Alphabet is the parent company of Google, the world’s most popular search engine. It’s also now a smartphone maker and, through its venture capital arm GV, invests heavily in everything from self-driving car technology to smart cities to biotech. He also owns YouTube, one of the biggest social media platforms behind Facebook.
Investors who invested in Google early on did well, and even those who didn’t get in right away still made a profit. Stocks have more than doubled in value since 2015.
The advantages of FAANG shares
Although the covid-19 health crisis has affected all business sectors, FAANG shares will always remain an opportunity for investors. Indeed, the US stock market is worth more than $31 trillion, down from $10.7 trillion in 2001 before Netflix and Facebook went public.
In 2019, FAANG shares were valued at over $3 trillion, suggesting that these companies represent at least a tenth of the value of the US stock market. You therefore have a certain guarantee by opting for this type of action.
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