Investing in the stock market is an excellent way to build wealth, and you can get started today with as little as $500.
Blue chip stocks are an excellent place to start if you're looking for investments that can withstand the test of time. These companies have stable earnings and enjoy robust advantages that enable their businesses to thrive across economic cycles.
Here are two blue chip stocks under $500 you can buy today and feel confident about holding for the long haul.
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1. Marsh & McLennan
Over the past few years, companies have dealt with extreme uncertainty from the pandemic, supply chain issues, market volatility, climate-related disasters, and geopolitical risks. Marsh & McLennan (NYSE: MMC) thrives in this environment.
Marsh & McLennan is a top advisor for companies worldwide, helping them navigate a changing world and manage risks by advising them on insurance. Marsh earns fees from its consulting services and commissions from its insurance brokering, where it acts on behalf of its clients to help them obtain insurance or reinsurance policies.
Marsh's insurance business provides it with incredible stability. That's because insurance products are always in demand as companies look to protect themselves from unforeseen circumstances. Not only that, but insurance premiums tend to grow alongside the economy and during times of high inflation.
Over the last several years, insurance prices have steadily risen in the face of inflationary pressures in the economy. Last year, Marsh's risk and insurance business raked in $14 billion in revenue, representing an 11% increase year over year.
Its consulting business is another key source of revenue, although this can fluctuate a little more depending on the state of the economy. Last year, Marsh brought in $8.7 billion from consulting, a solid 7% increase year over year.
Marsh & McLennan has over a century of experience providing advice and brokerage services, and has gained respect as a trusted company advisor. It also has a broad global reach and an extensive knowledge base to draw from, giving it a strong competitive advantage.
This advantage is evident by its solid track record of long-term performance, delivering investors a 12% total return annually over the past three decades. At around $207 per share, Marsh & McLennan is an excellent business you can buy and hold for the long haul.
2. Blackstone
There are two kinds of asset managers: Conventional-asset managers invest in stocks and bonds, while alternative-asset managers invest in real estate, private equity, or structured products. With over $1 trillion in assets under management (AUM), Blackstone(NYSE: BX) is the largest alternative-asset manager in the world.
Blackstone earns fees as a percentage of its total AUM. For that reason, growing its AUM is crucial to its business success. Since 2013, Blackstone has ridden the wave of alternative-asset growth, and its AUM has surged from $266 billion to over $1 trillion.
More recently, higher interest rates have weighed on alternative investments. For example, over the last few years, the asset manager has seen significant redemptions from its Blackstone Real Estate Income Trust (BREIT) investments. The redemptions began amid the market volatility in 2022. However, the company had a process to limit a "run" on the fund, and redemption requests have slowed down significantly this year.
Blackstone did a solid job of navigating market volatility and has grown its AUM from $881 million in 2021 to over $1 trillion last year, showing demand from investors for alternative investments remains robust.
Growth in this area is likely to continue, too. According to the research firm Preqin, global alternative assets under management are expected to reach $24.5 trillion by 2028, representing an 8.4% annual growth rate over the next several years. Blackstone is well positioned, and at $122 per share, investors can scoop up the stock today to capitalize on that growth.
Should you invest $1,000 in Marsh & McLennan Companies right now?
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Courtney Carlsen has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Blackstone. The Motley Fool has a disclosure policy.
