Benjamin Graham, the father of value investing, defined an intelligent investor as the one who does not try to time the market but someone who values the ‘time in the market.’ With the theatrical vicissitudes witnessed throughout 2020, it is a little tempting to just cut and run. However, the economy is slowly rebounding.
Now more than ever, it is important to focus on investing in long-term stocks. To help you get started, we have created this handy guide to help you discover the best long-term stocks to invest in.
Why Should You Invest in Long-Term Stocks?
Long-term stocks provide you with the opportunity to earn significantly more than you could ever earn with short-term stocks. Unlike short-term stocks, you have to focus on the long-term perspective. Sudden market movements should not scare you to the point of exiting the market.
By focusing on the long-term, you successfully escape the short-term noise that usually derails many beginner investors. With a little patience, you can successfully ride out the bumps. Moreover, you do not have to spend a lot of time focused on the market.
You just have to invest your money and then spend your time doing things you love rather than worrying about market movements.
Best Long-Term Stocks
- Berkshire Hathaway
- Johnson & Johnson
- Coca Cola
Amazon is among the largest e-commerce retailer in the world in terms of revenue. In 2019, Amazon collected a total revenue of $280.5 billion. Its average annual return from 2016 to 2020 has been 38.93%. Moreover, it was the second to surpass $1 trillion in market capitalization on September 4, 2018. Currently, Amazon’s founder and CEO, Jeff Bezos, is the richest man on earth, with an astounding net worth of $181.5 billion.
Amazon makes a great long-term stock to invest in, as it is the fastest-growing company globally. In the past 5 years, it has generated a share price growth of 400%. Amazon’s September quarter revenue rose 37% year over year to 96 billion.
In case you are not familiar with Alphabet, the company owns both Google and YouTube. In addition, it sits on a ton of money and marketable securities, about $132.6 billion as of September 30, 2020. On January 16, 2020, it was the fourth company to surpass a market capitalization of over $1 trillion. Alphabet stocks represent excellent long-term stocks you can invest in right now and make major returns in the future.
On January 17, 2021, Berkshire Hathaway’s Class A stock was a whopping $350,320! Most people would need to work several years to be able to afford just one share. The Class B share trades at an affordable price of $233.49.
The benefit of buying Berkshire stock is like investing in Buffet, who has successfully managed to build his wealth through stocks to occupy the list of the world’s top 10 richest individuals. Currently, he has a net worth of over $88.1 billion. Had you invested $1,000 in Buffet in 1965, your investments would have been worth over $27 million in 2020. Therefore, what are you waiting for, invest today!
On August 2, 2018, Apple hit a market capitalization of $1 trillion. It was the first U.S. company to achieve this milestone. Berkshire Hathaway has the largest holding of Apple shares in its portfolio with a market value of $109 billion. If this does not excite you, then I do not know what will.
In the third quarter of 2020, Apple had a 40% share of the U.S. domestic smartphone market. It also led in the tablet sector with a market share of 29.2%. On November 12, 2020, Apple paid a quarterly dividend of 20.5 cents after it had paid a previous dividend of 82 cents on August 13, 2020.
Johnson & Johnson
Johnson & Johnson is a New Jersey-based pharmaceutical and health care giant that has been in operation since 1973. Since then, the value of the company’s cash dividends has risen every single year. Last year (2020), the company paid out dividends totaling $3.98 a share, up from $3.75 in 2019.
Johnson & Johnson offers excellent long-term stocks that can enable you to accumulate numerous shares, which can be worth a lot when they appreciate. You might want this stock into your long-term portfolio as this pharmaceutical giant does not seem to be going anywhere.
Warren Buffett, through Berkshire Hathaway, has been holding Coca Cola shares since 1988 when the share price was below $4. Currently, share prices at trading at $53. Currently, Warren has a holding of about $19.7 billion in Coca Cola shares.
Moreover, his company collects above $600 million in annual dividend income from the firm. Since 1995, Warren has collected about $7 billion in dividends from the company. As you can see, Coca Cola has been around for a very long-time. Therefore, if you are still wondering which company to invest in for the long-term, Coca Cola should be among your top choices.
As reiterated repeatedly, all stock market investing comes with risk. However, the above list of several long-term stocks should offer an excellent way for you to diversify your portfolio. Although these stocks have high barriers to competition and are fairly expensive, they should deliver long-term value to anyone who buys them.