One of the most powerful advantages of investing is a long-term mindset. You can better position yourself to take advantage of opportunities by taking a long-term view of the markets. Buying and holding the shares of the best companies is a proven way to build wealth in the stock market. It is important to note that investing in the stock market involves risk and there is no guarantee of success. All of the benefits of this investment strategy can help you secure your financial freedom. You can build a solid foundation for your financial future by following this strategy.
A long-term buy-and-hold approach can help you avoid taxes. This strategy can help investors maximize their returns over time. You don’t have to pay taxes on your share price gains until you sell. Capital gains taxes are due so it’s wise to plan for them. You can defer your tax payments if you hold off on selling. If you want to maximize your financial gain, you should wait as long as possible. Allowing your gains to compound for longer periods of time can help you create more wealth. If market conditions change, you can adjust your investments more frequently.
Knowing which stocks to buy is the key. You need to do your own research and understand the stock market to make sound investment decisions. Below, you can find a list of our five best long-term stocks to buy. Each one is a high-quality business that we are confident is positioned to grow for years ahead. Investing in these stocks can help ensure your portfolio’s long-term success.
10 Best Long-Term Stocks to Buy Now
Here are the top 10 long-term stocks to buy in 2023:
- Amazon (AMZN)
- Alphabet (GOOG)
- Mastercard (MA)
- Shopify (SHOP)
- Apple (AAPL)
- Tesla (TSLA)
- Meta Platforms, Inc (META)
- Disney (DIS)
- Zoom (ZM)
- Intuitive Surgical (ISRG)
Before diving into the background on each one of these stocks, it is important to lay out the qualities we searched for when narrowing down our list of best long-term stocks to buy. We looked for stocks that have a history of long-term capital appreciation, as well as sound fundamentals and a good track record of dividends.
- Competitive advantages : Warren Buffett often describes competitive advantages as a “moat.” How entrenched is a company to preserve long-term earnings growth and maintain market share across the long run. Continually investing in research and development to stay ahead of the competition is one way a company can ensure they remain entrenched in the market. There is an example of a high-moat product. A strong brand and reputation has enabled them to maintain their high-moat status in the market. Even though it costs billions to build a new search engine, consumers who have used Google for years have little reason to switch to a competitor.
- A history of share price appreciation : The stock market has winners more often than not. The key to long-term success in the stock market is to identify winning stocks and stay invested for the long term. While many investors look for opportunities in companies whose stock prices have fallen, we are looking for the opposite. We’re looking for companies that show promise for future growth and have their stock prices steadily increasing. Strong growth in their free cash flow, earnings, etc., can sustain remarkably extended runs of performance. Strong fundamentals can be a sign of a company’s ability to weather economic cycles, allowing it to remain competitive in the long-term.
- Strong growth rates : Growth stocks are not all winning investments. When choosing which investments to make, investors should consider the risk associated with each type of stock, as well as their own goals. If you are looking for stocks that can follow in the footsteps of multi-decade winners such as Amazon or Apple, you will want to see high growth rates that can compound over time. A company’s competitive advantages include a strong brand name or large market share.
The stocks listed below have each of these qualities. These stocks are a good place to start. No stock is a “sure thing” and each investment carries risk, but we are confident that each of these companies is an excellent choice for long-term investors. These stocks are well-positioned to weather market downturns and offer investors the potential for healthy returns over time.
1. Amazon (Nasdaq: AMZN)
It is difficult to imagine a company with a better position to profit from long-term trends than Amazon. Amazon has established itself as a leader in the digital economy due to its success in e- commerce and cloud computing.
The e-retailer dominates online retail in the U.S. There are many areas of the world. In countries such as China, India, the United States, Brazil, Australia, Canada, France, and Germany, this phenomenon is observed. The global cloud computing leader is its Amazon Web Services division. Adding in a fast-growing digital advertising business, rapidly expanding logistics and shipping operations, a slew of popular hardware devices, and intriguing growth opportunities in grocery stores and healthcare, it is clear that Amazon gives its shareholders many ways to profit. Amazon has a huge competitive advantage in the marketplace.
More people are shopping and working online. The shift to online activity has had a profound effect on how people conduct business. It means more money for Amazon and more money for its investors. Amazon is becoming more attractive as an investment option as it continues to expand.
2. Alphabet (Nasdaq: GOOG)
The parent company of the well-known search engine, as well as other related services, is called Alphabet. Since its founding in 2015, Alphabet has been a major player in the tech industry.
After generating over $183 billion in revenue in 2020 and over $257 billion in revenue in 2021, the company became one of the most profitable in the world.
3. Mastercard (NYSE: MA))
Mastercard is one of the world’s leading companies in processing online payments. It has been a leader in digital payments for more than 50 years, with an aim to make financial transactions simpler and more secure.
Mastercard is a smaller company with faster revenue growth and more room to grow than Visa, which has a bigger market share. The long-term potential for growth is clear because the company has a strong presence in the global payments industry. In the past 5 years, the company’s annual earnings have increased by almost 20%, and its stock has delivered an average annual price appreciation of close to 7 percentage points over the S&P 500.
Get the insights that matter to your portfolio by investing in alternative assets. You can get expert advice to help you make better investment decisions. The Public.com app is free to download.
4. Shopify (NYSE: SHOP)
It is possible to make money from the migration of retail sales to online channels. Over the next few years, the stock is likely to rise as more and more people shop online. It is an operating system that powers more than 1 million businesses around the world. It’s flexibility allows businesses of all sizes to tailor it to their needs. There has never been a greater demand for its online retail solutions. Companiesneed to be prepared to embrace newer technologies in order to stay competitive.
You can use the tools to turn a website into a business. You can use a variety of features on the platform, such as marketing tools. You can add buy buttons and credit card processing in a few clicks. It’s easy to sell your products online with this integration. You can get access to more services, such as shipping and fulfillment. It is used by large corporations. Small businesses use it to reach potential customers quickly and easily.
In this way, the revenue grows with that of the merchant customers. As a result,shopify is positioned to become the leader in the industry. Everyone wins in this formula. Ensuring that the company is run in a responsible and ethical way is important.
5. Apple (Nasdaq: AAPL)
This stock is a good choice for long-term investors. The company designs and produces a range of popular devices, including the iPhone, iPad, and Macbook. Our daily lives are enriched by these products and services.
Apple reports high-ranking revenue numbers. If you invested $5,000 five years ago, the shares would be worth $15,000 today. This shows the power of investing in well-established stocks. It seems that Apple is going to continue to grow. Apple is a leader in the tech industry because of its quality products and services.
6. Tesla (Nasdaq: TSLA)
If you’re a fan of electric vehicles and believe in the future of electric transportation, then you should buyTesla. Their vehicles are some of the most advanced on the market, and they are a leader in the electric vehicle industry.
The company is more than just a car company. They have solar panels, Powerwall home batteries, and more. The solar and battery industry is also being disrupted. As renewable energy sources become increasingly necessary for the future of our planet, they are researching and developing innovative technologies to make solar energy more accessible and affordable.
Many, including Musk, believe that we are still in the early stages of what could eventually become. There’s no way to know how far they may go as they push the boundaries of what’s possible.
7. Meta Platforms, Inc (Nasdaq: META)
Mark Zuckerberg is the creator of Meta, formerly known as Facebook. Meta is the largest and most successful social media platform in the world with over two billion users. Instram is one of the companies that the company also owns. Billions of dollars have been invested into these companies in order to expand its presence in the tech industry.
Meta has platforms that serve over 3 billion active users. There are a variety of services on these platforms. It is 1 out of every 3 people on the planet. The importance of taking action on global warming is highlighted by this stat. With such a large audience, Meta’s stock is likely to continue growing. This shows the company’s success in providing innovative and reliable products.
8. Disney (NYSE: DIS)
Disney is a rare stock that you buy and hold for a long time. It’s a great long-term investment for both casual investors and those who want to build a portfolio. The entertainment titan has rewarded its shareholders for decades with its timeless collection of beloved characters and storylines. It is poised to continue to do so for decades to come. It’s a trend that looks set to continue, as the company has become so successful in such a short period of time.
Disney has been able to adapt to changing consumer trends. Disney has weathered the test of time and is now seen as one of the most powerful brands in the world. This can be seen in the success of Disney+. Disney+’s success will continue for years to come as it adds more content and original programming. Disney’s new streaming service had 86 million subscribers in its first year and has grown to 160 million by the end of the year. It is one of the most popular streaming services in history.
9. Zoom (Nasdaq: ZM)
Did some companies scale back their contracts after the swine flu? Sure.
It is now firmly entrenched across most Fortune 500 companies due to the fact that many companies now choose to give employees more flexibility.
As investors move from digital stocks that boomed during Covid and into reopening stocks, if you’re a long-term investor you can sit on the company for years to come. The company’s competitive advantages and its position at the center of the digital transformation of the workplace will remain for a long time.
10. Intuitive Surgical (Nasdaq: ISRG)
The industry of robotic surgeries has quickly become a massive one. In order to meet the needs of the growing population of people who are interested in robotic surgery, the company is continuing to innovate and make improvements. Thanks to its dominant market position, Intuitive grew sales four-fold last decade. The company is well-equipped to continue its growth trajectory. Its profit grew six-fold. The surge of investor confidence resulted from the incredible performance. Sales took a small hit in 2020 as many surgeries were delayed during Covid, but in the fourth quarter of 2020 the company saw sales growth of 4% from the prior year. We are confident that sales will continue to grow.
The da Vinci robotic devices are riding a megatrend on robotic surgeries and the company has a world-class business model that produced better than 30% profit margins in 2019. In 2020 and beyond, the company’s strong financials and increasing demand for robotic surgeries make it a compelling investment opportunity. If you are looking for a stable company that can grow for decades to come, Intuitive should be near the top of your list. It has been profitable for the past five years and is expected to do so in the future.
Should You Invest for the Long-Term?
Why is long-term investing so powerful? Long-term investing allows you to take advantage of the compounding effect and maximize your returns over time, making it a powerful strategy for creating wealth. It comes down to one word: compounding. Successful long-term investing requires compounding, which is the key to building wealth over time.
You can think of compound returns as a snowball rolling downhill. By earning returns on top of the returns you already earned, your wealth can grow faster than you think. Calculating returns can help you realize the full potential of your investments and grow your wealth more quickly than you ever thought possible.
(I have an example of the power of compounding at the bottom of this article and trust me, it’s mind-blowing stuff!)
Motley Fool Stock Advisor
Happening Now: Motley Fool is offering 55% off for new members
If you’re ready to make investing part of your strategy for financial freedom, take a look at The Motley Fool’s flagship investing service. If you want to reach your financial goals, Stock Advisor can help. They just announced their top 10 best buys across the entire stock market. Over the long term, these “best buys now” have the potential to generate impressive returns. You should check out the full details if you are starting with $100, $500, or more.
Long-Term Investing Tips
Of course, with thousands of companies trading across the stock market, these five long-term stocks to buy are just a fraction of the opportunities in front of you. Here are some important tips to think about if you want to invest or build a portfolio. If you want to see positive returns, you need to be patient and disciplined, because investing is a long-term strategy.
The first index funds were invented in 1975. Today, index funds are some of the most popular options for investors looking to gain exposure to entire markets. What is the power of index funds? Investing in index funds gives investors the chance to get consistent returns with minimal effort, and they also give investors access to a wide variety of investments. They can be traded like stocks. Cryptocurrencies can be used as a medium of exchange for goods and services. Their expense fees can be very low. They offer a wide range of investment options and provide personalized advice.
You can buy index funds that can track the S&P 500 or the Dow Jones Industrial Average, purchase index funds that track short-term movements just like the Volatility Index (VIX), or even invest in innovative companies likeTesla. No matter what your investment goals are, there’s likely an index fund that can help you meet them.
Buying index funds that offer diversified exposure has never been easier or cheaper, the bottom line is, while we have discussed some outstanding individual stocks for long-term investors, buying index funds that offer diversified exposure has never been easier or cheaper. Investing in index funds can provide a solid foundation for long-term investors. If the idea of managing a portfolio of stocks is intimidating, then I encourage you to read our complete guide on index funds.
Every stock you buy has risk in it. It is important to understand the risks associated with investing in stocks. Amazon’s valuation is stretched by many on Wall Street, even though it has a market cap of $1.6 trillion. Some investors are cautious about Amazon’s stock price. Even the most entrenched technology stocks could be affected by a bear market.
You have to ask yourself what level of risk you are comfortable with. Outside technology, stocks like Warren Buffett’s Excellent returns and a stable balance sheet can be found in businesses that are diversified across industries. It’s an attractive option for investors who want to invest in a company with a proven track record of success.
If you’re looking to maintain exposure to high-growth areas like cloud computing but also want to minimize your risk, a stock like Microsoft (Nasdaq: MSFT) could be of interest. The market cap of the company is similar to that of Amazon. It is one of the most valuable companies in the world. It also has a dividend yield of 1%. Over the past year, investors have received dividends of $2.09 a share.
Microsoft has a P/E multiple of 35, which is lower than Amazon’s multiple of 95. Microsoft is a relatively low-risk option with the potential for strong returns in the long run.
Many of the market’s top-performing stocks come from areas such as SPACs, which are special acquisition companies that allow startups to begin trading without going through a traditional IPO process. Many of these opportunities are exciting, but remember that they carry significant risks. Before making a decision, it is important to consider the pros and cons.
Compound Interest of Long-Term Investments
I talked about keeping a long-term focus on your investments and the power of compounding. It is possible to build wealth by compounding your investments over time. Let’s take a moment to look at what happens when you keep your money invested for a long time. The longer you keep your money invested, the more time it will take to grow.
The stock market, as measured by the S&P 500 — an index of the 500 largest companies in the United States — has historically returned about 10% per year on average.
Here’s what that would look like to someone who invested $10,000 in stocks:
- After 10 years, you’d have $25,937
- After 20 years, you’d have $67,275
- And after 30 years, you’d have $174,494
The numbers would grow from there. It appeared that nothing would stop the growth of the company. The bottom line? When you need it the most, you should be able to get your money compounded earlier.
Better still, when you invest in elite businesses with strong competitive positions and outstanding growth prospects, such as the ones listed here, you can generate even higher returns, and create a fortune for yourself along the way.
Are you looking for more stock ideas? We have a list of stock picks for short-term opportunities. Try our top 15 stocks for beginners that feature three times the number of stocks you just discovered above!