Best Stocks To Buy For Long-Term

What are the best stocks to buy for the long-term?

Definitions

Prior to diving deep into long-term stock selection, let's make sure we are all on the same page regarding what “Long-term” actually means.

In stock market investing, the timelines for short-term stock investments, medium-term, and long-term horizons are defined as follows:

• Short-term. This refers to investments held for a duration of days, weeks, or even a few months. Investors focusing on short-term gains aim to capitalize on price fluctuations or specific events

• Medium-term. Refers to investments held for several months to 2-3 years. Investors in this category often seek to benefit from trends or developments within a defined timeframe

• Long-term. Long-term equity investments may span many years or even decades. These investors prioritize sustained growth and wealth accumulation, often relying on the power of compounding and market stability

In this article, this is what we will focus on, investing in companies for a bare minimum of 3 years and, as stated, potentially decades.

Below, we delve into how we narrow down the best long-term stocks to be placed in our esteemed list.

Long-term selection criteria

When selecting a portfolio of stocks for long-term investment, successful investors typically meticulously analyze an extensive set of a company’s financial data, creating a specific criteria, which prioritizes stability, consistent growth, competitive advantage, effective management, and valuation.

This criteria includes, but is not limited to, the following:

• Stable financial performance. Achieved over several years, indicating resilience during fluctuations in regional or global economic fluctuations

• Revenue and profit growth. A history of sustained revenue and profit growth suggesting the business is expanding and generating consistent returns for shareholders

• Strong competitive position. A competitive advantage, such as a unique product, strong brand, or market dominance, helping the company maintain sustainable profitability

• Dividend history. For income-focused investors, a history of increasing and paying dividends, provides a steady stream of income

• Low debt levels. Companies with manageable debt levels are preferred, as high debt is an additional risk during uncertain economic times and conditions

• Cash flow. Positive and increasing cash flow, is a barometer of a healthy business. It ensures the company can reinvest in growth and cover expenses

• Management quality. Skilled and ethical management, ensures decision making positively impacts the company's long-term prospects

• Market position. The company's market share and position in its industry should be strong or improving

• Economic moat. A company's ability to maintain a competitive edge over its peers, is valuable for long-term investment

• Diversification. A diversified portfolio across different sectors, spreads risk and reduces vulnerability to industry-specific downturns

• Global economic trends. Global economic trends and potential tailwinds, or headwinds,can affect the industry space

• Valuation. The stock price versus its intrinsic value is crucial in determining if reasonably priced or undervalued

• Long-term vision. A well-defined and executable long-term vision indicates forward-thinking management

• Regulatory and environmental factors. How regulatory changes or environmental considerations could potentially impact the company's future

• Risk management. Recognizing and managing risks through diversification, hedging, or other strategies

Top 8 stocks to buy and hold for long-term

Based upon the aforementioned criteria, Traders Union team of financial market experts have compiled the following list of companies whose stock price could well outperform the broader market continually in the long-term under current fundamentals and market conditions.

(AAPL) Apple Inc.

Known for its financial stability, product innovation, and strong brand.

Consistent financial performance, robust revenue and profit growth, enduring brand strength, and a history of shareholder-friendly actions like dividends and buybacks. An attractive choice for sustained value appreciation.

(MSFT) Microsoft Corporation

A leader in the technology sector with consistent revenue and profit growth.

Stable financial performance, sustained revenue and profit growth, a dominant position in the tech industry, and commitment to innovation. These attributes offer long-term investors the potential for enduring value and growth.

(AMZN) Amazon.com Inc.

Dominant in e-commerce and cloud computing, with a history of profit growth.

Stands out due to its strong financial performance, sustained revenue and profit growth.

(GOOGL) Alphabet Inc.

The parent company of Google, boasting a powerful market position.

A compelling choice for long-term investors due to its stable financial performance, market-leading position in digital advertising and technology, and a commitment to innovation, placing it at the forefront of long-term growth potential.

(JNJ) Johnson & Johnson

A healthcare giant with a strong dividend history.

An appealing long-term investment with its consistent financial performance, strong presence in the healthcare sector, and a history of dividends. Its focus on healthcare essentials positions it well for enduring growth and stability.

(PG) Procter & Gamble Co.

A compelling choice for long-term investors due to its consistent financial performance, enduring consumer goods leadership, and a history of dividends. Its stable products portfolio fosters resilience and growth over time.

(BRK.B) Berkshire Hathaway Inc.

Led by legendary investor Warren Buffett and known for its skilled management, diverse holdings,and focus on value investing. This conglomerate offers a unique opportunity for enduring growth and wealth accumulation.

(V) Visa Inc.

A standout option for long-term investors, characterized by low debt levels, strong cash flow, and a dominant position in the global financial services sector. These attributes offer stability and potential for sustained growth over time. Read also: Top space stocks to invest in the TU article.

Best brokers to buy bank stocks

eToro

eToro Review

Open an account

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

The eToro broker was founded in 2007. The company promotes itself as a social trading platform working with traders from over 140 countries. The broker has several divisions operating under different jurisdictions and licensed by different regulators. For example, eToro (Europe) is licensed by the Cypriot regulator CySEC (109/10) and eToro (UK) is licensed by the British regulator FCA (583263). The broker also has a representative office in Australia and the USA.

Revolut

Revolut Review

Revolut is a British fintech company that has been providing investors with accounts for trading precious metals, cryptocurrencies, and stocks listed on U.S. exchanges since 2015. The broker offers its clients access to investing in stocks and ETFs on European stock exchanges. For organizations and private clients, the company offers a multi-currency account with the possibility of exchanging currencies at the current inter-bank exchange rate. Revolut is supervised by the Financial Services Authority (FSA).

Is long-term investing a good idea in 2024?

Long-term investing has always been a cornerstone of a sound financial strategy, and this principle still holds true in 2024 and very likely will for decades to come.

There are several compelling reasons supporting this perspective.

Firstly, it's crucial to acknowledge the cyclical nature of financial markets. Historically, markets have exhibited a pattern of fluctuations, where short-term volatility can obscure long-term trends. Institutional investors understand that trying to time these cycles is an elusive endeavor. Therefore, they opt for a long-term horizon to weather market ups and downs, benefiting from the compounding of returns over time.

Moreover, the historical performance of key indices, like the S&P 500, which include many of the best long-term stocks,has shown that the longer one stays invested, the greater the probability of positive returns. Over extended periods, markets have consistently delivered positive returns, even when punctuated by periods of turbulence.

Investors will be well served to continually read and educate themselves, to be aware of, and understand the enduring importance of identifying areas of value.

A professional investor is always keenly aware of industries poised for growth in the long run, such as AI, renewable energy, technology, and healthcare.

These sectors hold potential due to global trends, such as sustainability goals, digital transformation, and an aging population. Diversification across these promising areas helps mitigate portfolio risk.

In summary, the wisdom of long-term investing persists because it aligns with the inherent cyclicality of markets, leverages the historical track record of sustained growth, and capitalizes on the potential in sectors set to shape the future.

Embracing long-term investing is not just a strategy for 2024 but a timeless approach to wealth accumulation and preservation.

Risks of long-term investing in stocks

Long-term investing in stocks offers the potential for substantial wealth accumulation, but it comes with inherent risks. Diversification, staying informed, and maintaining a disciplined approach are crucial for mitigating these risks and achieving long-term financial goals.

Continual assessment and risk management to protect and grow an investment portfolio is a serious undertaking that requires a thirst for knowledge.

How to invest in stocks | Tips for beginners

Before we dive deep into the selection process for creating a sound long-term stock portfolio, let's first revise properly structured guidelines for how to efficiently invest in stocks (also known as equities).

Remember that investing in stocks carries risks, and past performance is not indicative of future results.

A sound, tailored strategy that aligns with your specific goals and risk tolerance will serve you well.

Additionally, regularly monitoring your investments and adjusting your portfolio when necessary, will assist you in reaching your financial objectives.

By following these steps and maintaining a disciplined approach, new investors can embark on a rewarding journey into the world of stock investing.

A final note on creating a suitable portfolio for your individual investment objectives

Individual investors must recognize the significance of aligning their investment strategy with various crucial factors. Age is pivotal; a younger investor has time on their side, allowing them to embrace higher risk and ride out market fluctuations while accumulating capital. In contrast, an older investor might prioritize capital preservation and steady income, having less time to recover from losses.

Investment objectives are equally vital; whether it's wealth accumulation, income generation, or a blend of both, the strategy must be tailored accordingly. Risk tolerance, too, varies among individuals. Some can withstand market volatility, while others require a more conservative approach to safeguard their financial well-being.

Time available for portfolio monitoring is a practical consideration. High-maintenance strategies may not suit those with limited time or expertise. Understanding global economic and geopolitical events, as well as external factors impacting financial markets, empowers investors to make informed decisions.

Liquidity requirements are paramount. Investors must ensure they have readily accessible funds for urgent needs like mortgages, education expenses, or unforeseen emergencies, preventing the need to liquidate long-term investments prematurely.

Ultimately, the key is a well-balanced and diversified approach, influenced by age, investment objectives, risk tolerance, and liquidity needs.

Seeking additional guidance from accredited wealth advisors and fund managers ensures a well-informed and personalized investment strategy, allowing investors to harness their unique circumstances for overall financial success that matches an individual's investment objective, risk appetite and lifestyle requirements.