10 Stocks to Buy and Hold for a Lifetime

In a market environment that greatly promotes constant activity by investors who appear to be aiming to double their money every week, the subject of stocks to buy and own forever seems out of place. Still, this kind of approach should be applied for our investing capital.

For more stock buying tips also check out: Buying and Selling Shares: Tips to Beat the Market

Investing in companies that you want to hold for a lifetime has proved to be an excellent and profitable way to invest. It encourages investors to have a long-term prospect of a company’s outlook, and eliminates some of the emotions out of short-term swings in the market.

In a 1988 letter to shareholders, investing titan Warren Buffett said, ‘Our ideal holding period is forever.’ Taking this statement seriously would beg the question, ‘Which stocks are worth owning forever?With that as the backdrop, here is a rundown of 10 stocks that you can buy and hold for generations.

International Business Machines Corporation (IBM)

During the past months, Buffett has sold 30 percent of his IBM stake and this might make you think twice about investing in IBM for the long haul.

Still, there are several reasons to consider IBM for the long term. One, its price/earnings ratio (P/E) is at 12.8. Two, a company that has 414,000 employees is not going anywhere anytime soon.

Lastly, the tech sector is looking into the development of artificial intelligence and it is there that IBM has a huge advantage because of its question-answering computer system Watson, which is making big progress in the banking industry.

Know how to prevent mistakes in the stock market by reading Buying and Selling Shares: 10 Mistakes You Should Avoid.

Johnson & Johnson (J&J)

Also known in financial lingo as a dividend aristocrat, J&J for 55 years now has raised dividends every single year. Back in June 2017, the company paid out a dividend of $0.84 a share. You might see that as a small change, but it could be bigger than what you see.

Over a long period, reinvested dividends can build up a large amount of shares which can be worth a significant amount if those shares appreciate and they have just that. For the past five years, the stock has doubled with a continuous climb up the ladder to a current share price of $140.

J&J’s success and stability come from its diversified business. The company runs 3 divisions including pharmaceuticals, medical devices, and consumer.

Dover Corp.

This Illinois-based conglomerate focuses on fluid management and is a global manufacturer of industrial products with annual revenue of approximately $7 billion.

As regards dividends, Dover’s 2017 dividend stood at $0.44 a share, which is more than twice the $0.16 per share offered a decade ago. Dover’s dividend is also able to beat J&J seeing its yearly winning streak going on 61 out of 62 years.

Meanwhile, Dover’s stock shows fluid management of a different kind. Over the last 12 months, shares of the company rose 20 percent and trades at $79 per share.

McDonald’s Corp.

Between 2012 and 2014, the world’s biggest restaurant company suffered from low market share and weak sales. This resulted to headlines containing the words ‘McDonald’s’ and ‘mojo’ in it, accompanied by the phrase ‘fallen arches’.

At the center of customer dismay and investor disbelief was CEO Don Thompson, whose efforts to offer more choices unfortunately threw Mcdonald’s menu into confusion. After Thompson left the company in late 2013, shares of McDonald’s rose over 60 percent and were trading at $155.

Market cap of the fast food giant currently stood at $128.84 billion.

Berkshire Hathaway Inc.

Betting on Berkshire means betting on Buffett – rather a comforting thought – and a secure set of companies such as insurance firm Government Employees Insurance Company Inc. (GEICO), ice cream maker Dairy Queen, paint producer Benjamin Moore & Co.

At $314,750.00, the Class A shares is extremely high in price. It could take about 3 to 5 years to purchase a share. Then again, there is Berkshire Hathaway Class B, which trades at $210 per share.

If you bought into Berkshire 5 years earlier, you could have doubled your money. That is even better than getting a free supply of Blizzards or bricks.

Apple Inc.

Today, this high-tech innovator of the iPhone is the most valuable publicly traded company in the world with a stock that has been hitting record high after record high since February.

In August, Apple became the first US company worth more than $1 trillion on a public stock market, and its shares recently reached another record high of $230, topping its previous record of $229.67 set on September. A stock price of $230 translates to a market cap of almost $1.1 trillion.

Apple’s mid-term future seems leaning on the positive side as well, since there is the booming smartphone business in India and China to exploit.

Microsoft Corp.

Microsoft has benefited from a recovery worthy of its 1990s glory days. Since the retirement of Steve Ballmer as CEO, Microsoft’s stock has gone up by 87 percent and now trades at nearly $116 per share.

The tech giant at present owns professional network LinkedIn, telecommunications app software Skype, and video game platform Xbox.

Amazon.com Inc.

Started as an online bookseller, Amazon is now the one writing the book for high-tech relevancy and innovation.

Here is how Amazon’s leadership in the e-commerce industry translates into an eye-catching shareholder value: a stock price that enabled the online retailer to break through the trillion-dollar barrier valuation.

Breaching the thousand-dollar mark, shares of Amazon are now at $1,952.76. Its stock price has gained 40 percent over the previous year alone, with not one significant drop along the way.

Alphabet Inc.

Parent company of search engine giant Google, Alphabet’s market cap currently stands at $807.95 billion and has enabled investors to generate returns of 230 percent for the past few years.

Aside from being the main operator of Google, video-sharing platform YouTube, and the Android mobile system, Alphabet is also significantly loaded with money.

One criticism of the California-based conglomerate, however, has been its moonshots. Still, its self-driving vehicles could fetch large rewards as investors and even the driving public shows interest towards the idea.

Wells Fargo & Co.

Wells Fargo remains as one of the world’s largest banks by market cap in the face of its fake accounts scandal, which led to the dismissal of CEO John Stumpf. The bank has been hit with a range of issues over the past several years, starting with the fake accounts scandal in September 2016.

Since the issue came to light two years ago, Wells Fargo has continually exerted efforts to move past the scandal. If it resolves current problems, Wells Fargo could be an investment deal with steady power and strong growth potential.

Conclusion

When you invest in high-quality companies at fair or better prices, there is little else to do but wait for the company to compound your money over time.

Buying stocks that you can own for a lifetime, which is also Buffett’s preferred holding period, has been proven to improve your chances of success in the stock market.

While no company is risk-free, holding stocks with sustainable competitive advantages and a visionary management for decades can greatly boost returns as blips stabilize and compounding produces the desired result over the years.

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