Are you looking for a reliable way to grow your wealth over the long term? If so, investing in stocks could be a smart strategy.
While the stock market can be volatile in the short term, history has shown that stocks tend to generate positive returns over the long term.
By buying and holding stocks for years or even decades, you can benefit from the power of compound interest, enjoy lower transaction costs, and ride out market fluctuations without panicking.
In this blog post, we’ll discuss 5 of the best long-term stocks to buy and hold, based on factors such as financial performance, market position, growth potential, and competitive advantages.
While these 5 stocks are not the only good long-term investments, they offer a strong starting point for investors who are looking to build a diversified portfolio.
Coinbase is a leading cryptocurrency exchange that has quickly become a household name in the world of digital assets. Founded in 2012 by Brian Armstrong and Fred Ehrsam, Coinbase allows users to buy, sell, and store cryptocurrencies such as Bitcoin, Ethereum, and Litecoin. As the popularity of cryptocurrencies has grown in recent years, Coinbase has positioned itself as a trusted and user-friendly platform for buying and selling these assets.
From a financial perspective, Coinbase has seen impressive growth since its founding. The company went public in 2021, and its revenue in the first half of the year was over $1.1 billion, more than double what it was in the same period in 2020. Coinbase also has a strong balance sheet, with over $4 billion in cash and investments as of June 30, 2021.
One of the reasons why Coinbase is a good long-term investment is the potential for continued growth in the cryptocurrency market. As more people become interested in cryptocurrencies and blockchain technology, demand for Coinbase’s services is likely to increase. In addition, Coinbase is well-positioned to benefit from the increasing institutional adoption of cryptocurrencies, as more banks and financial institutions begin to offer cryptocurrency products and services.
Of course, investing in Coinbase is not without risks. The cryptocurrency market can be highly volatile, and regulatory uncertainty remains a concern. Additionally, Coinbase faces competition from other cryptocurrency exchanges and platforms, both established and emerging. However, for investors who are bullish on the long-term prospects of cryptocurrencies, Coinbase represents a solid investment opportunity. With a proven track record of success and a leadership position in the cryptocurrency exchange market, Coinbase is well-positioned to continue to grow and succeed in the coming years.
Microsoft is one of the largest and most successful technology companies in the world, known for its dominance in the personal computer market and its suite of software products, including Windows and Microsoft Office. Founded in 1975 by Bill Gates and Paul Allen, Microsoft has become a household name, with a market capitalization of over $2 trillion as of early 2023.
From a financial perspective, Microsoft has been a consistent performer, with a strong balance sheet and steady revenue and earnings growth. In fiscal year 2021, the company’s revenue was over $168 billion, and its net income was over $61 billion. Microsoft’s stock has also performed well in recent years, with a total return of over 50% in 2021.
One of the reasons why Microsoft is a good long-term investment is the company’s continued focus on innovation and diversification. While the company’s core businesses of personal computers and software remain important, Microsoft has also made significant investments in areas such as cloud computing, artificial intelligence, and gaming. These investments have already begun to pay off, with Microsoft’s Azure cloud platform experiencing significant growth in recent years.
Another reason why Microsoft is a good long-term investment is the company’s commitment to sustainability and social responsibility. Microsoft has set ambitious goals for reducing its carbon footprint and increasing the use of renewable energy, and it has also committed to investing in communities and addressing social issues such as racial equity and access to education.
Overall, Microsoft’s history of success, financial strength, and commitment to innovation and social responsibility make it a solid long-term investment opportunity. While there are risks associated with investing in any company, Microsoft’s position as a leader in the technology industry and its ability to adapt and innovate make it a stock worth considering for long-term investors.
Tesla is a company that needs no introduction. Founded in 2003 by Elon Musk, Tesla is on a mission to accelerate the world’s transition to sustainable energy. With a product lineup that includes electric cars, solar panels, and energy storage systems, Tesla is at the forefront of the clean energy revolution. From a financial perspective, Tesla has been a standout performer in recent years. Its revenue has grown at an impressive rate, from $7 billion in 2016 to $31.5 billion in 2020. Its gross profit margins have also improved, from 19% in 2016 to 25% in 2020. Additionally, Tesla has generated positive free cash flow in each of the last four years, indicating that it is able to fund its growth without relying on external financing.
So why is Tesla a good long-term investment? For one, it has a dominant position in the electric vehicle market, with a global market share of around 16%. As more and more consumers and governments prioritize sustainability, demand for electric vehicles is likely to grow in the coming years, giving Tesla a strong tailwind. Additionally, Tesla is not content to rest on its laurels. The company is investing heavily in research and development, with a particular focus on battery technology and autonomous driving. This suggests that Tesla could potentially disrupt other industries beyond automotive, such as energy storage and transportation.
Of course, investing in Tesla is not without risks. The company’s valuation is notoriously high, and any misstep or failure to meet growth expectations could lead to a significant pullback in the stock price. Additionally, Tesla faces intense competition from traditional automakers and new entrants to the electric vehicle market. Regulatory challenges, such as safety concerns and tariffs, could also weigh on Tesla’s growth prospects. Nonetheless, for investors who are willing to take a long-term perspective and diversify their portfolio, Tesla represents an exciting opportunity to invest in a company that is at the forefront of a major societal shift.
Apple is undoubtedly one of the most iconic and valuable companies in the world, known for its innovation, design, and customer loyalty. Founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne, Apple has gone on to become a household name, synonymous with cutting-edge technology and premium consumer products. From the Macintosh computer in the 1980s to the iPhone and iPad in the 2000s, Apple has consistently pushed the boundaries of what is possible in consumer electronics.
From a financial perspective, Apple has been a standout performer in recent years, with a market capitalization of over $2 trillion as of early 2023. Its revenue has consistently grown over the past decade, reaching $365 billion in 2021, and its net income has increased as well. Apple’s balance sheet is strong, with over $200 billion in cash and equivalents on hand, which gives the company a significant amount of flexibility to pursue new opportunities.
One of the reasons why Apple is a good long-term investment is its ability to generate recurring revenue through its ecosystem of products and services. By designing its hardware and software to work seamlessly together, Apple has created a loyal customer base that is willing to pay a premium for its products. In addition, the company’s services segment, which includes the App Store, Apple Music, and iCloud, has been growing at a rapid pace, providing a new source of revenue and diversification.
While there are risks associated with investing in Apple, such as the company’s reliance on a few key products and the potential for increased competition from other tech giants, many analysts believe that the company’s strong brand, financial position, and ability to innovate make it a solid long-term investment. Overall, Apple’s track record of success and its continued focus on delivering high-quality products and services make it a stock worth considering for long-term investors.
MicroStrategy is a software company that has become well-known in recent years for its significant investment in Bitcoin. The company was founded in 1989 and initially focused on providing business intelligence software solutions. However, in 2020, MicroStrategy announced that it had purchased $425 million worth of Bitcoin as a treasury reserve asset. Since then, the company has continued to add to its Bitcoin holdings, with CEO Michael Saylor citing the cryptocurrency as a hedge against inflation and a store of value.
As of early 2023, MicroStrategy holds over 100,000 Bitcoin, making it one of the largest institutional holders of the cryptocurrency. The company’s Bitcoin holdings have also been a significant driver of its stock price in recent years, with the value of its Bitcoin reserves far exceeding its traditional business operations.
While MicroStrategy’s Bitcoin holdings represent a significant risk to investors, they also offer the potential for significant upside if Bitcoin continues to appreciate in value. In addition, the company’s traditional business operations remain stable, with a track record of consistent revenue and earnings growth.
Overall, MicroStrategy is a unique investment opportunity that offers exposure to both traditional software operations and the rapidly-evolving cryptocurrency market. While the company’s Bitcoin holdings may make it a volatile investment, for investors who are bullish on the long-term prospects of Bitcoin, MicroStrategy represents an intriguing option.