9 Examples of Long-Term Stocks for a Buy-and-Hold Strategy
These long-term stocks may provide stability and a good rate of return over time.
December 16, 2022
This article is provided for informational purposes only and should not be construed as legal or investment advice. Always consult with a professional financial or investment advisor before making investment decisions.
When it comes to the stock market, people sometimes focus on short-term investments. They want to buy low and sell high. And more often than not, they want to do this with growth stocks that can see significant increases in their stock price in a short period of time.
However, this can be risky due to volatility in the market. For example, in 2022, the S&P 500 Index entered its second bear market since the start of the COVID-19 pandemic. Market volatility is a very real thing that has seen many investors lose the short-term valuation of their investments.
Alternatively, other people take a long-term investment approach. With this mindset, you buy now and hold on to your stocks for many years. With long-term stocks, temporary downturns don’t need to disrupt your investment strategy. Instead, you could have peace of mind for the future by focusing on investing fundamentals and your long-term returns.
In this article, we’ll take a look at some long-term stocks that may deliver great dividends while reducing the potential risks associated with short-term investment strategies.
9 of the best historically performing long-term stocks
Long-term investors use a buy-and-hold strategy. They tend to focus on stocks that have seen consistent, reliable growth over several years — and possibly even decades. These stock investments could be more comfortable for investors with a low-risk tolerance, unlike investments in new or trendy assets like crypto.
While the share prices of these stocks may not always see dramatic growth in the short term, they often outperform the market as a whole in the long run. A strong track record could be key to surviving the volatility that can overwhelm Wall Street.
A diversified portfolio with several strong long-term stocks may reduce risk and increase your chances for long-term gains. If you don’t want to buy individual stocks, you can also consider mutual funds or exchange-traded funds (ETFs) for a mix of different investments.
Keep in mind this list is for informational purposes only. It’s not recommended to buy stocks or make investment decisions without the help of a financial advisor or investment professional.
UnitedHealth Group is the largest private health insurer in the United States, controlling 12% of the health insurance market. Its large, diversified healthcare offerings have lent it much-needed stability over the years.
In June 2022, the company reported that its earnings had increased 18.5% over last year, thanks to falling medical costs and the success of its Optum Health Services offering.
As of November 2022, this stock had experienced five-year growth of over 140%.
Costco’s membership-based shopping has proven quite popular over the years, with nearly 119 million cardholders as of August 2022. The company reported annual revenue of $222.7 billion in that same report.
While supply chain issues have caused the stock to recently fall from its all-time high value in April 2022, it is currently hovering around 200% growth from November 2017 to November 2022. The company is expected to continue to post strong revenue growth in the current and coming years, which bodes well for its continued value.
Mastercard (as well as competitors like Visa) is generally considered to be among the best investments for keeping up with inflation. This is because with higher transaction prices, Mastercard earns more fees — driving up its revenue.
Long term, as the world continues to move away from cash and transition to mobile and digital payments, this will only create additional opportunities for growth.
From November 2017 to November 2022, Mastercard had achieved over 125% stock value growth.
The world’s largest e-commerce company may have declined in value since its shares soared during the COVID-19 pandemic, but the fact remains that e-commerce is here to stay. Globally, e-commerce is expected to grow another 9.7% in 2022 after experiencing record-breaking growth in 2020 and 2021. Amazon has a 37.8% market share of retail e-commerce in the United States, far outpacing its competitors.
As of November 2022, Amazon’s five-year stock growth stood at over 70%.
Founded in 1994, Northrop Grumman has become one of the largest defense contractors for the U.S. government. Ranked number 101 on the Fortune 500, its aerospace and defense systems have won many industry awards.
The fact that the company can achieve long-term government contracts gives it stability as a long-term investment.
While Amazon may be the e-commerce leader, the growth of this sector means that countless other retailers are also entering the space. Shopify is an e-commerce platform that helps brands run their online storefronts. Shopify saw its store numbers grow by over 201% from March 2020 to January 2022.
Like Amazon, increasing demand for e-commerce bodes well for this stock’s long-term prospects and stability. The stock has experienced growth of over 270% from November 2017 to November 2022.
Alphabet is the parent company of Google, the largest search engine in the world, and the company’s diversified technology ventures have the potential to open up new sources of revenue in the future.
From November 2017-November 2022, Alphabet Class A stocks grew over 86%.
Taiwan Semiconductor Manufacturing Company
You may not have heard of the Taiwan Semiconductor Manufacturing Company (TSMC), but few companies are having a bigger impact on today’s global economy. TSMC is the world’s largest manufacturer of semiconductors, which are used in a wide range of modern devices, such as smartphones, medical equipment, computers and even cars.
The company is currently planning a multibillion-dollar factory expansion in Arizona, further adding to its position and stability in the market.
On the New York Stock Exchange, TSMC’s stock has grown roughly 90% from November 2017 to November 2022.
Past performance is often used to gauge the long-term potential for a stock. Home Depot and other home improvement stores enjoyed record-breaking sales during the COVID-19 pandemic, and their stock prices increased accordingly.
While the current value of Home Depot stock is down from its pandemic peak, the fact remains that as long as there are homeowners, there will be people wanting to improve their property. Home Depot has had over 85% stock value growth from November 2017 to November 2022.
Consider long-term stocks for your portfolio
As a reminder, before making major investment decisions; it is always recommended that you consult with a qualified financial advisor. They can help you identify quality long-term stocks for your investment portfolio that align with your financial planning goals.
By taking a long-term approach that prioritizes diversification of your investments, you may be able to achieve steady growth at a higher rate of return than you’d get from a savings account.
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