In a market environment that overwhelmingly encourages constant activity by investors who seemingly want to double their money every week, a discussion of stocks to buy and hold forever seems comically out of place.
And yet, for better or worse, that’s the mindset all of us should adopt for most of our investing capital. More often than not, the more you trade, the worse you end up doing.
It has been said (and verified) that 95% of true “day traders” — the most aggressive and active of all market participants — end up losing money by being too active for their own good. Conversely, the fact that Warren Buffett’s favorite holding period is “forever” and how he’s got a track record most investors would envy is just as telling.
Dividend Yield: 6.6% Year-to-date gain: 7.5%
Calling a spade a spade, shares of telecom giant AT&T Inc. (NYSE:T) haven’t been easy to own in a while. The stock is down 14% from its mid-2016 peak, while most other stocks are well up for the timeframe. The impasse has been an increasingly tougher wireless and broadband market. But now that plans to acquire media outfit Time Warner Inc (NYSE:TWX) look good a turnaround might have begun.
If your intended timeframe really is “forever” though, a tough couple of years is nothing … particularly considering you’re collecting a healthy dividend yield on your position’s current value.
More than that though, this is a telco name with a lot of clout, and a little more than $50 billion in the bank. And, if/when the Time Warner deal goes through, it will have yet another revenue-bearing weapon in its arsenal.
Alphabet (GOOGL, GOOG)
Dividend Yield: N/A Year-to-date gain: 6.8%
Fans and followers of the company will likely know that Google parent company Alphabet Inc (NASDAQ:GOOGL, NASDAQ:GOOG) beat last quarter’s earnings estimate, posting $12.77 per share. What got lost in the shuffle is how operating margains fell to 21 % from last quarter’s 24%.
Appreciated or not, Alphabet is a profit and revenue growth machine that has earned its spot on a list of “forever” stocks to buy. It may not always beat estimates, but it does always increase its numbers. That’s because it keeps finding a way to serve as the middleman for about 70% of web searches done on desktops, and boasts being the preferred search engine for about 90% of the queries made via a mobile device.
Dividend Yield: 2.78% Year-to-date gain: 8.94%
In an era where complicated companies are shedding disparate parts of themselves so each arm can be hyper-focused on doing one thing exceedingly well, 3M Co (NYSE:MMM) is something of an outlier. It offers everything from office supplies to healthcare products to the power transformers you see perched on top of power-line poles.