Yahoo Finance I’m a Financial Expert: Here Are 3 Stocks I’m Keeping in My Personal Portfolio for the Long Haul
According to Gallup’s annual update, 62% of Americans have money invested in the stock market. This figure includes individual stocks, mutual funds and retirement savings accounts. But not all investments are created equal. To offer you some insights on how to invest in the market, GOBankingRates asked two financial experts about the stocks and securities they hold in their own portfolios for the long term.
A good investment for one person isn’t necessarily the best investment for another, so it’s a good idea to do your own research — but these expert-picked stocks are a good place to start.
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Stock Holdings of Financial Experts
What stocks are financial experts keeping in their portfolios for the long run?
Amazon
“Amazon is in my long-term portfolio due to its great growth and diversity,” said Diego Apaza, CEO of Alpha Stocks Lab. “Amazon is already [at] the $2.08T market cap this year, which is almost double the valuation at the beginning of 2023.”
Apaza noted how the online retail giant’s revenue is expected to grow 11% to $638.7 billion in 2024, which has given long-term investors the indication that growth is strong and exponential.
Many analysts believe the growth of Amazon Web Services (AWS), the largest cloud computing provider, will help increase profitability. AWS’s revenue shot up 17% annually for the first quarter of 2024, providing the company with 62% of its profits.
Learn More: 10 Valuable Stocks That Could Be the Next Apple or Amazon
Nvidia
Apaza said, “Nvidia’s market valuation has been incredibly growing with its AI technology and chips.” He referenced how remarkable it was for a company this size to experience 239% growth in 2023.
“[I am] currently holding a big stake in them, as well, for the next five to ten years,” said Apaza. “I believe the potential of AI is just starting, and we will find out more about it and developments in the future.”
You can’t classify Nvidia’s recent financial results as anything less than remarkable, making this the ideal stock for those who became long-term investors in the company many years ago.
Berkshire Hathaway
“I bought my first shares of Berkshire Hathaway in the early 1980s and continue to add to my position,” said Robert R. Johnson, Ph.D., CFA, CAIA, professor of finance at Heider College of Business, Creighton University. “Berkshire is the perfect stock for someone with a long-term time horizon and is a wonderful core position for any portfolio. It’s a diversified conglomerate of wholly-owned companies and publicly traded securities.”
With a market cap of around $890 billion, some analysts feel this could become a trillion-dollar company by 2030. Buffett has praised Greg Abel, who he believes understands capital allocation as well as he does. Even though there are some concerns about the future when Buffett passes, Johnson isn’t worried.
Johnson concluded, “I believe the culture of the firm will prevail and that the firm’s leaders will continue to be superior capital allocators. Greg Abel, Ajit Jain, Todd Combs and Ted Weschler are a dream team that will continue to operate Berkshire Hathaway as Buffett and Charlie Munger did for many years. It’s truly a set-it-and-forget-it stock.”
Investing In Stocks Like a Financial Expert
It’s worth pointing out that many who specialize in managing investments or work as financial professionals have certain considerations for their long-term investments. Here’s what to think about as you look for stocks to hold on to for the long haul.
The company’s track record: If you’re looking to add a long-term position, you want to invest in companies with a proven track record regarding stock prices and financial results.
Your time horizon: Make sure you consider when you expect to exit your position.
Your risk profile: Your risk tolerance needs to be taken into account when you’re looking for stocks to invest in — some stocks are more sensitive to rate hikes and market conditions than others.
The Case for Choosing Index Funds
If you’re unsure about which stock to invest in, you may want to consider purchasing a pool of stocks through an index fund to mitigate your risk in the market.
“Decades of research, like the principles in Burton Malkiel’s ‘A Random Walk Down Wall Street,’ have consistently shown that most active fund managers fail to outperform their benchmark indexes over the long term,” said Sean Lovison, a CFP, CPA and lead planner at Purpose Built Financial Services, LLC. “It’s a bit like trying to consistently flip a coin and get heads — possible, but highly improbable.”
Investing in an index fund allows you to own a broadly diversified piece of the market with one investment, which allows you to focus on your long-term goals instead of getting caught up in market fluctuations.
“It’s a cost-effective strategy that eliminates the need for constant stock picking and reduces the risk of making a costly mistake on a single company,” Lovison explained.
If choosing individual stocks stresses you out, you don’t have to do so, and you can invest in an entire index that you feel comfortable with.
Lovison concluded, “Proper asset allocation based on your individual risk tolerance and time horizon is still critical. Don’t mistake simplicity for a free pass on prudent investing.”
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This article originally appeared on GOBankingRates.com: I’m a Financial Expert: Here Are 3 Stocks I’m Keeping in My Personal Portfolio for the Long Haul
