- When times get tough, investors should look for opportunities in safe stocks to buy and hold through thick and thin.
- Apple (AAPL) remains the king of stocks.
- Amazon (AMZN) is backed by the best startup story ever.
- Campbell’s Soup (pcb) is a tank, even on most bad days.
- Intel (INTC) is a king among semiconductor companies.
- Microsoft (MSFT) is still dominant in PC, cloud and gaming after decades of innovation.
- Alphabet (GOOGL) continues to play a huge role in our hyper-connected world.
- JPMorgan Chase (JPM) has proven itself and should remain solid in the long term.
If you follow the stock market, you know the type of volatility Wall Street is currently exhibiting. Even experts have a hard time making too many valid predictions. In these turbulent times, investors should stick with what has worked for decades. This brings us to the idea of finding stocks to buy and hold forever. If the markets are wild, then we should try to tame it.
The pandemic may have changed the short-term mindset of all traders. They have come to expect instant gratification. That’s why we now have terms like a “V” shaped recovery. The buy-and-hold idea has faded, at least for now. I don’t think we’re ready to bury it, especially if we change it a bit.
Today’s list of stocks to buy includes nothing but “sure things.” The goal is to eliminate all internal sources of the hiccup variable, leaving only the extrinsic risks. This would make it almost impossible for a corporate error to cause investors pain. I even omitted large stocks like You’re here (NASDAQ:TSLA) due to potential personality drama.
I’m usually very hesitant to use the word “safe” when pitching investment ideas. If there were completely safe actions, they would not pay a reward. So whether it’s a disclosure that we’re just discussing relative security, which is not infallible.
We can’t have a list of safe stocks to buy and not include the king of stocks Apple (NASDAQ:AAPL). It’s arguably the best company on the planet, with special brand powers. Its clientele is incredibly loyal and price is almost never an issue. I’m not a die-hard fan, but I also agree that it’s a gem to own. Therefore, it must be part of this list of sure things.
However, I’m hesitant to own my entire position right away. This is solely due to the relative altitude of AAPL stock from summer 2020 levels. This is when markets really erupted with the tailwind of the stimulus. I expect the bears to try to deflate more of it before it finds a real bottom. I realize that he has already corrected 25% of his highs. But it’s still 40% above the breakout neckline.
While that’s no reason to shorten it, it’s worth the wait a bit. Plus, there are other members of this list who have already poured that 2020 rally foam. Meanwhile, his financial metrics are beyond reproach. There is no blemish on them, so don’t waste your time looking.
The growth that Amazon (NASDAQ:AMZN) accomplished over the past five years is astounding. It’s a one-of-a-kind story that will probably never happen again. If there’s any doubt about its presence on the buy-and-hold list, it’s its new leader. Founder Jeff Bezos handed the reins to a new team.
I’m paranoid because it’s likely that the Amazon machine will continue to excel regardless. The momentum it has is substantial, so it will take a lot of trepidation to die. The world is going through a rough patch coming out of the pandemic. The virus has caused human tragedy, but the resulting policies have caused utter chaos.
Central banks are trying to slow this pendulum, but I bet they’ll ruin it. They will protrude and possibly inflict short-term pain. If so, then AMZN stock nearing $1,800 would be a cheap stock to buy long term.
Campbell’s Soup (CPB)
When people are sick, the old adage suggests eating soup. When clues are on the alert, often Campbell’s Soup (NYSE:pcb) stock offers a safe haven. Meanwhile, when the bulls are in charge, they also participate in the upside to some degree. Hence, this makes it the perfect stock to own through the proverbial thick and thin.
In addition to the general relative calm, CPB stock is also rewarding its owners with extra cash. The 3% dividend payout is a nice source of fixed income in this low rate environment. Business fundamentals are as boring as they come. Perhaps that’s what makes it perfect for a list of safe stocks to buy and hold forever.
Over the past seven years, the income statement has hardly changed. Despite this, according to Yahoo finance, its value has increased. CPB still maintains a current price-to-earnings ratio of 15x, which is its lowest since 2015.
The digital revolution has never been stronger, in part because the pandemic has kicked it into high gear. So the world will need chips to power the technology that is taking over the world. The leader is currently Intel (NASDAQ:INTC), although Advanced micro-systems (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA) are making headlines. Eventually investors will know a good thing even if it is too late.
So far, INTC has managed to stay on top for decades, and it should continue to do so for a long time. As for timing, INTC stock has been at the low end of the range since 2014. I bet there are buyers lurking from these levels and into $40 per share. Even if it could drop, it would then become a BUY slam dunk.
Intel’s leading metrics don’t match AMD or NVDA’s, but they have an impressive net benefit. Net income has now more than doubled since 2015, without inflating the valuation proposition. The current 12-month P/E ratio is about half of that.
Microsoft (NASDAQ:MSFT) is a staple on Wall Street. He rose to fame when the digital revolution broke out decades ago. If we include Apple in a list of stocks to buy, we must also include MSFT. They were fierce rivals, even “enemies” one might say.
Under former CEO Steve Ballmer, the outlook was a bit murky. Satya Nadella steered this ship straight into the appropriate favorable technology streams. The company has not only moved to a subscription service for office suites, but it also aims to take a large chunk of the cloud. Moreover, with its recent acquisition of Activision (NASDAQ:ATVI), it can also become a gaming powerhouse.
It might also be a gateway to the metaverse. Clearly, MSFT is doing its best to keep up and stay relevant. There is no reason to doubt it now. I caution a little about its distance from the June 2020 breakout. At this altitude, it can easily lose another 15% before finding real support. But it’s a good starting point for a long-term multiple entry point position.
Safety often comes from size, and few are bigger than Alphabet (NASDAQ:GOOGNASDAQ:GOOGL). It also operationally controls so many lives, including mine. The Android operating system is the most popular smart phone in the world, so it has more users than anyone else.
Social media has changed the world, and I bet it’s here to stay. For this, I had a hard time choosing between GOOGL and Metaplatforms (NASDAQ:Facebook). I chose Alphabet because of its control of Android and Youtube. Also, more recently, it heralded the resurgence of wearable products. The idea of augmented reality seems lucrative in the medium term. The company has all the tools to dominate it.
Alphabet has already made that transition from desktop to mobile search monster. I bet it can make another jump to whatever comes next. Evidence of Alphabet’s success is evident in its financial reports. Alphabet has multiplied its sales by 2.5 in just five years. Meanwhile, his net income grew twice as fast at the same time. These impressive achievements should give investors confidence that GOOGL belongs on the list of stocks to buy and hold forever.
JPMorgan’s (NYSE:JPM) the management has gone through the most difficult trials since the 2008 debacle. It emerges stronger than ever and now has a fortress record. JPM stock has strong financial reports that support its position on this list of stocks to buy. Although the revenue growth is not significant, she has significantly increased her net income. JPMorgan has earned investor confidence, so I have no reason to doubt that it can maintain its strength.
The caveat here is that the actions of the Federal Reserve are likely to seriously damage its metrics. The tightening measures the central bank strike at the core of JPM’s business. Therefore, I expect potential calamities during their upcoming quarterly reports. Investors would therefore be wise to temper short-term enthusiasm and try to enter at a lower price.
JPM stock has already lost 23% of its value this year, but it could drop half as much from here. Buying everything now would defeat the purpose of this list. Being on a buy-and-hold list doesn’t mean we do it blindly. There are levels which are easy for the bears to reach.
At the date of publication, Nicolas Chahine had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.