Almost a year ago to the day, InvestorPlace’s Dan Burrows highlighted the 10 best-performing S&P 500 stocks of the past decade. The most important lesson one finds studying these highflying stocks is that patience wins out over all other attributes of a successful investor.
A classic example of how true this is involves the Fidelity Magellan Fund (MUTF:FMAGX), the large mutual fund made famous by portfolio manager Peter Lynch. Lynch ran the fund for 13 years from 1977 until 1990, growing it from $20 million to $14 billion before stepping aside.
Fidelity studied the returns of Fidelity Magellan unitholders over those 13 years to see how they did compared to the legendary portfolio manager. While Lynch managed to achieve a 29% annual return over this period, the average investor lost money.
Patience would have served those investors well, as the ups and downs of the stock market shook them out of their positions — and in doing so, depriving them of millions of dollars in profits. A $10,000 investment in 1977 held until 1990 was worth $273,947 by the end of that 13-year period.
I’m not Peter Lynch, but I can say with some confidence that the examples to follow are the 10 best stocks to buy for the next decade.
Let’s take a look.
Stocks to Buy for the Next Decade: Amazon (AMZN)
Not only is Amazon.com, Inc. (NASDAQ:AMZN) CEO and founder Jeff Bezos a great chief executive, but Amazon has its hands in so many pies — including a very profitable cloud business that generates almost $1 billion in annual operating income — that it’s hard to fathom just how big Amazon could be a decade from now.
While Amazon’s AWS cloud business is a big deal, Amazon Prime is the service that delivers the goods when it comes to building the foundation for AMZN stock. More than 100 million people subscribe to Amazon Prime at $99 per year.
It’s not the $9.9 billion in annual subscription revenue that matters, but the amount each of those subscribers spends on other Amazon products. Statistics show that 76% of Amazon Prime members spend more than they did before paying the annual $99 fee.
That’s what you call “pulling power,” and it’s a big reason why AMZN stock will be a winner for the long haul.