- When times get tough, investors should seek 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 all-time best startup story.
- Campbell Soup (CPB) is a tank, even on most bad days.
- Intel (INTC) is a king among semiconductor companies.
- Microsoft (MSFT) is still dominant in PCs, cloud and gaming after decades of innovation.
- Alphabet (GOOGL) continues to play a huge role in our hyperconnected world.
- JPMorgan Chase (JPM) has proven resilience and it should continue to hold strong in the long run.
If you follow the stock market, then you know the kind of volatility Wall Street is currently showing. Even the experts are finding it hard to make too many valid predictions. During such unstable times, investors should stick to 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 to try and tame it.
The pandemic perhaps changed the short-term mindset of all traders. They have come to expect instant gratification. This is why we now have terms like a “V”-shaped recovery. The idea of buy-and-hold faded into the background — at least for now. I don’t think that we are ready to bury it, especially if we just modify it a bit.
Today’s list of stocks to buy includes nothing but “sure things.” The point is to eliminate all internal sources of variable of hiccups, leaving only extrinsic risks. This would make it nearly impossible to have a company flub cause pain to investors. I even omitted great stocks like Tesla (NASDAQ:TSLA) because of potential personality drama.
I am usually very hesitant to use the word “safe” when presenting investment ideas. If there were stocks that are completely safe, they would not pay a reward. So, let this be a disclosure that we are merely discussing relative safety, which isn’t foolproof.
We cannot have a safe stocks to buy list and not include the king of stocks Apple (NASDAQ:AAPL). Arguably it is the best company on the planet, with special brand powers. Its clientele is amazingly loyal and price is almost never a problem. I am not a die hard fan, but I too agree it is a gem of an equity to own. Therefore, it must be part of this list of sure things.
However, I hesitate to own my entire position right away. This is only because of AAPL stock’s relative altitude to the summer 2020 levels. That’s when the markets really broke out with the tailwind from the stimulus. I expect that the bears will try to deflate more of it before it finds a true floor. I realize that it has already corrected 25% from its highs. But it is still 40% above the breakout neckline.
While this is not a reason to short it, it’s worth waiting it out a bit. Besides, there are other members of this list that have already shed this 2020 rally froth. Meanwhile, its financial metrics are beyond reproach. There isn’t a blemish on them, so don’t waste your time looking.
The growth that Amazon (NASDAQ:AMZN) accomplished in the last five years is astonishing. This is a one of a kind story that will likely never happen again. If there is one doubt about it being on the list of stocks to buy and hold is its new leader. Founder Jeff Bezos handed the reins over to a new team.
I am being paranoid, because it is 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 caused a human tragedy, but the policies that came out of it brought complete chaos.
Central banks are trying to slow this pendulum down, but my bet is that they will mess it up. They will overshoot and perhaps inflict near-term pain. If so, then AMZN stock nears $1,800 would be a bargain stock to buy for a long term.
Campbell Soup (CPB)
When people are sick, the old adage suggests eating soup. When the indices are on the fritz, often Campbell Soup (NYSE:CPB) stock offers a safe haven. Meanwhile, when the bulls are in charge it too participates with the upside to a degree. Therefore, this makes it the perfect stock to own through the proverbial thick and thin.
In addition to the relative overall calmness, CPB stock also rewards its owners with some extra cash. The 3% dividend payout is a nice source for fixed income in this low rate environment. The company’s fundamentals are as boring as they get. Perhaps this is what makes it perfect for a list of safe stocks to buy and hold forever.
For the last seven years, the profit and loss statement barely budged. Despite that, according to Yahoo Finance, its value grew. CPB still maintains a current 15x price-to-earnings ratio, which is its lowest since 2015.
The digital revolution has never been stronger, partly because the pandemic put it in high gear. So the world will need chips to power the tech that is taking over the world. The leader in that is currently Intel (NASDAQ:INTC), even though Advanced Micro Devices (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA) are hogging the headlines. Eventually, investors will know a good thing even if it’s too late.
So far, INTC managed to stay on top for decades, and it should continue to do so for a long while. As for timing, INTC stock is at the low end of the range since 2014. I bet that there are buyers lurking from these levels and into $40 per share. Even though it could go lower, it would then become a slam dunk BUY.
Intel’s top line metrics don’t stack up to AMD or NVDA, but they have impressive bottom line upside. 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 then.
Microsoft (NASDAQ:MSFT) stock is a staple on Wall Street. It rose to fame during the breakout of the digital revolution decades ago. If we include Apple in a list of stocks to buy, then we must also include MSFT. They were bitter rivals, even “frenemies” one could say.
Under the leadership of ex-CEO Steve Ballmer, the outlook was a bit murky. Satya Nadella steered that ship straight into the proper favorable tech currents. The company not only switched to a subscription service for the office suites, but it is also aiming to take a huge chunk of the cloud. Furthermore, with its recent acquisition of Activision (NASDAQ:ATVI), it can also become a gaming powerhouse.
Perhaps this would also be a gateway to the metaverse. Clearly, MSFT is doing its best to keep up with the times and stay relevant. There is no reason to doubt it now. I do caution a bit about its distance to the June 2020 breakout. At this altitude, it can easily lose another 15% before finding real support. But this is a good place to start a multiple entry point position for the long term.
Safety often comes from size, and not many are larger than Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). It is also operationally in control of so many lives, including mine. The android operating system is the most ubiquitous smart phone globally, so it has more users than anyone else.
Social media changed the world, and I bet it is here to stay. For this I struggled with picking between GOOGL and Meta Platforms (NASDAQ:FB). I chose Alphabet because of its command of android and YouTube. Also, more recently, it announced the resurgence of wearable products. The idea of augmented reality sounds lucrative in the mid term. The company has all the tools it needs to dominate it.
Alphabet already made this transition from desktop search monster to mobile. I bet it can make another leap to whatever comes next. The proof of Alphabet’s success is obvious in its financial reports. Alphabet grew sales 2.5 times in just five years. Meanwhile, its net income grew twice as fast in the same time. These impressive accomplishments should give investors confidence that GOOGL belongs on the list of stocks to buy and hold forever.
JPMorgan’s (NYSE:JPM) management has navigated the toughest of tests since the 2008 debacle. It has emerged stronger than ever and now has a fortress balance sheet. JPM stock has strong financial reports backing up its position on this list of stocks to buy. While revenue growth isn’t great, it has grown its net income significantly. JPMorgan has earned the trust of investors, so I have no reason to doubt that it can maintain its strength.
The caveat here is that now the Federal Reserve’s actions are likely to put a serious hurt on its metrics. The tightening measures the central bank strike at the heart of JPM’s business. Therefore, I expect potential calamities during their next few quarter reports. So investors would be wise to temper the enthusiasm short term and try to get in at a lower price.
JPM stock has already lost 23% of its value this year, but it could fall half as much more from here. Buying all in now would defeat the purpose of this list. Being part of a list of stocks to buy and hold doesn’t mean we do it blindly. There are levels that are easy marks for the bears to hit.
On the date of publication, Nicolas Chahine did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.