Best Stocks for Long-Term Growth to Watch
Finding the best stocks for long-term growth can be difficult. What is long-term investing, and what advantages and disadvantages does it bring? This article answers these questions and provides a list of some potential stocks for long-term growth.
Table of Contents
Long Term vs Short Term Investing
Long-term investing refers to investing with a time horizon of 10 years or more. This is different from short-term or intermediate-term investing, where the time horizon is around 2-4 years or 5-7 years, respectively. Most of the well-known investors and hedge funds focus on long-term investing to navigate the shorter-term volatility that develops in the financial markets.
While any form of investing is difficult, shorter-term investments are the most difficult. This is because short-term goals can be affected by shorter-term market events. A long-term goal can navigate the shorter-term volatility in a more balanced way. Identifying the best type of investing style for an investor requires some trial and error, time and proper risk management.
How to Pick Stocks for Long-Term Growth
Picking the best stocks for long-term growth is not easy. There are many factors to consider. First of all, there’s hard financial data such as sales and growth numbers, and financial ratios like earnings per share, book value per share, or cash ratio.
Secondly, how the best stocks for long-term growth develop their products and services suite is paramount. A computing giant like Microsoft started cornering the operating system market in the 1980s, and over decades branched out into productivity software, gaming, cloud services, and most recently AI. A company must innovate to continue growing and remain relevant.
Thirdly, market and technological developments are relevant to the best stocks for long-term growth. In the past two or three years, we have seen an AI boom. To achieve long-term growth, a company needs to be able to adapt and leverage these developments.
Advantages vs Disadvantages of Long-Term Investing
| Advantages | Disadvantages |
| Compound returns | Long time horizon required (10+ years) |
| Reduce the impact of market fluctuations and financial crashes | Inflation can rise over time, reducing profits |
| Lesser need for monitoring and tracking | Uncertainty about long term developments in markets |
| Requires significant capital outlay |
Best Stocks for Long-Term Growth to Watch
It should be noted that the following best long-term growth shares are subjective. Therefore, these stocks are strong starting points for investors who are performing the necessary research to construct a robust portfolio.
- Microsoft (MSFT)– Worldwide Software and Computer Giant of founder Bill Gates
- Berkshire Hathaway (BRKB) – Warren Buffett’s Conglomerate and Investment Company
- LVMH (MC) – Fashion, Liquor and Luxury Goods Producer, and Retail Heavyweight
- Walmart (WMT)– Supermarket Chain Operator, Largest Company by Revenue Worldwide
Microsoft
One of the biggest developers and producers of software and computers in the world, Microsoft, hardly needs an introduction. The company was founded in Washington in 1975 by Bill Gates and Paul Allen. In the 1980s Microsoft captured a significant portion of the market share with the release of MS-DOS, an operating system for personal computers. In the 1990s Microsoft expanded its operations by targeting businesses with productivity software like Word and Excel.
Microsoft is still the market leader in operating systems for personal computers. In recent years, the company has also begun offering cloud services, developing and selling Windows phones and tablets, and acquiring several game development studios (the company entered the gaming space with the launch of the original Xbox in 2001). Most recently, Microsoft launched Bing AI, its proprietary AI chatbot. Microsoft is currently pouring a lot of resources into AI.
Microsoft has a current market capitalisation of just over $3 trillion. It is the second company ever to pass the 3 trillion dollar mark, Apple being the first. The company surpassed the $1 trillion mark in 2019.
Berkshire Hathaway
Berkshire Hathaway is a well-known American conglomerate and the 8th largest company in the world. The company began as a textile producer in 1839. Almost a century later, it merged with the Berkshire Cotton Manufacturing Company. In 1955, it acquired Hathaway Manufacturing, thereby completing the current name. In 1962, Warren Buffett became involved with the company, later acquiring a majority stake.
Warren Buffett wound down Berkshire Hathaway’s operations and divested funds into other companies, mainly insurance providers. Currently, the company has nearly 400,000 employees, who mainly work in the insurance branch. The company has a broad range of operations, also being involved in railway transport, energy production, the production of chemicals and building materials, and retail stores.
Berkshire Hathaway has significant stakes in Wells Fargo, Apple Inc., Bank of America, The Coca-Cola Company, and American Express, among others. Berkshire Hathaway's market capitalisation is around $876 billion. The company has posted steady yearly growth for the majority of the past two decades.
LVMH
Louis Vuitton Moët Hennessy (LVMH) is the holding company that owns the fashion label Louis Vuitton and the liquor and champagne producer Moët Hennessy, which fused in 1987. Some brands the company produces include Château d'Yquem, a sweet white wine brand that traces its roots back to 1593. Hennessy, the titular flagship liquor, was first created in 1765.
LVMH has five operating divisions: wine and liquors, fashion and leather goods, perfumes and cosmetics, watches and jewellery, and selective retailing. Some of the brands it owns include Christian Dior, Tiffany & Co, Dom Pérignon, and Chandon. In recent years, the company has also established a media and news branch, acquiring several French newspapers and radio stations. LVMH's market capitalisation is currently roughly 422 billion euros. In April 2023, it became the first European company to reach a valuation of $500 billion.
Walmart
Walmart is one of the most prolific supermarket chains in the United States. It was founded by Sam Walton in 1962, who established the first store in Arkansas. Within the next five years, the company’s operations grew to 24 stores, leading to its first expansion outside the state of Arkansas by opening store number 25 in Missouri. In the following decades, Walmart grew considerably, expanding to the rest of the United States, the United Kingdom, Germany, and India.
Walmart operates large supermarkets, also known as ‘hypermarkets,’ department stores, and grocery stores. The company currently operates more than 10,000 stores in over 24 countries. Its stores sell a wide range of products. Many Walmart stores sell regular supermarket goods like meat, baked goods, frozen foods, dairy products, and seafood.
Additionally, many of its larger stores provide goods and services related to gardening, pet care, pharmaceuticals, consumer opticals, photo processing, portrait photography, phones, hair and nail salons, video rental, and even local banks. Walmart currently has a market capitalisation of around $484 billion. By revenue, it is the largest company in the world, with over $600 billion per year.
How to Invest in Long-Term Stocks
With Admiral Markets, you can trade and invest in over 3,000 stocks and ETFs. You can learn more about trading and investing commissions on the Admiral Markets Contract Specification page. Search for global stocks and ETFs from the MT5 web platform and invest in four steps:
- Open an account with Admiral Markets.
- Click on Trade on one of your live or demo trading accounts to open the web platform.
- Search for your symbol at the top of the search window.
- Click Create New Order in the bottom window to open a trading ticket to input your trade size, stop loss and take profit level.
Conclusion
All in all, investing in the best stocks for long-term growth is not the best option in every situation. Investors should consider whether they can keep the capital at hand in the market for 10 years or longer. By investigating the pros and cons of long-term investing, investors can find a style of investing suited to their individual goals.
Continue Reading:
- Best Shares to Buy
- Best Monthly Dividend Stocks
- Best Stocks for Long-Term Growth
- 6 Short Term Investments
- How to Trade the US Stock Market
- The CFD Trading Guide
FAQs on Best Stocks for Long Term Growth
What is long-term investing?
Long-term investing means committing money to an investment portfolio or asset for 10 years or more.
What are growth stocks?
Growth stocks are companies that have significant room to grow due to innovative strategies or products that will possibly conquer the market in the coming years or decades.
How to invest in long term growth?
Investing in long-term growth is not just a matter of identifying the best stocks for long-term growth, but also having the right mindset for keeping capital in the market for decades. In practice, this might prove difficult for many investors in the case of disappointing returns for some years.
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