Lets assume that you had to choose stocks to buy in the next two years. Once you purchase the stocks, then the stock certificates would be put in a safe deposit box. The safe deposit box would then be opened in 30 years and the securities sold. You will have up to two years from today to buy the stocks. The reason why you have two years is so you can pick a suitable entry point. For example, P&G seems a little bit overbought at the current time. So you will be able to wait a few months to buy it. Which 5 stocks would you pick based upon the above scenario?
Interesting post Eagle. I don't trade stocks and this would be considered a 'long-term investment' - but with that being said my 5 would be (in no particular order): Best Buy Electronic Arts Google CME Bank of America That was actually kind of fun. I was a financial advisor years ago and that question took me back to that time - what stocks would you plan to own for years. Now, daytrading futures I think - will this trade last 45 seconds or 5 minutes?
There is a reasoning behind my post. I have a 401k and a Roth IRA. However, even maxing these instruments out, I dont believe that it will be enough. So I am figuring to buy shares of different companies at the rate of $1000 per month from computershares.com as a supplement. Take physical delivery of the shares and put them away in a safe deposit box. When they are finally sold, I will pay 15% on the capital gains IF there is a still a capital gains at that time. The reason why I would take physical delivery is so that it wont be easy to cash the shares out. Let them sit and act as either a method for retirement or an emergency cash fund should something go wrong with my other exploits. I have the Mergent's Dividend Achievers list that I am working off of. I figure that large companies that pay a dividend will perform the best in the long run. My picks so far are the following: Briggs & Stratton Becton Dickinson Automatic Data Processing Anheuser-Busch American International Group All-State AFLAC 3M Abbott Laboratories Chubb Caterpillar Clorox AT&T HP Bank of America Citigroup ConEd Washington Mutual Fidelity Colgate-Palmolive Exxon GE GD Exxon Home Depot IBM Johnson and Johnson Legg Mason Lilly & Company Lowes M&T Bank McDonalds McCormick T Rowe TD Bank P&G Sherwin Williams Walmart Wrigley State Street Ok, I know thats more then five. My strategy would be to buy $1000 in shares from each of the companies on the above list each month for the next 5-10 years. The purpose of buying from a huge list is that one of the above companies will probably through some pains in a 30 year time frame. I look at big companies like Ford and Delta as shining examples. I dont plan on repeat buying with any of the companies until I have run through the entire list.
This might give you some idea if you ever decide to do it. Personally, I will not hold anything for 30 years, but you never know http://moneycentral.msn.com/articles/invest/jubak/fifty.asp
As funny as this sounds, Im not sure if Microsoft will be around in 30 years. Apple seems to be gaining more market share each year. Windows is becoming an aging platform. Bill Gates wont always be the Captain. I will give you an example. Ever hear of Wang Labs, how about the quotetron? I believe most or all of the companies I listed have a product that will either be desired or needed no matter what the time frame. Insurance and banking services will always be needed no matter what the time period. Paint is something that will always be needed. Toothpaste will still be needed 100 years from now etc. Most of the companies on my list have existed for long periods of time. You could recognize their names 30 years ago. There were a few on my list that I had second thoughts like McDonalds. Its a big company now, but the trend is for health going into the future.
I agree with Goldman. They have been around since 1869 and we will always need their services. Disagree with Google. Im wary about including tech stocks into the index. Technology changes very quickly. While Google is a hit today, I dont know where its going tommorrow. I like HP and IBM because they have been around a long time. HP=1939 and IBM=1888 I feel comfortable with both those tech companies because they have demonstrated that they can stand the test of time. IBM made it through the Great Depression. Its not going anywhere.