Have you ever looked for a good movie to watch on a weekend night? Then you know how easy it can be to find good stocks for long-term investment success. These are the investments that will build wealth for you over time. These are the high-quality investments you can count on to rise in value over the years. Kind of like the movies that start out good and get better over time.
And just like there are good movies in multiple genres, you can find good stocks for long-term investment success in a variety of place besides the stock market, as well as within the stock market itself. For example, other investments such as certificates of deposit (CD) can be practical in your investment strategy.
The current stock market is creating huge opportunities to invest - even during a pandemic. And unless you majored in finance or are a stock broker yourself, you may not feel confident enough to start investing on your own.
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Good stocks for long-term investment growth
Before we get to the investments outside of individual stocks, it’s important to look at good stocks for long-term investment success involving an array of stock types.
Value stocks: These investments trade at a lower rate than their fundamentals suggest. Most value investors look for long-term opportunities to build wealth with these undervalued stars. Famous investors like Warren Buffett have used value investing strategies to build their fortunes.
Blue chip stocks: Blue chip stocks do not necessarily come at a discounted rate like value stocks, but they are some of the market’s most well-known stocks. These stocks are reliable and have a history of growth and profits. Many pay dividends, too. Blue chips are often large-cap stocks with a market valuation in the tens of billions.
Dividend stocks: Dividends are a sign of investment quality. There is no way to fake dividends, so only profitable companies are genuinely able to pay a dividend to its shareholders. Although a past dividend payment is not a guarantee of future dividend payments, it is a sign of a company that is well run and has a higher possibility of paying a dividend than unproven investments.
All three of these can offer you good stocks for long-term investment stability and growth.
Going beyond stocks and towards other types of investments for success
Here is a look at three popular ways to invest money for long-term wealth building.
Fixed CDs: These investments are like savings accounts with a fixed maturity date. CDs can carry various periods of length, commonly for six to twelve months. However, some can be for even more extended periods, like five or more years. In addition to a fixed period, the account holds a fixed amount of money and has a fixed amount of interest associated with it. CDs are thought to be safer than many other forms of investments or savings accounts.
Government bonds: A government bond is another form of a fixed-income asset. Someone who buys a bond is loaning the federal government a specific amount of money for a set period. In return, the bond buyer will receive interest and will receive the original investment back on the bond’s maturity date. Government bonds in the U.S. are referred to as treasuries, and there are three main categories based on their maturity lengths. Treasury bills (T-bills) are the shortest and expire in less than one year. Treasury notes (T-notes) expire between one and ten years. Treasury bonds expire in a period that is more than ten years.
Roth IRA: These investments are for building retirement savings. After-tax money is used for contributing to a Roth IRA account, meaning that taxes have already been paid on the money being contributed to the account. Once you begin to withdraw money from the Roth IRA in retirement, the withdrawals are conducted tax-free.
What are some good stocks for long-term investment success that fit your diversified portfolio well?
Nancy Zambell has spent 30 years educating and helping individual investors navigate the minefields of the financial industry. As a lecturer and educator, Nancy has led seminars for individual investors at the National Association of Investors, Investment Expo and the Money Show. She has also taught finance, economics and banking at the college level, and has been quoted extensively in The Wall Street Journal, Investor’s Business Daily, USA Today, and BusinessWeek. Now let her give you the tools and resources, including a monthly magazine, for gaining the peace-of-mind to live comfortably now and in retirement in her Cabot Money Club.Learn More >>