I have been writing often about many different strategies investors can take to become successful. Virtually all of those articles are geared for retirement and that was their goal. This article I would like to make as simple as possible for any investor to win more, profit more.
Aside from just following the quarterly financials and reading the news, very little effort should be required to keep you well ahead of the average stock market "picker," and you should be able to sleep at night while having these stocks just about on autopilot.
Four Stocks to Buy Now and Hold Forever
There is no secret to this group of products. They have been around basically forever and have survived in every environment: political, economical, global, war time, peace time, and within our daily lives in virtually all aspects.
Each of these stocks has had its ups and downs, but let's take a look at the 10-year history and see how each has performed.
Johnson & Johnson
Ten years ago, the stock was under $40.00/share and today is close to $70.00/share. It has paid a dividend since May 2002 without missing a payment, and has almost tripled its payout from approximately $0.20/share to $0.57/share, per quarter.
If you had purchased 100 shares at $40.00/share, your cost would have been $4,000. Ten years hence, the value of the shares would be $7,000 and you would have earned another $1,540 in dividends alone, not re-invested, for a total value of $8,540.
Ten years ago the stock was about $25.00/share and is roughly $20.00/share now. It has paid a dividend quarterly without missing a payment of between $0.10/share to $0.31/share, unevenly.
If you had purchased 100 shares at $25.00/share, your cost would have been $2,500. Ten years hence, the value of your shares would be $2,000 and you would have earned another $840 in dividends alone, not re-invested, for a total value of $2,840.
Ten years ago the stock was about $40.00/share and is about $85.00/share today. It has paid a quarterly dividend without missing a payment of between $0.23/share and $0.47/share, more than double from 10 years ago. The company has just announced a significant increase once again.
If you had purchased 100 shares at $40.00/share, your cost would have been $4,000. Ten years hence, the value of the shares would be $8,500 and you would have earned roughly another $1,500 in dividends alone, not re-invested, for a total value of $10,000.
Procter & Gamble
Ten years ago the stock sold for a split-adjusted price of about $43.00/share, and today the price is about $68.00/share. It has paid a quarterly dividend without missing a payment of between $0.19/share and $0.562/share, and with the 2:1 split-adjusted amount that becomes more than a fivefold increase as of now.
If you had purchased 100 shares at $43.00/share, your cost would have been $4,300. Ten years hence, the value of your shares would be $6,800 and you would have earned a split-adjusted amount of roughly $2,200 in dividends alone, not re-invested, for a total value of $9,000.
There is no magic here, just large-cap, blue-chip, mega stocks that give you balance and diversification. They have each had their share of ups and downs. The have been admired and despised. They have been run well, and they have been run terribly.
That being said, the facts speak for themselves. If you had purchased an equal amount of shares in each stock, your total cost would have been $19,800.
By not doing anything at all and just letting the stocks sit, your total portfolio value, with dividends added as cash, would now be $30,340.
An overall increase of nearly 53% without lifting a finger, making a trade, selling a covered call, or adding any more money.
Through the highs and terrible lows of the past 10 years, you would have averaged roughly 5.3% per year on your initial investment. If anyone tells you this cannot be done by anyone, simply refer them directly to this article.
I realize that this is the most simplistic portfolio model one could have. Four stocks, equal number of shares, and just letting them sit there over the last 10 years. No fees, no accounting, no advisors, no annuities, nothing. The point is that anyone can invest without breaking a sweat, feel pretty safe and secure, and still beat most of their neighbors in the world of investing.
Something to think about as we move into the next few quarters of background noise.