4 long-term investments you will thank yourself for later
Are you actually a buy and hold (and other) type of investor? Or are you tempted to lock in profits after a market rally or wait for big pullbacks to get into the names of your watchlist? Many of us often slip into the latter frame of mind, even though we know that the first approach ultimately bears more fruit.
If you want to try the first one, here’s a look at four great stocks that would suit almost any wallet. The trap ? Each of them really needs a multi-year holding period to get over their current relatively wealthy valuations and get the most out of them.
You may not have heard the name Black rock (NYSE: BLK), but you’re probably familiar with at least one of its biggest companies. BlackRock is the company behind the iShares family of exchange-traded funds (ETFs); it also manages traditional mutual funds and serves as the backbone of many institutional pension plans.
It’s an incredibly competitive arena. Data from New York Stock Exchange suggests that there are around 2,700 ETFs listed in the US alone, while there are around 8,000 mutual funds. BlackRock is a leader rather than a follower in this area, however, growing its asset base from less than $ 4 trillion in 2012 to $ 9 trillion now.
And yet this growth is still only scratching the surface of the company’s opportunity. BlackRock says exchange-traded funds only make up about 3% of total invested assets globally, and the five largest asset management (fund management) firms collectively control only about 11% of the market. . BlackRock is the largest of these five, earning around 3% of the industry’s annual revenue. She just needs time to continue to develop her business.
Software giant Microsoft (NASDAQ: MSFT) doesn’t need a lot of introduction. It is largely responsible for making the personal computer market what it is today, as its Windows operating system and Office software suite are used by the majority of computer owners. The company reports that over 1.3 billion devices are now powered by Windows 10, and using older versions of the operating system could push that number much, much higher. Figures from GlobalStats show that a version of Windows is installed on 74% of desktops and laptops worldwide.
However, the business is no longer limited to software. Video games, personal productivity and cloud computing services are some of the other lucrative businesses in his wheelhouse. None of its three main branches generates more than 37% of its turnover or operating profit. And, given the diversity you’ll find even within each of these three branches, it’s safe to say that no single operation accounts for more than one-fifth of the company’s total results. All of them continue to grow steadily as well.
To be clear, it’s not always fast growing. That’s the downside of size – it’s hard to add new customers when you’re already doing so much business.
However, not much can stop this monster. Since Microsoft stepped up the pressure on its cloud-based software as a service (SaaS) in 2017, sales and profits have never failed to improve in a quarter.
Free Mercado (NASDAQ: MELI) may not be a household name in North America. Ask a handful of South American consumers if they know the company and the vast majority of them will say yes.
This is because MercadoLibre is considered (and often called) the Amazon from South America, though the description doesn’t quite do it justice. In addition to an online marketplace, MercadoLibre also operates an online auction platform similar to eBay and a digital payment service a bit like Pay Pal. The company facilitated $ 20.9 billion in payments in the last quarter alone, and mediated $ 7.3 billion in sales of physical merchandise. Both figures were up 59% and 30% year-over-year, respectively, continuing long-standing growth trends.
There is also much more growth of this type in the cards. The South American consumer market is still in the early stages of digitalization. The mobile telecommunications industry association GSMA estimates that the number of mobile Internet users in Latin America will grow from the final number of 358 million in 2020 to 423 million by 2025. This growth forecast is good, even if it is not excellent.
Just keep in mind that many of the already existing internet users on the continent have yet to make full use of the web’s e-commerce offerings. Americas Market Intelligence reports that the Latin America e-commerce market will grow 29% from 2020 levels by 2024, with three quarters of this activity done on a mobile device. The trend plays in the direction of the hand of MercadoLibre.
4. The boot barn operations
Finally add Boot Grange Holdings (NYSE: BOOT) to your list of long term investments you’ll be glad you bought now.
Contrary to popular rhetoric, physical retail is not dying. This headwind blows almost exclusively in department stores and a handful of places dependent on shopping malls. More accessible and specialized stores, like most of the ones you find in a neighborhood mall, are doing surprisingly well.
Enter the boot barn. The 288-store chain has managed to tap into the country’s less urban (or at least less metropolitan) consumer base, offering them a variety of boots, denim and other typical country / western clothing.
This important market is also growing, if Boot Barn’s historic results are any indication. Revenue has improved in every fiscal year from $ 233 million in 2013 to $ 893 million for fiscal 2021 ending in March. Fiscal year 2022 is shaping up to be just as impressive, even after factoring in the lull in business caused by last year’s pandemic.
There’s more of this kind of in-store growth to boot (sorry!), As the retailer deepens its omnichannel efforts and exclusive brands. These initiatives, coupled with new store growth of around 10% per year, lead the company to project annual earnings per share growth of more than 20% for the foreseeable future.
This article represents the opinion of the author, who may disagree with the âofficialâ recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.