3 stocks to buy and keep for the next 50 years – The Motley Fool


Investing can seem complicated, but a concept is so simple that even a child can understand: the more you keep a diverse group of shares, the more chances you have of earning money. Invest wise Warren Buffett agrees, noting that his favorite holding period is eternal.

50 years is still a long time and all companies do not have the competitive advantages that are needed. With that in mind, we asked three Motley Fool contributors to get three actions that they believe are designed to ensure multigenerational success. here's why Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B), Microsoft (NASDAQ: MSFT), and Clorox (NYSE: CLX) were on their lists.

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Source of the image: Getty Images.

Longevity in more ways than one

John Bromels (Berkshire Hathaway): If you've ever had an interviewer asking where you see yourself in three years, you know how difficult it is to predict what the future holds for even such a short period. So, how is a poor investor supposed to predict what will happen in 50 years? Fortunately, no one is going to lock you up for a long time in a stock. But if I had to choose a title to buy and not touch for five decades, I would choose a reliable choice: Berkshire Hathaway.

The conglomerate of lead investor Warren Buffett has three great benefits for long-term investors. First, it is a very large company, and larger companies tend to offer more stability than their smaller cousins. Secondly, it is incredibly diversified, with holdings in the insurance, oil and gas, railways and even candy sectors, among others. This diversity should also help protect investors' money, even if one of these sectors experiences prolonged slump or collapses completely. And third, the company is hiring tons of money by boat. Specifically, Berkshire currently has $ 112 billion in cash, approximately one-third of its total book value.

Some might argue that it is Buffett himself who has grown older that has been key to the company's effective liquidity deployment. At the age of 88, he will no longer be here before age 50 (although I certainly would not let him pass by.) But Buffett inspired a new generation of Berkshire asset managers who should follow its philosophy of buying outstanding companies at fair prices.

For my money, this makes Berkshire one of the safest bets to hang on for half a century or two.

Enjoy the benefits of a winning economy and increased automation

Jamal Carnette, CFA (MicrosoftAt first glance, it may seem foolish to recommend that one of the larger companies be a good title to retain for the next 50 years, according to the theory of economic theory 101, if large companies will eventually be dethroned by newcomers more agile.

However, this is not what has happened in recent decades. In fact, the opposite has occurred as industries are increasingly concentrated. While the reasons are complex – lax antitrust enforcement vis-à-vis regulatory / governmental authorities, merger mergers or simply more productive and better performing employees – we now live in an economy where all winners are winners, an economy which benefits large companies such as Microsoft.

The economy of the future will be highly automated and robotic, which will benefit current Microsoft-based operating systems companies, as well as turbocharging results for its new artificial intelligence and cloud-based businesses. The then CEO, Steve Ballmer, missed the massive technological shift from the mobile workstation, and the new CEO, Nadella, has the firm intention of not repeating this mistake as the mobile goes to work. era of AI and the Internet of Things. Microsoft is well positioned to continue rewarding investors with returns over several decades.

A man and a woman dancing while cleaning their house with gloves.

Source of the image: Getty Images.

Clean up with shareholder returns

Rich Duprey (Clorox): Best known for its bleach, the Clorox household goods manufacturer has a portfolio of brands that consumers know and love: Glad trash bags, Kingsford coal and Pine-Sol and Formula 409 household cleaners, among many d & # 39; others. The fact of having such well-known brands is the consistency of sales and the benefits they provide to the company over time, even though it may go through periods of worry.

The second quarter of Clorox is a good example, with 4% revenue growth, with earnings per share falling 21% from the previous year. However, the decline in earnings per share is the result of a significant single gain a year ago from tax reform. On a flatter ground, Clorox broke the results of last year.

This consistency has served Clorox well for more than 100 years, which has made dividends to investors by increasing its dividend each year for more than 40 years. This places the householdware manufacturer in the top of the aristocrats' dividend, or companies that have increased their payments for 25 years. It also puts him on the path to join an even smaller group, Dividend Kings, who are companies that have been paying dividends for 50 years or more. The payment of Clorox currently yields 2.5% in good health a year.

Since 1977, when Clorox began to increase its payments, the bleach manufacturer has provided its shareholders with returns of over 28,000%, compared with only 2,700% for the first quarter. S & P 500. So it's a good bet that Clorox will continue to reward investors for the next 50 years.

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