It is very easy when investing to look for a quick score. While everyone dreams of becoming rich overnight, the reality of investing is that making money in the stock market takes time, and seasoned investors understand that investing is more akin to a marathon than a sprint.
Spotting stocks that are likely to break out for short-term gains is not impossible, but it does require a lot of luck. The more prudent approach to investing to seek out companies that stand to gain for years to come, that you can buy shares in and enjoy steady gains over the long-term.
In order to find these stocks, you must first consider which sectors are likely to remain strong. You need to identify those sectors whose goods or services will remain in demand, and then look for companies within those sectors that are poised to lead the way moving forward.
In addition, the best long-term holdings are stocks with solid dividend programs, since you can use dividend reinvestment programs to steadily increase your ownership, which in turn will lead to higher dividend distributions over time, which you could eventually convert to cash payments to use for income should the need arise.
Like all stocks, even the best long-term stocks will go through periods of weakness. But as long as the long-term outlook for the stock, and its particular sector, remain upbeat, these periods of downturns should not panic the long-term investor, but instead be viewed as buying opportunities to increase ownership in the stocks.
Let’s take a look at five stocks that are safe investments for the long-term investor.