If You'd Held These 10 Stocks Instead of Sold, You'd Be Rich Now
You've heard this advice before: Buy and hold — invest for the long term. But it's hard to do when you see some of your investments languish near all-time lows. Patience is challenging, but if you can find a way to stay strong, there's a good chance you'll be rewarded in the long run.
Here are 10 recent examples that show how investors with long time horizons will eventually reap great financial benefits.
1. Apple [AAPL]
After the death of Steve Jobs, everyone wondered if the iconic company would return to being the most innovative brand around. It went through a lull, but thanks largely to sales of the iPhone, Apple is now the most valuable company in the world and shares are trading near all-time highs. Shares are up more than 20% in 2015 and 50% since this time last year.
2. Amazon [AMZN]
For years now, many observers have complained about Amazon's thin or even non-existent profits. Shares tumbled badly last fall after the troubled launch of the Amazon Fire Phone. But they rebounded to new heights at the end of April after reports of strong earnings from Amazon's web services business. Shares have risen more than 40% in the last 52 weeks, rewarding those investors who hung in there.
3. Netflix [NFLX]
The company made what was widely regarded as a massive blunder back in 2011 when it announced it would split into separate services for streaming movies and DVDs. It was an unpopular move that led the company's stock price to drop by more than 60%. But Netflix quickly fixed the mistake and is now a leader in the streaming media business, and its stock price has jumped nearly ten-fold.
4. AOL, Inc. [AOL]
For many people, AOL may be a symbol of the old dot-com era, complete with dial-up Internet access and romantic comedies featuring Tom Hanks and Meg Ryan. But the reality is that the company has quietly transformed itself into a content provider and key player in the web ad space. Shares shot up recently when Verizon announced it would buy AOL for more than $4 billion. If the sale goes through, AOL shareholders will end up with $50 a share — a 37% increase over the last year and 80% jump in the last three years. (Disclosure: I own some shares of AOL.)
5. Boeing [BA]
Shares of this major aerospace company languished as the government announced cuts in defense spending — and the troubled rollout of the 787 "Dreamliner" plane in 2013 did not help. Then came the disappearance of Malaysian Airlines Flight 370 — a Boeing plane. But anyone who unloaded their Boeing shares would have missed out on a big rise in share value. Boeing shares are up 40% in the last two years, and up 12% since the start of 2015. The company delivered a record 723 airplanes in 2014 and expects to deliver another 755 this year.
6. Facebook [FB]
Despite considerable hype, Facebook's initial public offering did not go particularly well. And things got worse, as shares of the social networking company traded at about half their original value for much of 2012. Eventually, Facebook CEO Mark Zuckerberg went all in with a mobile advertising strategy that paid off for the company and investors. Shares now trade at about $80, near an all-time high. (Disclosure: I own some shares of Facebook.)
7. Rite Aid [RAD]
For a long time, investors in this pharmacy chain were the ones buying heavy doses of stomach and headache medicine, as the company was practically near bankruptcy during the economic downturn. But a restructuring plan has helped Rite Aid shed debt and increase sales, to the benefit of investors. Shares have nearly doubled since the fall of 2014 and are up 15% year to date.
8. Goldman Sachs [GS]
Of course, anyone invested in bank stocks in 2008 would have lost some serious dough. But despite some major problems with some of its peers and the industry as a whole, Goldman's viability as a company was never really questioned. Shares dropped to about $50 in the fall of 2008, but then rose back to $189 by the following year once investors realized that Goldman wasn't going anywhere. After another tough year in 2011, shares are now trading at more than $200.
9. Starbucks [SBUX]
The coffee chain is seemingly ubiquitous, but that doesn't mean it has always been a great performing stock. During the financial downturn, shares got battered as customers cut back on pricey vanilla lattes. Starbucks shares traded below $4 in the fall of 2008, but then began a steady climb as the company did the tough work of closing underperforming stores and laying off workers. Shares topped $93 in April of this year and then split. Kudos to those investors who hung in there.
10. The S&P 500
No doubt, it was tough times in 2008, when the S&P 500 fell more than 36%. But those investors with the intestinal fortitude to hang in there were rewarded with nice returns every year since. The average annual return from 2009–2014 was 17.4%, more than recouping any losses from the period of the Great Recession. To invest in the S&P 500 or broader U.S. stock market, look at low-cost mutual funds or ETFs, such as Vanguard's S&P 500 Index Fund (VFINX) or iShares Total Market ETF (ITOT).
Do you have any tales of stocks you're grateful to have kept?
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