Recent economic indicators, like the S&P Global (NYSE:SPGI) composite PMI, have surpassed expectations. This particular metric hit a 25-month high in May, signaling a resilient U.S. economy. Many experts have noted the acceleration and progress seen on this front, now foreseeing solid GDP growth for Q2. Notably, these improved forecasts come despite challenges like rising input prices and inflationary pressures. For those looking to create long-term wealth, investing in such a climate is difficult, given the range of tailwinds and headwinds in the market right now.
That said, it’s my view that investing in buy-and-hold stocks for the long-term is among the best ways to generate sustainable and growing wealth over time. Investing in true “forever” stocks requires a strong focus on fundamentals, with such companies ideally well-positioned with a strong competitive edge.
Here are three stocks I think fit this bill. Each are reasonably valued, and represent companies with strong growth prospects over the long-term.
Berkshire Hathaway (BRK-B)
Owned by investment mogul Warren Buffett, Berkshire Hathaway’s (NYSE:BRK-B) portfolio remains one of the best-performing long-term options in the market. With an investment portfolio comprised of 40 stocks mostly from the financial sector, Buffett’s choices are always the standard for investors with a truly long-term investing time horizon.
That’s largely because the Oracle of Omaha typically buys stocks and holds them for very long periods of time. Contrary to most traders and investors with short-term time frames, this is a welcome approach for many.
Accordingly, many investors are always on the lookout for Buffett’s most recent investment moves. In fact, in Berkshire’s 13F form, a number of new investments have been detailed in recent years. Companies Berkshire acquires (typically in part) surge in value as millions of investors ride his coattails into these trades.
The company’s recent indirect involvement in cryptocurrencies via Nu Holdings signifies a subtle shift in investment tactics. Reports in early 2023 indicated that a growing global fintech trend is being built. This may have influenced Berkshire’s interest in such ventures despite Buffett’s reservations. In addition to holding a number of world-class stocks (such as the next company on this list), Berkshire has proven to have a team focused on finding the next big thing.
Apple (AAPL)
As we kick off June, Apple (NASDAQ:AAPL) has emerged as a top AI stock pick. AAPL stock has rallied ahead of its upcoming WWDC 2024 conference in June. Analyst Dan Ives predicts a potential growth surge, raising AAPL’s price target to $275 and labeling the event as the most critical in a decade. With Apple’s market cap narrowing its lead over Nvidia, June’s developments hold the key to its future trajectory.
Apple is seeing a resurgence in China sales despite challenges from new EU regulations. However, investors may remain cautious as Nvidia (NASDAQ:NVDA) nips at its heels for the second spot in the global market capitalization rankings. The recent uptick in Chinese activity is a strong catalyst for the company, and if Apple’s new rumored AI-driven iPhone is as big a hit as many expect, this could be a company with a lot to offer in the months ahead.
I think Apple’s valuation remains steep, and I’ve been cautious around this stock for some time. Buffett has felt the same way, recently trimming his Apple stake significantly.
That said, for long-term investors seeking defensive tech options, there are few better companies to consider than Apple right now.
McDonald’s (MCD)
Standing out as one of the most valuable recession-proof stocks in the market, McDonald’s (NYSE:MCD) appears to be shifting gears in the right direction. The fast food giant is stepping up to the plate in a big way, recently introducing budget-friendly meals. The company’s proposed $5 value menu aims to drive home affordability for consumers despite stubborn inflation on the cost side of the ledger.
Despite these recent moves, MCD stock has been on a decline. The stock is down more than 13% year-to-date and has been among the biggest laggards among large-cap non-tech stocks in the market.
But for long-term investors seeking defensive exposure and a company that appears to be moving in the right direction, I think this could be a dip worth buying. The company’s recent value menu addition is a step in the right direction. If prices are brought down to levels consumers can justify, this is a company that could regain its market share growth which has propelled the stock higher for decades and decades in the past.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
