In a trading environment that lately seems to be encouraging investors to think in 10-day timeframes, 10-month and even 10-week mindsets are becoming pretty rare. Ten-year timeframes are almost unheard of.
And yet, investors with this sort of long-term discipline often outperform their short-term minded peers. How so? Because it's all too easy to trade away your profits while jockeying for the proverbial "next big thing." The market has a way of luring some people in and shaking others out at the worst possible times.
To this end, anyone looking for some new stock picks that offer a balance of risk and reward that's not apt to change over the course of the coming decade may want to consider Alphabet (GOOGL -0.51%) (GOOG -0.45%), Verizon (VZ 0.65%), and Shopify (SHOP 1.43%). Here's why these three stocks are buy-and-hold darlings for the next decade.
1. Verizon is ready to do the most with 5G
You know the company. Verizon is the nation's leading wireless phone service provider, boasting a total of more than 94 million wireless customer connections as of the end of September. It's also got a few million broadband and fiber-optic customers in the mix, and even a handful of lingering landline connections. Wireless, however, is its big breadwinner.
It's not just this market leadership that makes Verizon a top long-term pick here, although it certainly doesn't hurt. It's what Verizon will be able to do with that leadership position.
It was largely lost in the pandemic and political noise of 2020, but this has been a big year for the fifth-generation (5G) network connectivity movement. Technology and telecom market research outfit Gartner estimated earlier this year that spending on 5G infrastructure would double in 2020 compared to 2019's cash outlays, with Verizon seemingly responsible for more than its fair share of it. The company's analyst day held in November was decidedly focused on its expanding 5G capabilities, and an opportunity for the company to confirm it would be offering ultra wideband 5G service in 60 cities before the end of this year. Ultra wideband connections utilize the millimeter-wave portion of available radio frequency spectrum to achieve the speediest of all 5G connections. Not counting its ultra-wideband offers, Verizon's 5G service is now available to more than 200 million Americans in 1,800 U.S. cities. Depending on who you ask, that makes Verizon the current 5G leader, and it's poised to hold that lead thanks to huge investments in its fiber-optic network that can do what radio transmissions can't.
It matters. These 5G connections are going to usher in the long-touted era of the Internet of Things, and even wireless at-home broadband service. It could take 10 years, however, to make the most of the opportunity.
In the meantime, new Verizon investors will be plugging into the stock while its dividend yield is an above-average 4.2%.
2. Shopify is the un-Amazon we've been waiting for
It's possible you've used the Shopify platform without even realizing it. The company offers consumer-facing companies a variety of tools to help them manage and promote a direct-to-consumer e-commerce business.
Yes, the COVID-19 pandemic boosted its business. With the world scrambling to do more shopping online and less in stores, Shopify's revenue through the first three quarters of 2020 is 82% ahead of where it was at the same point a year earlier. The company even swung to a profit during the three-month stretch ending in September.
Shopify's growth, however, was solid before the pandemic took shape, and is likely to remain robust even after the crisis ends. That's because consumers and companies alike have grown weary of the control Amazon has on North America's e-commerce market. Digital Commerce 360 estimates that Amazon alone accounts for around one-fourth of all dollars spent online in the U.S. Office supply store chain Staples, consumer staples company Kraft Heinz, and apparel retailer Dressbarn are just some of the brands that have tapped Shopify to help them build an online presence.
This shift still has plenty of runway ahead of it, too. Market research company eMarketer estimates that direct-to-consumer sales in the U.S. will reach $17.8 billion this year, which is only a fraction of the more than $200 billion worth of product sales Amazon is apt to report for fiscal 2020. It's another 10-year project, but one that's worth the wait.
3. Alphabet isn't going anywhere, in a good way
Finally, like Verizon, Alphabet isn't a name that needs an introduction. It's the parent company to search engine giant Google. Google is so much more than a mere search engine, though. It's an entire ecosystem ultimately designed to monetize its users no matter how they use it.
Think about it. The world's 1.5 billion Gmail users may love the fact that it's "free," but with that Google-supplied identification, those consumers are also easily logged into the company's other offerings like Google Docs and Google Maps, as well as the Google Play app store and YouTube. And speaking of YouTube, it's the world's busiest streaming video platform, boasting over 2 billion monthly users who collectively watch more than 1 billion hours' worth of video every day. All of it collectively helps Alphabet build a digital profile of its users, which in turn helps Google show you highly targeted advertisements.
Don't think for a minute that Google's business model is under any real threat either, despite increasing levels of regulatory rhetoric and consumer angst regarding privacy rights. GlobalStats data says Google's search engine fielded more than 92% of the world's search queries last month -- a figure that's not changed in years. In the same vein, Google's Android operating system's share of the mobile device market is still holding relatively steady at more than 70%. The company remains the internet's most important intersection, even if it's got some age on it.