If there's one secret to success in investing, it's this: Think long term. As a case in point, the S&P 500 index historically goes down roughly one out of every four years on average. But it has never delivered a negative annualized return over a rolling 20-year period.
Of course, some stocks handily outperform the S&P 500 over the long run. The longer you're willing to wait, the more likely you are to enjoy great returns. With that in mind, here are three great stocks to buy and hold for the next 50 years.
You've probably heard the saying that "cash is king." That's often true. But in the entertainment world, content is king. That makes Disney (DIS -0.62%), the content juggernaut, a fantastic stock to buy and hold for decades.
Sure, Disney could face bumps in the road along the way. The company is navigating one right now with the COVID-19 pandemic. However, this is a temporary issue. It's only a matter of time before all of Disney's theme parks reopen, its cruise ships again set sail, and business returns to normal.
Rest assured that Disney will be a leader in whatever direction the entertainment industry takes in the future. At one point, some were concerned that the company would be left behind as the streaming TV market took off. With Disney+ delivering jaw-dropping growth, that's no longer a worry. Disney also has a "secret weapon" of sorts for developing new content to air on its fast-growing streaming service with its StageCraft virtual production set technology.
Fifty years ago, children flocked to Disneyland and Disney World, and millions watched Disney movies and TV programs. It's likely that will still be the case 50 years from now but with new twists. As long as people want to be entertained, Disney should keep delivering its magic.
2. Intuitive Surgical
If I could pick only one sector to invest in, it would be healthcare. Everybody needs healthcare, and the demand will only grow in the future. My view is that Intuitive Surgical (ISRG -1.07%) ranks as one of the best healthcare stocks on the market to buy and hold.
Intuitive Surgical pioneered the market for robotic surgical systems. Its da Vinci systems first launched over two decades ago. Today, there are close to 6,000 of these systems in use across the world. More than 8.5 million procedures have been performed using da Vinci so far.
As impressive as those numbers are, Intuitive Surgical is still only scratching the surface of its opportunity. Around 6 million procedures are performed each year where Intuitive already has products on the market with regulatory clearances for those procedures. By comparison, da Vinci was used in roughly 1.2 million procedures in 2020.
The company fully intends to expand its potential market through technological innovation. Intuitive is especially focused on soft tissue surgical procedures, which total around 20 million per year. Over the next several decades, though, look for the company to push the boundaries for robotic surgery even further and rewarding long-term investors handsomely along the way.
How difficult is it to imagine the world of 2071 as one where cash doesn't even exist? I don't think it's hard at all. We're already rapidly moving to a cashless society. This shift was accelerated with the COVID-19 pandemic. And Square (SQ -0.06%) stands at the forefront of this unstoppable trend.
Square's business has evolved in recent years to become much bigger than just the small credit card readers for which it's best known. The company created an entire ecosystem for the small- to medium-sized businesses that it serves. This ecosystem now includes software to help customers build online stores, manage loyalty programs, process payroll, and much more.
The biggest growth driver for Square, though, is its Cash App. At one point, referring to Cash App as a peer-to-peer payments app would've been appropriate. Now, though, it also supports banking functions such as cashing checks; it's tied to a debit card that enables buying online and in stores; and it facilitates low-cost investing in stocks.
If we're talking about the future for financial technology, cryptocurrencies have to be in the conversation. Square has jumped headfirst into crypto, supporting buying and selling bitcoin on Cash App as well as establishing a dedicated unit to focus on cryptocurrency application development. Fifty years from now you might not use cash, but there's a good chance you'll still use Square.