Over time, the best way to beat the market is to buy shares of great stocks and hold them for a really long time. It's just that simple. Sure, there are more sophisticated ways to use the system for high gains, but those often entail large risks and can cause investors to lose as much as they gain. 

Holding for the long term also takes away a lot of the nail-biting anxiety that can accompany speculative bets or staying glued to stock-tracking screens. If you buy great stocks and close your eyes for a few years, you're likely to be pleasantly rewarded. 

Two companies that can help you achieve this serene success are Lululemon Athletica (NASDAQ:LULU) and American Express (NYSE:AXP).

A woman rolling out a yoga mat.

Image source: Getty Images.

Not just activewear

Lululemon has played a big role in the popularization of athleisure, or wearing athletic wear outside of the gym. Its patented high-tech fabrics in simple designs have resonated with the fitness-oriented crowd, and its customer-centric model that includes lifestyle perks and classes has created a community of like-minded individuals loyal to the brand.

The company rebounded quickly from 2020 sales drops with its focus on direct-to-consumer and digital channels, and it's thriving so far in 2021. Sales in the fiscal second quarter (ended July 31) increased 61% year over year, and earnings per share more than doubled from $0.66 last year to $1.59 this year.

Management is pushing through its goals of doubling men's revenue and quadrupling international sales by 2023, and it already surpassed its goal of doubling the e-commerce business. But it has a runway far beyond that. I'll give you a few reasons why I'm confident about its opportunities.

First, it offers a better product. Yes, you'll pay a premium for that as a customer. But ask any Lululemon fans, and they'll tell you why it's worth it. For one thing, the company has an exclusive collection of fabrics that it develops for an improved workout experience. For example, it recently launched the Instill line, which uses a fabric with a "hug" sensation, and last quarter it rolled out the AirSupport bra, which was in development for five years.

Second, it's leaning into its "sweat life" culture, offering more live classes and building out its community. Between run training guides, brand ambassadors, and the sharing of stories, Lululemon hopes that providing a supportive community will attract more customers and build loyalty. 

And lastly, it's testing out its acquisition of connected-fitness company Mirror by creating a dedicated Mirror website and launching in Canada. It will be interesting to see how this plays out in the face of Peloton Interactive's sales slowdown, but moving into new, complementary areas is a great sign of growth.

Lululemon is not exactly a bargain, trading at 75 times trailing-12-month earnings, but its price-to-earnings ratio has come down a lot this year even as the stock price has risen. The stock has gained 743% over the past five years. I can't guarantee what the future holds, but I can tell you that the company has the same working model and strong potential that got it to this point, making it a great bet.

A customer paying in a coffee shop with an American Express card.

Image source: American Express.

A new generation of cardholders 

American Express has an easy-to-understand model and has consistently grown its revenue over decades by targeting an affluent market that spends. It has traditionally focused on travel and leisure, which made it flop during the pandemic.

But changing trends have impacted its platform, and it's branched out to tap into new spending power, upping its game as financial technology (or fintech) powers the next wave in the financial industry. 

The company demonstrated a marked recovery in the third quarter, with revenue growing 25%, fueled by regular consumer shopping. That's important to note, since travel and entertainment remained below pre-pandemic levels.

Management pointed out two segments that have been lifting the top line. One is millennials, whom American Express has been targeting as they they gain greater spending power and represent the next generation of shoppers. This segment grew 38% from the 2019 numbers in the third quarter.

The other is small businesses, which the company has been focused on by offering new services and management solutions. The third-quarter report demonstrated an all-around effective campaign, with customer satisfaction metrics and retention rates higher than before the pandemic.

American Express makes money in several ways, which cushions it during times of instability and gives it flexibility in growing its business. It has a closed loop system, which means that unlike competitors Visa and Mastercard (which work with banking partners), it acts as its own bank when "lending" money through its credit cards. That gives it greater exposure to risk of default, which brought down its income during the pandemic as it set aside greater provisions for credit defaults. But it also means that in a typical season, it makes money on interest. It also has many fee-based credit cards that offer perks, and fees accounted for 12% of revenue in the third quarter. Those fees grew 27% over 2019 numbers, demonstrating that the model is not only working, but also appealing to a new set of customers. It also charges merchant fees, and makes money through loans and services to small businesses.

American Express stock has gained 152% over the past five years, outdoing the broader market. It trades at only 19 times traiing-12-month earnings, making it quite cheap, and investors should expect high performance for a long time.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.