My Best Stocks to Buy Now and Hold Forever

I've made two huge investing mistakes in my life. The first is that I didn't buy a stock that I thought was a great pick. The second was that I didn't hold onto a stock long enough. Unfortunately, I've made both of these mistakes multiple times. And they've hurt my investing performance a whole lot more than buying a bad stock and holding onto it too long has.

Unsurprisingly, Warren Buffett gave some excellent investing advice several years ago. He noted that his "favorite holding period is forever." Granted, not every stock is one that's an ideal candidate for this approach. But some are. Here are my best stocks to buy now and hold forever.

1. Alphabet

Let me begin by acknowledging that Alphabet (GOOG 0.74%) (GOOGL 0.55%) faces some challenges. Its revenue growth has slowed and could decelerate even more if advertisers cut back on spending in an economic downturn. Antitrust regulators in multiple countries have their targets set on the company. Alphabet's shares have also fallen more than 30% year to date.

I really like this stock anyway. Some of Alphabet's headwinds are only temporary. My prediction is that the antitrust efforts won't result in major repercussions. Even if they do, I firmly believe that if Alphabet was broken up, the sum of its pieces would be worth more than the company today.

No rival can touch Google Search's market share. Android is the most used mobile operating system in the world by far. YouTube still has a much bigger active user base than TikTok and is fighting back aggressively with YouTube Shorts. Google Cloud continues to gain momentum.

I fully expect Alphabet to keep growing on all of these fronts. However, I'm also optimistic about several of the company's famous "other bets." In particular, my prediction is that the Waymo self-driving car technology unit will become a key growth driver in the future.

With Alphabet's shares trading at the lowest earnings multiple in years, now is a great time to buy and hold this stock, in my opinion.

2. Disney

The Walt Disney Company (DIS 0.18%) is an ideal "forever" stock for me. Like millions of others, I went to Disney World as a kid. I watched Disney TV shows and movies. As an adult, I've taken my children to Disney World. My family has gone on a Disney cruise. And I still watch Disney TV shows and movies.

Sure, Disney's share price has taken a beating in the current dismal environment. However, this sharp decline doesn't change one thing about the company's future prospects. If anything, it just makes Disney stock's valuation more attractive.

I'm glad that Disney plans to keep ESPN instead of spinning it off. My hunch is that this buy-and-hold decision will pay off nicely over the long run. I also like Disney's move to offer an ad-supported option for its Disney+ streaming service.

Most of all, though, I'm confident that millions of people across the world will continue going to Disney theme parks and watching Disney TV shows and movies for decades to come. Mickey Mouse is likely to be alive and kicking (and making a lot of money) for a long time after I'm gone. 

3. Vertex Pharmaceuticals

You might think that biotech stocks aren't ones to buy and hold forever. After all, biotech companies' products eventually lose patent protection. But I think Vertex Pharmaceuticals (VRTX -1.02%) is an exception -- and one that's trouncing the market right now, by the way.

Vertex enjoys a monopoly in treating the underlying cause of the rare genetic disease cystic fibrosis (CF). A couple of potential rivals have CF candidates in phase 2 testing. However, they're years away from being able to even have a hope of challenging Vertex. In the meantime, Vertex is continuing to develop even more powerful therapies. And the key patents on its latest CF drug don't expire until 2037. 

It probably won't be too long before Vertex adds a blockbuster outside of CF to its lineup. The company and its partner, CRISPR Therapeutics (CRSP -1.35%), could win regulatory approvals for exa-cel in the second half of 2023 for treating sickle cell disease and transfusion-dependent beta-thalassemia.

The big biotech's pipeline also features two other promising drugs in late-stage testing. VX-548 is a non-opioid therapy targeting acute and neuropathic pain. VX-147 targets APOL1-mediated kidney disease, an indication with a larger patient population than CF has. Vertex is evaluating a potential cure for type 1 diabetes in early stage clinical studies as well.

I think that Vertex will continue to plow its profits into development and acquisitions to treat and cure serious diseases. It probably won't always be successful in these efforts. But I predict that Vertex will win on enough fronts to deliver market-beating gains for investors who buy and hold the stock.