"Set and forget" isn't a great investing strategy. Some stocks can initially look very promising. Over time, though, things can change. The once-attractive stocks could become clunkers.
While you'll always want to stay abreast of any shifting dynamics, there are still some stocks that are likely to remain strong for a really long time. Here are three top stocks to buy and hold for the next decade and beyond.
1. Amazon
Here are four questions that I think underscore why Amazon (AMZN -1.65%) is a fantastic stock to buy and hold:
- Will e-commerce be more important 10 years from now?
- Will more apps and data run in the cloud 10 years from now?
- Will Amazon hold on to its leadership positions in these markets?
- Can Amazon successfully expand into new major markets?
My answer to all of these questions is a resounding "yes." E-commerce only made up 14.8% of total retail sales in the U.S. in the third quarter of 2022. I think there's no question that apps and data will continue shifting to the cloud. If Amazon CEO Andy Jassy is right, over the next 10 to 15 years nearly 95% of global IT spending could be in the cloud.
Amazon currently ranks as the biggest player in e-commerce and cloud hosting. Sure, it's possible that the company could be toppled. However, I think that is highly unlikely.
As for new markets, Amazon is already making progress. The company is carving out a niche for itself in healthcare. It's rapidly gaining ground in digital advertising. I don't expect that Amazon will be left out of the artificial intelligence race, either. The stock is an absolute no-brainer buy right now, in my opinion.
2. Disney
Bob Iger is back in the driver's seat at Disney (DIS -1.01%), and it shows. He recently unveiled a turnaround plan for the company that was widely applauded. Most importantly, Iger is laser-focused on increasing profitability. That's great news for shareholders.
The entertainment giant's biggest challenge is its Disney+ streaming service, which continues to lose a lot of money. However, Iger said in the recent quarterly update that the service is on track to achieve profitability by the end of fiscal year 2024, which ends in October of next year.
Once Disney+ turns a profit, the sky's the limit for Disney. The company's theme parks should keep up their winning ways. Disney's Marvel and Star Wars movie franchises should draw crowds for years to come.
Perhaps the best reason to buy and hold Disney stock, though, is that the company is a master at creating new content and monetizing the content in multiple ways. Regardless of how technology might change the entertainment industry, Disney should remain on top.
3. Vertex Pharmaceuticals
Biotech stocks aren't always the best choices for investors to buy and hold. They tend to be risky because of the potential for clinical and regulatory setbacks. However, Vertex Pharmaceuticals (VRTX -0.76%) isn't your run-of-the-mill biotech stock.
For one thing, Vertex is already highly profitable thanks to its monopoly in treating the underlying cause of cystic fibrosis (CF). The company has a huge head start on any potential future rivals. It's not resting on its laurels, though. Vertex is evaluating its most powerful CF therapy yet in late-stage testing. It's also working with Moderna to develop a therapy to help the 5,000 or so CF patients who can't benefit from current drugs.
Vertex and CRISPR Therapeutics hope to win regulatory approvals later this year for exa-cel in treating sickle cell disease and beta-thalassemia. If approved, exa-cel will become the first CRISPR gene-editing therapy on the market. Vertex thinks the drug has a multi-billion-dollar opportunity.
But exa-cel isn't the only program in Vertex's pipeline that could become a mega-blockbuster. Non-opioid pain drug VX-548 has tremendous potential. So does inaxaplin, a drug the company is evaluating in a pivotal study targeting APOL1-mediated kidney disease. This indication has an even bigger patient population than CF. In addition, Vertex believes that it has early stage programs that could eventually cure type 1 diabetes.
With just a little bit of luck, Vertex Pharmaceuticals should be a much bigger company 10 years from now. Like Amazon and Disney, I think it's an ideal stock to buy and hold for the next decade and beyond.
