Here's some good news: Well over half of Americans own stock -- 62%, per a recent Motley Fool research report on stock ownership in America. That's great, because it's hard to beat the stock market for building long-term wealth.
But that doesn't mean the 62% have it made -- because some may only have a few dollars in a 401(k) account, invested in a mutual fund that holds stocks. That's very different from a stock (and/or fund) portfolio worth tens or hundreds of thousands of dollars, which can be well on its way to being worth a million dollars in the years ahead.
Here's a look at six stocks and funds that should serve most Americans well as they aim to build wealth for their futures.
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Stocks and funds to consider for your portfolio
So, which stocks and funds do I think everyone should have in their portfolio? Well, it's hard to offer a definitive answer that will suit everyone, but below are sixinvestments that I think are quite promising for most investors.
1. Berkshire Hathaway
Berkshire Hathaway (BRK.A +2.66%) (BRK.B +2.46%) has been carefully built to last by Warren Buffett, who is stepping down as CEO in 2026. It offers no dividend right now, but some speculate that when Greg Abel takes the reins, a dividend might follow.
NYSE: BRK.B
Key Data Points
If you invest in Berkshire Hathaway, you'll become a part-owner of the dozens of businesses it owns, such as GEICO, Benjamin Moore, Dairy Queen, McLane, See's Candies, and the entire BNSF railroad -- and you'll have a stake in Berkshire's stock portfolio, too, which holds major positions in companies such as Apple, American Express, Coca-Cola, and Bank of America.
The stock isn't very undervalued -- or overvalued -- at recent levels and it's likely to keep growing over the decades to come.
2. Costco
Costco Wholesale (COST +1.37%), on the other hand, does seem somewhat overvalued, with a recent forward-looking price-to-earnings (P/E) ratio of 45, well above the five-year average of 40. So perhaps don't jump in with both feet quite yet -- or invest in it gradually over time, if you're so inclined.
NASDAQ: COST
Key Data Points
What I love most about Costco is that it works hard to serve all its stakeholders well: its employees, customers, and shareholders alike. It does this through competitive pay and benefits; low prices, mostly capped at a 13% or 14% markup; and a solid stock performance, including dividends. Its business model also features significant recurring revenue, in the form of membership fees that generate several billion dollars annually.
3. Amazon.com
Amazon.com (AMZN 1.91%) seems fairly valued at recent levels, with a forward P/E of 30, well below the five-year average of 45. It's one of the Magnificent Seven stocks, and is a major operator in e-commerce, cloud computing, and more. It pays no dividend, but it's been growing briskly for decades and is poised to continue doing so.
NASDAQ: AMZN
Key Data Points
4. Vanguard S&P 500 ETF
No stock portfolio should hold only a few stocks, so unless you're looking to follow our Foolish investing philosophy, which suggests buying into around 25 or more companies and aiming to hang on to your shares for at least five years, you might consider investing in some top-notch ETFs. A much-recommended one is a simple low-fee S&P 500 index fund, such as the Vanguard S&P 500 ETF (VOO 1.16%).
There's a caveat here, which is that the top 10 holdings recently made up about 39% of the fund's value. That's quite concentrated, and in some eyes, a bit risky. If that concerns you, consider the also-promising Invesco S&P 500 Equal Weight ETF (RSP 0.66%). It, too, is an S&P 500 index fund, but it holds each of the 500 stocks in roughly equal measure.
5. Schwab U.S. Dividend Equity ETF
The Schwab U.S. Dividend Equity ETF (SCHD 0.11%) is a terrific portfolio prospect, as it combines a solid dividend yield with an impressive growth performance. It tracks the Dow Jones U.S. Dividend 100 Index -- which encompasses 100 stocks with track records of paying dividends for at least 10 years. Its top holdings recently were AbbVie and Cisco Systems, and its dividend yield was recently 3.8%.
6. Technology Select Sector SPDR ETF
Just in case you'd like a chance of juicing your portfolio's returns, consider parking some of your dollars in the Technology Select Sector SPDR ETF (XLK) (XLK 2.64%). It recently held 69 stocks, involved in businesses such as semiconductor equipment, internet software and services, IT consulting services, computers, and peripherals.
Over the past decade, this ETF has averaged annual gains of 22.8%, and 20% over the past 15 years. Note, though, that when market downturns happen, as they occasionally do, high-flying growth stocks including those in funds such as this one may drop sharply in value -- for a short or long while. Remember that investments with greater potential gains can carry more risk.
Those are six investments I think most people would do well to consider for their long-term portfolios. Dig deeper into any that interest you.
