The Best Way I’ve Found to Earn 4-Digit Gains
On July 13, I told you about the simple strategy that’s never lost money.
Put simply, the longer you hold an investment, the better your chances of making a profit. The S&P 500 has never had a losing 20-year span, going all the way back to the 1950s.
The key is finding a handful of companies that enjoy huge (and lasting) advantages over the competition… companies that pay their investors each and every year by dishing out fat dividends… and companies buying back massive amounts of their own stock.
Once you find them, the strategy is simple — just buy their shares and hold “Forever.”
But if you want to see the best reason why investing “Forever” is the smartest way to let the market make you wealthy, pay attention to the table below…
A week ago, I ran a simple stock screen on my research team’s Bloomberg terminal. I asked this piece of research software to show me all the stocks in the United States that have returned more than 500% in the past year. And to weed out the fly-by-night penny stocks, I had it return only stocks with a market cap above $250 million.
You can see the results for yourself. It’s just 11 stocks. This is the definition of trying to find a needle in a haystack.
In fact, I bet you’ve never even heard of any of these stocks… much less own any of them. And look at the first-place finisher… General Cannabis. Are serious investors supposed to make money from a company called General Cannabis?
But then I ran the exact same screen… only I changed the time period to the past 10 years. The results are night and day.
In the past 10 years, 271 stocks returned more than 500%. More than 23 times as many as the past year.
That’s because the market’s greatest stocks — not the extremely risky plays that skyrocket and crash seemingly overnight — take years to reach their full potential.
They won’t do it in one year… or even two or three years. But in the meantime, investors who hold these stocks are able to steadily compound their gains year in and year out.
Take a well-known case — shares of Apple (Nasdaq: AAPL). Apple has been one of the market’s best performers for years. But even in the stock’s best one-year period, investors made 289%.
I wouldn’t sneeze at a 289% gain, but anyone who bought for a year… or an even shorter time… sold themselves short.
You can see from my chart that Apple wasn’t done after six months or a year…
Since 2003, Apple has gained 4,280%. That’s an average annual gain of 56% and enough to turn every $100 invested into nearly $5,000.
Now you can see why I think buying the right stocks and holding “Forever” is the best way I’ve found to earn 4-digit gains.
Investing for a short period in a stock like Apple is like ordering a seven-course meal and only sticking around for the appetizer. Sure you get a taste… but wouldn’t you rather have the whole meal?
And yet, as I told you earlier this week, the average holding period for a stock is now down to just seven months.
Action to Take –> I think this is a mistake. I’m not saying you should buy and hold every investment for decades. But what I’ve discovered — and wish I had realized sooner — is that it’s the few investments you simply buy and hold “Forever” that make the biggest difference to your long-term wealth.
It’s one of the reasons my Top 10 Stocks staff and I started researching the best stocks we think investors can hold “Forever.”
What we found was that many of the stocks we tagged as “Forever” ides were already owned by many of the world’s richest investors, politicians, and businessmen — including Warren Buffett, George Soros, and John Kerry.
You’ll can find all the details in a free presentation I just put together called “The 10 Best Stocks to Hold Forever.” Visit this link to watch right now.