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3 shares to hold for the next 20 years



It seems more difficult than ever for investors to stick to a buy and hold investment strategy in the middle of the day's news cycle that reports on every little thing the market does. Endless news about how companies are performing can make you feel like you're doing something wrong by holding on to a stock when everyone (at least that day) sells.

But choosing good companies to invest in and keep them for years, even decades, can be one of the best ways to build wealth. To help you get started on that path, investors should take a closer look at how Apple (NASDAQ: AAPL) Amazon.com (NASDAQ: AMZN) and Netflix (NASDAQ: NFLX) sets out to succeed over the next two decades.

  A variety of wall clocks.

Image Source: Getty Images.

Apple

You've probably heard the rumors: Apple has finished growing. Apple pessimists point to the undisputed fact that iPhone sales are not growing as they used to and that the company cannot rely on the device maintaining the future. They are right that iPhone sales will play an increasingly minor role in Apple's future, but they are mistaken about the company's future potential for growth.

Apple is in the midst of a major transition from relying on the iPhone to rely more on portable technology and the company's service segment. And that's probably a very smart move.

Apple is the undisputed leader in portable technology, with the company's Apple Watch and AirPods earbuds leading the package in device sales for smart watches and ear-worn devices. Although wearables will not replace iPhone sales completely anytime soon, the market for these devices is growing rapidly. Workable tech spending is expected to grow by 55% between 2019 and 2021. And in the last quarter, Apple continued to show how good it is to take advantage of this market, with revenue from the company's portable, home and accessories segment jumping 54% year over year. over years.

In addition, Apple is positioning itself to further leverage the service market through Apple Music, iCloud, Apple News, Apple Pay, App Store, Apple Arcade and AppleTV +. Revenues from the service segment increased by 18% in the fourth quarter, and now account for 19% of the company's total revenue, up from 15% last year. With the launch of AppleTV + only, investors can expect this segment to grow even further, helping to round Apple's long-term plan to connect its devices to an endless stream of services.

Amazon

There are a number of reasons why you can invest in Amazon for many years to come. Let's start with the most obvious: the company's online retail dominance. An estimated 38% of all online retail sales in the US take place on the company's online marketplace. E-commerce is still the most important revenue driver for Amazon's business, and even with the company's large market share position, there is still room for more growth.

In 2019, only 11% of all retail sales in the United States happened online, and two years from now, this percentage will only be 14%. Since online sales still take such a small percentage of total retail sales, Amazon still has a significant opportunity to increase its e-commerce dominance even more.

Of course, it's not Amazon's only long-term game. The company actually earns most of the profits from Amazon Web Services (AWS), its cloud computing service. AWS has about 32% of the public cloud market share right now and is far ahead of its closest competitor, Microsoft .

The cloud computing market will be worth $ 331 billion by 2022, and with Amazon already the clear leader in this area, it is very likely that the company will continue to dominate the market in the years to come.

If all this was not enough to convince you of Amazon's ability to grow in the coming decades, consider the company's growing position on the Internet of Things (IoT). IoT is still in the beginning, and Amazon has already laid the foundation for the company to be a key player. Amazon's Echo speaker setup, its Alexa smart assistant, doorbell clocks and other IoT devices and partnerships have given the company a huge opportunity to take advantage of the smart home market, which will be worth $ 151 billion by 2024.

Netflix [19659009] Some investors may look at a Netflix recommendation and tilt their heads in confusion. Really? Netflix is ​​a buy right now, as the company's stock price is down 4% over the past year and the streaming market is flooded by further competition from Apple and Walt Disney ? It actually is.

Let's tackle the first context: Netflix's stock price. Investors were counted over the summer when the streaming video giant reported second-quarter results that fell below expectations. But that pessimism was misplaced. In the third quarter, Netflix increased its paid subscribers by 21%, and sales jumped by 31%, both on an annual basis. For a company that has existed for as long as Netflix, there are impressive growth figures, and they come at a time when competition in the video streaming area is increasing.

Which leads us to the next hang-up that some investors have with Netflix: Won't AppleTV + and Disney + kill Netflix? To answer that, we just need to look at Netflix's current streaming dominance. The company closed the third quarter with an impressive 158 million accounts worldwide – a massive head start over some of its competitors and the reason why it still has a competitive advantage over its late-to-game competitors.

In addition, research has shown that users are more than happy to pay for multiple monthly video subscriptions without knocking. This means that tackling an extra $ 6.99 for Disney + or $ 4.99 for Apple TV + per month will not cause Netflix users to lose their current subscription.

Remember the second part of this strategy

It is one thing to see the great things that a company does to outperform its competitors and then buy the stock. But it's another thing to hold onto the stock when some bad quarters follow and negative headlines dominate the news feeds. When that happens – because it will happen – just remember to consider why you bought the stock in the first place to see if something does not match the original investment strategy. And if nothing has changed, stay the course.


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