10 Best Long-Term Stocks For Beginner Investors

Key Takeaways:


To be clear, there’s no objectively “best” long-term stock for beginner investors. If for nothing else, investors themselves are as diverse as the stocks they choose to invest in. However, some stocks are better suited for those who are new to the world of investing, not because they are the best long-term stocks, but rather because they offer a solid foundation to build a portfolio off of. A strong foundation is pivotal in simultaneously establishing long-term wealth-building prospects and mitigating risk. The unique convergence of potential and risk aversion is ultimately what new investors should covet the most, and the best long-term stocks listed below should represent a great place to start.

Which Stocks Are Best For Long-Term Investors?

The best long-term stocks should not be confused with those coveted by day traders. Whereas traders prioritize capitalizing on intraday volatility or undervalued stocks, long-term investors tend to focus on how well a company will perform over several years—if not decades. As a result, the best long-term stocks aren’t necessarily the best performing in today’s market, but rather those with the brightest future; they are well-positioned to capitalize on secular trends without sacrificing a semblance of stability.

Many stocks are great for many investors, which begs a specific question: Which stocks are best for long term? The following list represents the stocks long-term investors should consider adding to their portfolios:

  1. IDEXX Laboratories, Inc. (NASDAQ: IDXX)

  2. Shopify Inc. (NYSE: SHOP)

  3. Netflix, Inc. (NASDAQ: NFLX)

  4. The Trade Desk, Inc. (NASDAQ: TTD)

  5. Zoom Video Communications, Inc. (NASDAQ: ZM)

  6. Pinterest, Inc. (NYSE: PINS)

  7. The Walt Disney Company (NYSE: DIS)

  8. Redfin Corporation (NASDAQ: RDFN)

  9. Fastly, Inc. (NYSE: FSLY)

  10. Snowflake Inc. (NYSE: SNOW)

As some of the best long-term stocks to buy and hold, the equities listed above are a great place for any investor to start a portfolio.


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Best long-term stocks to buy right now

IDEXX Laboratories

IDEXX Laboratories develops, manufactures, and distributes goods and provides services for the veterinary, livestock and poultry, dairy, and water testing markets. As IDEXX is quick to point out, however, their goods and services “enhance the health and well-being of pets, people, and livestock.”

The company burst onto the scene when COVID-19 was officially declared a pandemic, and people found themselves spending more time at home. To pass the time and make a living at home more enjoyable, more people sought the companionship of a pet. In doing so, more people found themselves in need of veterinary services, which will extend far beyond the pandemic. While most stock trends are cyclical, the love owners express for their pets is not. The amount owners are willing to spend on their loved ones is growing with each passing year, and IDEXX Laboratories is well-positioned to ride the headwinds.

More importantly, the company sees its total addressable market growing for the foreseeable future. Driven by better testing platforms, better practices, and more international exposure, IDEXX should find itself in the growth phase of its business long enough for new investors to enjoy nice returns.

All of IDEXX’s recent success has resulted in a meteoric run over the last decade, and the price of the stock has increased in response. The company’s valuation is high (as evidenced by its current price tag), but the secular tailwinds at play suggest plenty of room to grow.

Shopify

Shopify has become synonymous with online e-commerce platforms on a global scale. As its name suggests, Shopify grants online retailers of all sizes and experience to build an online presence—or “Shopify” their own websites. The company specializes in building out storefronts, fulfillment centers, payment, and shipping services. With the help of Shopify, any business can compete with a legitimate online presence in today’s ever-competitive marketplace.

Not unlike IDEXX, Shopify has had a large run-up in recent history, but it’s not too late for new investors to make it an entry position in their portfolios. The transition from retail to online e-commerce was already in full swing, but the introduction of the Coronavirus increased the need for businesses to operate efficiently online exponentially. Today (more than ever), businesses of every size need to have an online presence, and Shopify is becoming the best answer.

2020 was a banner year for Shopify. The advent of e-commerce helped the company grow its customer base to 1.7 million businesses; of those customers, 10,000 are part of the upper-tier Shopify Plus subscription plan. It is reasonable to assume upper-tier customers will increase moving forward as Shopify continues to add value to its users. All things considered, Shopify has grown a lot in recent history, but secular tailwinds are working in its favor to continue growing for new investors.

Netflix

Netflix has already established itself as the premier video streaming service, both domestically and internationally. The streaming business provides customers the ability to receive media content through a host of Internet-connected devices, not the least of which include TVs, digital video players, television set-top boxes, and mobile devices. In a world where streaming is taking over cable television, Netflix is set to become the preferred TV-watching medium.

As the leader in its industry, however, Netflix comes with what appears to be a reasonable price tag. With a PEG of 2.08x, Netflix’s price/earnings to growth is similar to that of the entertainment industry. Although Netflix’s price-to-earnings ratio is 92.47x, among the highest in the industry, its potential suggests the stock would be a great fit for new investors.

Netflix has already made millionaires out of ordinary investors, but the momentum is far from over. There’s nothing to suggest Netflix doesn’t have market-beating potential for the next decade or more. As traditional cable companies lose market share and better internet access is granted to the rest of the world, Netflix will be the primary beneficiary of a growing addressable market. Investors who get in now, even after the impressive run, will most likely be happy they did ten years from now.

The Trade Desk

The Trade Desk awards its clients a cloud-based technology platform that optimizes ad spending and performance over online streaming and internet services. With its platform, The Trade Desk helps businesses get the ads they want in front of the audience they want. It aids in the ad-buying process and charges a percentage of the client’s total advertising spend. The combination of efficiency and optimization not only helps focus ad dollars for businesses of every size, but it helps The Trade Desk increase recurring revenue.

However, more than anything else, The Trade Desk is a play on the “cable cutting” trend previously discussed with Netflix. Today, most ad dollars are spread out over cable television, where viewers are inundated with commercials show after show. While The Trade Desk’s specialty doesn’t focus on television ads, it does help clients put ads in front of customers on streaming services and websites. As more and more people cut cable and transition to streaming services, The Trade Desk will inherently gain market share as a leader in the industry.

The Trade Desk is another company that has had an impressive run in recent history. Still, the tailwinds for this company are as equally as impressive as the previously discussed businesses—if not more so. The market cap is impressive and growing. Adding this business to a portfolio today can really bolster the holdings of a new investor.

Zoom Video Communications

Zoom is a cloud-based communications company that has placed an emphasis on video conferencing. The advent of technology has enabled Zoom to connect people globally as if they were in the same room. Perhaps even more impressively, however, Zoom was virtually unheard of just over a year ago. Today, many businesses couldn’t survive without it.

Zoom came to prominence during the pandemic, as the work-from-home trend became necessary. Thanks to Zoom, businesses were able to transition almost entirely online and function uninterrupted. That said, Zoom’s recent success isn’t merely the result of the pandemic; it has created a great service that everyone is growing more dependent on. There is no reason to think Zoom’s coming of age will end when the pandemic is over. In fact, the pandemic appears to have merely accelerated Zoom’s adoption by just about every industry.

Moving forward, those companies which grew to love Zoom’s services will undoubtedly continue to use them. As things stand, Zoom changed the way businesses operate, and it should continue to do so moving forward. New investors who add this company to their portfolio now could be getting in on the ground level of an incredible secular trend.

Pinterest

Having been around for years, most people are already familiar with Pinterest’s services: It’s a social media platform founded on the idea of image sharing and visual searches. The majority of its users collect links to build virtual oil boards. Pinterest is a departure from traditional social media sites, as it has managed to avoid the gross negativity most platforms have grown synonymous with. Additionally, Pinterest has found a way to capitalize on its users in a way that should make it one of the best long-term stocks for new investors.

As a platform that allows its users to collect and aggregate personal interest, Pinterest has created a way for people to browse topics they already care about. In doing so, Pinterest has created the ultimate ad space online. Now in its business growth stage, Pinterest has yet to tap into its full potential, but when it does, it should see revenue skyrocket. The platform is perfectly tailored for advertisers to market to a huge market.

To make the stock look even better, Pinterest recently partnered with Shopify and Etsy to bridge the gap between marketing and buying. In one fell swoop, Pinterest can connect customers to businesses and grow revenue in return. As Pinterest continues to grow its user base, its ability to connect customers to companies will turn out to be a lucrative choice for today’s investors.

The Walt Disney Company

Disney has become synonymous with the family entertainment industry. In addition to owning the intellectual property of some of today’s greatest brands and operating the most visited theme parks in the world, Disney is a beloved business with more loyalty than just about any company on the face of the planet.

Disney is widely considered one of the best long-term stocks for new investors because of its unique ability to combine safety and growth. Few stocks offer both the upside and stability of Disney and its great management track record all but ensure momentum will continue.

Not surprisingly, Disney was walloped by the pandemic. Theme parks were shut down for the better part of a year (more than a year in some cases), cruise ships are still out of operation, and the travel industry was one of the hardest hit. Despite all of the pandemic headwinds, Disney’s stock managed to hit all-time highs thanks to innovative management and its new streaming service.

Disney Plus granted an already great company a large amount of revenue when it needed it most. The new streaming service added customers at an alarming pace and should continue to do so for years. No other company can compete with Disney’s intellectual property, and today’s investors should be able to thank the company’s current portfolio for years of growth.

Redfin

Redfin has created an online platform for homebuyers and sellers to follow through with transactions at a lower cost in a fraction of the time. More specifically, however, Redfin’s platform buys and sells real estate while dramatically lowering brokerage commissions and closing times. The method Redfin uses isn’t all that revolutionary, but the ability to complete home sales online is a novel idea with plenty of room to run.

The pandemic has taught us that there’s no need to visit a home personally if the right online tools are present. Not only that, but Redfin built an established customer base who will evangelize the business model moving forward. Even better, Redfin doesn’t need to take the market share away from competitors to realize success. There is plenty of room in the housing sector for businesses like Redfin and Zillow to co-exist.

The real reason Redfin looks like one of the best long-term stocks for new investors is the e-commerce tailwinds which paper to be picking up. More and more people are turning to online portals to buy and sell homes. In a market as big as the real estate sector, Redfin can become a truly great stock by taking only a fraction of the market share.

Fastly

Fastly, as its name would like to suggest, owns and operates a global edge-computing network that enables the internet to run faster and more securely for its users. Simply put, Fastly is the future of the Internet. With vast services, customers can rest assured their sites will work exactly how they want them to with efficient security. With all I have already said about e-commerce, it shouldn’t be hard to see this company’s tailwinds.

Fastly has found its niche servicing an industry that must operate with as little lag as possible, and it has proven lucrative up to this point. However, as the need for faster, more reliable internet expands, businesses of all sizes will require Fastly’s services.

Fastly has grown revenue at an impressive rate, and the “gig economy” is only in its infancy. There’s no doubt the internet is the future for most businesses, and Fastly could be investors’ foot in the door for a very lucrative secular trend. The trick is not to see where Fastly is today, but where it will be when most businesses require better, evolving internet services. Today may represent a great buying opportunity for long-term investors.

Snowflake

Snowflake provides a cloud-based data platform, both domestically and abroad, which allows its users to store and translate valuable datasets. The “company’s platform offers Data Cloud, an ecosystem that enables customers to consolidate data into a single source of truth to drive meaningful business insights,” according to Yahoo Finance.

Despite its prevalence, there is absolutely no question as to whether or not Snowflake is overvalued. On the day of its IPO in 2020, Snowflake shot past everyone’s expectations and more than doubled in price. No more than a year removed from its IPO date, and Snowflake is still trading at a very expensive valuation. As a result, there’s room for Snowflake’s stock price to reign in a little over the short term. However, we aren’t looking for the best short-term stocks; we are looking for the best long-term stocks.

While Snowflake appears expensive, its potential justifies its hefty valuation. In a world where data is becoming its own currency, Snowflake offers the tools businesses need to capitalize on their most valuable asset. As Snowflake expands its operations to include businesses of every size, there’s a good bet it’ll be a great addition to any portfolio looking to realize long-term gains.  

Tips For Long-Term Stock Investing

The best long-term stocks won’t mean a thing to investors unless they are treated with care. Consequently, even good stocks can be ruined by a poor investment strategy. As a result, there are several tips long-term investors should heed to maximize their opportunities:

  • Add To Winners Investing in the best long-term stocks has nothing to do with quantity; it has everything to do with quality. Therefore, investors who have identified the stocks they are comfortable investing in for the long term should continue to add to them at the right price. Investors should build a portfolio of stocks (at least 10 to 15) to mitigate risk and concentration, but adding to winners is one of the best ways to strengthen a profitable long-term portfolio.

  • Trim Losers: Investors shouldn’t be quick to trim positions, but anytime a thesis busts should send up red flags. If the initial reason you invested in a stock no longer holds water, it may be time to sell some of your position. Do not take selling likely, and only sell if you are convinced the company no longer has the same promise that made you invest in it originally.

  • Keep A Long-Term Perspective: The best long-term stocks are made even better with equally impressive long-term strategies. Investors with long time horizons will want to keep a “1,000-foot” perspective and take a step back from intraday fluctuations. Ignore the ups and downs of daily or even weekly trends. Instead, look at what the stock does over long periods of time, and make sure the trend marches upwards gradually over time.

  • Invest In A Future You Want To See: Investing in the stock market is made better when it’s done with convictions. Simply put, it’s more fun to invest in things you know and believe in. Investing in a future you would like to see will provide forward-looking insight and ensure you stay invested in your own equities.

  • Do Nothing: Sometimes the hardest thing to do is nothing. However, investors who don’t act impulsively and stick with their convictions will make surprisingly few moves. Inaction, as it turns out, is one of the greatest tools of today’s greatest long-term investors.

Summary

The best long-term stocks to buy right now will vary from investor to investor. At the very least, there are countless foundation stocks new investors should at least consider adding to their new portfolios. However, different stocks complement different investment strategies. On the other hand, new investors should focus on stocks with a lot of growth potential, plenty of secular tailwinds, and minimal red flags. While nobody can predict the trajectory of specific stocks, those listed above should help build a solid foundation for any portfolio.


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FortuneBuilders is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”), or any state securities regulatory authority. The information presented is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing provided shall constitute financial, tax, legal, or accounting advice or individually tailored investment advice. This information is for educational purposes only is not meant to be a solicitation or recommendation to buy, sell, or hold any securities mentioned.