Forever Stocks

The investment strategy of "buy and hold" has lost favor of late. However, for long-term investing, there are still strong stocks that, I believe, deserve the title "forever" stocks. A forever stock is simply a stock that you should buy and hold forever. While these stocks may experience periodic, even annual downturns, in the very long term they have consistently increased in value and returned dividends. As a result they are strong additions to portfolios for those building a nest egg for retirement or paying for college educations 15 to 20 years out.

Prospects for forever stock purchases are companies strongly inclined to be resilient regardless of the economic situation. Dividend history is also an important factor. Early in your savings plan, it is prudent to reinvest dividends, allowing them to increase the growth of the overall stock portfolio value. Later in life, if necessary, the stock principal can be held while dividends are collected as supplemental retirement income. While each individual investor should investigate and evaluate stocks based on their own tolerance for risk and the timing of their own financial needs.

Source: Associated Content

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