Are There Really Forever Stocks?

Running Length: 00:20:11

These are the stocks that some investors believe you can buy and hold without having to pay any attention to them until your retirement.

They are like “sure things”.

But are there really such stocks?

Do forever stocks actually exist?

Forever Stocks Gone Wrong

Back in the 1950s, 60s, and 70s, the automakers might have been forever stocks. GM (GM - Free Reportwas such a force in the US economy that it was believed whither GM, whither the US economy. “As GM goes, so goes the nation”.  

But when was the last time you heard that about GM or any automaker?

The automakers aren’t what they used to be. GM even had to go IPO, again, in 2011. Since that IPO it is up just 3.2% versus 161% for the S&P 500.

Technology Stocks as Forever Stocks

But if you’re not buying automakers, what about technology companies? Surely, in this hot sector, there are “forever” stocks, which you can buy and hold for decades without any worries.

Apple (AAPL - Free Reportseems like a sure thing. Shares are up 64% in 2019 alone. What could possibly go wrong?

But in the 1990s, Apple was just 30 days away from bankruptcy before it was bailed out by Microsoft (MSFT - Free Reportwhich loaned it $150 million.

Forever Stocks in Old Economy Industries

Maybe it’s best to look for forever stocks among those who have been in the trenches for a hundred years or more and have already beaten their competitors.

One such company is paint giant Sherwin Williams (SHW - Free Report). From Jan 3, 2000, to Nov 1, 2019, nearly 20 years, the shares have soared 3,208%.

During that same time period, Microsoft, a tech darling, was up just 209%.

But if you’re concerned that you will not “pick” your forever stock correctly, there are always the indexes.

Vanguard’s S&P 500 ETF (VOO - Free Reporthas an expense ratio of just 0.03%. From Jan 3, 2000, to Nov 1, 2019, it is up 121%.

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Disclaimer: Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the  more

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