If I had to buy one stock and hold it forever, which one would I buy? This is a question I'm often asked. In practice, it is not really such a good idea since you need to diversify your portfolio but let's just assume you were forced to.
You will need the following aspects in that company:
1. Sustainability - The company should be around in 50 years. Food companies look like good candidates but consumer habits are changing and the best way to protect ourselves is to invest in a diversified company but that would limit growth and we're unlikely to beat the S&P 500 $SPX500 over the long-term.
2. Growth - We will need a stock with some technology that will grow. Since we're looking at diversification, I can think of Apple $AAPL and Microsoft $MSFT . Two years ago, I would have chosen Apple but the problem is that now it is expensive.
3. Cheap - The stock has also to be cheap so that we can maximize profits over the long-term.
All the companies we talked about will need financing and that's why the stock which I will buy and hold forever is JPMorgan Chase $JPM , the largest bank in America.
JPMorgan Chase business has been growing in recent years and they have much better margins, ROA, ROE than the competitors. This is not something easy to do in this low interest rate environment. JPMorgan Chase achieved that by expanding its credit card business and expanding it retail business in the US and investment banking business internationally. It can still expand and grow.
JPMorgan Chase also has a great management as CEO Jamie Dimon has been named the best CEO in America by his peers in a Fortune Magazine poll several years in a row. Even when Jamie Dimon retires, the company culture will still be here and I believe that the company will keep growing.
I always take the opportunity to buy JPMorgan Chase stocks and this is the only stock I bought in all the 5 years that I've been investing.
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