Stock investing has always been a roller coaster, but the past few years have been particularly tumultuous. From the soaring heights of 2021, driven by a pandemic-induced tech and retail buying frenzy, to the dramatic 33% plunge of the Nasdaq Composite in 2022 due to inflation-triggered sell-offs. Yet, 2023 marked a rebound, with the index surging by 43%, evidence of the market’s unpredictable yo-yo dynamics.
Despite what recent patterns might suggest, signs of easing inflation and corporate growth hint at breaking the cycle of volatility in 2024. Given the overall 21% rise in the Nasdaq Composite since 2021, adopting a long-term investment approach has never been more crucial. Among countless options, two standout stocks capture my unwavering loyalty: Costco Wholesale (NASDAQ: COST) and Amazon (NASDAQ: AMZN).
Costco: A Retail Juggernaut
Costco’s stellar performance over its major US competitors is notable, more than doubling in growth over five years. Its winning strategy? A unique business model focusing on membership fees that drive substantial earnings, with over $6 billion in profits in fiscal 2023 alone. Despite a high forward P/E ratio of 44, Costco’s sustained popularity and reliable growth make it a shining beacon for long-term investors.
Amazon: The Unstoppable Force
Amazon’s resilience is evident in its rapid recovery from a challenging 2022, with subsequent revenue growth and operating income surges. Its dominance is further secured by its promising prospects in the AI market, thanks to Amazon Web Services. For those seeking a stock that combines long-term growth with cutting-edge technological ambition, Amazon stands out as a compelling, never-sell asset.
While the allure of instant gains can be strong, the wisdom in holding steadfast to proven performers like Costco and Amazon is clear. Their blend of innovative business models, constant growth, and adaptability in the face of market turmoil solidifies their status as indispensable elements of any long-term investment portfolio.
