Robin Hood (NASDAQ:HOOD) has gained a reputation as a platform for traders and casual stock market watchers to buy and sell stocks, but it has evolved into much more than that. The company is quickly emerging as a leading retirement account brokerage and has done a solid job reinventing itself as a place to buy stocks and hold for the long term.
With that in mind, here are three of the most popular stocks on the Robinhood platform that might be worth a closer look for buy-and-hold investors.
An incredible company (well, two) with lots of room to grow
It’s hard to find a company that is a clear market leader in not one, but two sectors with strong growth potential, but that’s exactly what’s happening. Amazon.com (NASDAQ:AMZN) East. Amazon is known for being the leader in e-commerce, an area in which it is so dominant that it has a larger market share than its next 10 competitors. combined. E-commerce is still in its infancy, now accounting for about 15% of all retail sales in the United States.
The other side of the business is Amazon Web Services, or AWS, which is Amazon’s cloud services business. It is not as dominant as the e-commerce industry, but it is clearly ahead compared to the major competitors in the e-commerce industry. Microsoft (NASDAQ:MSFT) And Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL). Not only is it the most profitable aspect of Amazon’s business, but the global cloud computing market is expected to reach $2.5 trillion by 2032, or approximately five times its 2022 size.
If Amazon can simply maintain market share in its two core businesses, it could be a masterstroke for patient investors. And that’s not even considering the possibility of creating other new businesses. With the stock still nearly 20% below its all-time high, now could still be a great time to buy.
A turnaround story with tons of benefits
Unlike the other two actions covered in this discussion, Disney (NYSE:DIS) has significantly underperformed in 2023. Although returning CEO Bob Iger has made smart moves, investors remain largely pessimistic about the company’s ability to make streaming a profitable business in the long term, as well as other areas of concern.
However, this could provide an excellent entry point into this iconic sector for long-term investors. Losses in the streaming division are steadily reducing. Spending per guest at Disney parks is approximately 40% higher than comparable periods in 2019, and with a projected $60 billion in investment in experiences over the next decade, there could be many additional benefits to come.
Put your actions on autopilot
This might surprise investors who primarily view Robinhood as a trading platform, but the Vanguard S&P 500 ETF (NYSEMKT: VOL) is one of the most popular investments among platform users.
If you’re not familiar, it’s a exchange traded fund which tracks the benchmark S&P 500. In other words, it pools investors’ money and invests it in the 500 companies that make up the S&P 500, with the aim of matching its performance over time. This takes the guesswork out of stock investing and allows you to simply buy hundreds of stocks at a time. The Vanguard S&P 500 ETF has minimal fees (0.03% expense ratio), which will allow you to keep more of your gains.
Speaking of earnings, putting your investments on autopilot by simply buying an index fund may seem like a boring strategy, but you might be surprised how lucrative it can be. The S&P 500 has historically produced annualized returns of around 10% over several decades. If you were to invest $5,000 a year in an S&P index fund for 30 years, you could end up with more than $800,000.
Don’t expect a smooth ride
Note that the title says these are “buy and hold forever” stocks. While you don’t literally need to hold them forever, the bottom line is that I suggest all three of these as long-term investments. I have no idea what they will do over the next few weeks, months or even over the next year. Nobody does it. Even the S&P 500 index fund can rise or fall by 30% or more in a single year.
The point is, you need to view these stocks as long-term investments and treat them accordingly. Be prepared for some volatility along the way, but these three stocks should provide excellent long-term performance for patient investors.
Where to invest $1,000 now
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Matthieu Frankel, CFP® holds positions in Amazon, Vanguard S&P 500 ETF and Walt Disney. The Motley Fool holds positions in and recommends Alphabet, Amazon, Microsoft, Vanguard S&P 500 ETF, and Walt Disney. The Motley Fool has a disclosure policy.
3 Robinhood Stocks to Buy and Hold Forever was originally published by The Motley Fool