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There is no better vehicle for creating wealth than investing in stocks. They beat gold, bonds, real estate and of course cryptocurrencies. And while one asset class or another may outperform stocks in the short term, history proves that if you want to accumulate a lot of wealth, investing in stocks is the way to go.
A Deutsche Bank The research shows that over the past 100 years, stocks have outperformed gold by 5.6 percent, housing prices by 6.6 percent, Treasuries by 6.8 percent, and oil by 8.4 percent per year.
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In the year Stocks lost 0.9% only twice, in the 1930s, when the market lost 0.5% during the Great Depression, and in the 2000s, when a combination of the tech boom, 9/11 and the collapse of the financial and housing markets conspired to sink the market.
However, those periods of loss were followed by strong bull markets. In the year The 1940s saw an annualized return of 10.2%, including dividends, while the 2010s produced a 14% CAGR.
Technology stocks have been the driving force behind the market’s gains, as demand for consumer electronics and related products and services has driven the sector to outpace any other sector. So buying and holding tech stocks for the long term is the way to go. Following are the two that you should consider now.
Apple
Whether they are fans or not Apple (A.P.L -0.01%) Products, you have to admit, does a superior business. While it’s not changing the way consumers think about interacting with technology, it’s producing products with style, fit and finish that appeal to more customers in the ecosystem. And analysts constantly underestimate the power of that appeal, leading them to misrepresent the gadgets’ staying power.
Warren Buffett recognizes the brand’s outstanding reputation and ability to generate recurring revenue and long-term profits. I don’t recommend stockpiling Apple as half of your portfolio as Buffett did. Berkshire Hathawayis still the company that the investor cannot go wrong with for decades.
Revenues continued to rise, with second-quarter sales topping $83 billion, a record for the period, while product revenue rose 7% to $77.5 billion, and service revenue rose 17% to $20 billion, a record.
The iPhone, especially the Mac, iPad, Apple Watch, and Apple TV continue to grow in popularity. However, it is the service segment of the business that could be the future of the company as it is a fast growing segment. That makes Apple a stock to buy now and hold for decades.
Digital reality
A real estate investment trust (REIT) is not what you normally think of as a tech stock. However, because Digital Realty Trust (DLR 0.16%) Being the largest provider of data centers for cloud services and telecom service providers, this REIT easily fits the bill.
Data centers are considered the backbone of the Internet — the central nervous system for any device accessing the network, whether in the cloud or online. For speed and efficiency, data needs to be stored in a central repository, and data centers act as reliable warehouses for the servers and network devices that store the data.
Digital Realty has more than 300 data centers in 27 countries, representing approximately 37 million square feet of space. The industry has undergone significant consolidation, making the REIT one of only two remaining companies focused on the sector.
Data centers used to be just physical facilities, but they themselves exist in the cloud. Digital Realty Platform Digital Services provides a hybrid solution of cloud and brick-and-mortar storage options that a growing number of customers are using.
The REIT lowered its guidance from its core fund of operations for the full year by $0.05 to $6.75 to $6.85 per share, but that downward shift was driven solely by exchange rates.
Digital Realty customers love it Amazon And Microsoft Given their own respectable cloud services, they could be competitors down the road. But as more businesses generate growing amounts of data, demand for REITs’ specialized services is likely to keep pace. Global expansion makes Digital Rial a stock to own now and in the future.
John McKee, CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the Motley Fool’s board of directors. Rich Duprey has no position in the mentioned stocks. He has a position in the Motley Fool and recommends Amazon, Apple, Berkshire Hathaway (B shares), Digital Realty Trust and Microsoft. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 puts on Apple calls, short January 2023 $200 puts on Berkshire Hathaway (B shares). Short January 2023 calls on Berkshire Hathaway $265 calls (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
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