Warren Buffett was successful in his investment career because he had the ability to spot wonderful businesses with durable competitive advantages and the discipline to hang on to them through the thick and thin for many years. If you want to get rich slowly, you’ll need to be disciplined too, because odds are, the stock will face numerous occasions where the general public is pessimistic and bearish on the stock that you’ve chosen to buy and hold for the long term.
What does long term mean anymore? It seems these days that investors are ready to sell a stock that they just bought a few weeks ago. The only person who’ll get rich from overactive trading are the brokers. (unless you’re an experienced trader, but that’s a whole other story!)
Holding for the long term used to mean holding for three years, five years, or even a decade and beyond. But today, long term for many investors probably means one year or even less! We live in an age where there’s a tonne of noise that may hurt an investor’s long-term returns if they react because of such noise. Successful investors know how to spot the difference between noise and meaningful news that may impact the original investment thesis.
One could argue that the rise of technology and its disruption to various industries is the reason for investors dumping their stocks early, but there are still businesses with wide moats, and these are the stocks that long-term investors should be focusing their efforts on.
Here are two solid Canadian stocks that you can buy now and comfortably hold for decades.
Toronto-Dominion Bank (TSX:TD)(NYSE:TD)
Canadian banks are fantastic long-term investments, and buying on weaknesses over the course of the long term is a great strategy to build your wealth over time. TD Bank is arguably one of the best of its breed with its strong U.S. presence and solid risk-management strategy.
TD Bank has stood the test of time, and over the next decade, you’ll likely enjoy huge capital gains to go with a potentially doubled dividend.
Worried about a market crash?
TD Bank will probably increase its dividend at a time when many other companies are cutting theirs. Once things go back to normal, TD Bank will probably be one of the first to lead the rebound.
Alimentation Couche Tard Inc. (TSX:ATD.B)
Couche Tard is a global convenience store consolidator whose founder, Alain Bouchard, has the vision to take over the convenience store world one acquisition at a time.
Unlike many other M&A companies, Couche Tard is focused on finding value and not just making deals for the sake of keeping short-term investors happy.
What’s the convenience store going to be like in a decade from now?
Couche Tard is continuously tinkering with its stores to meet the demands of its customers, and over the next decade, major changes could be in the cards. The convenience store of the future will likely have parking spots to charge your electric car and a place to sit down and relax with a coffee and meal in the meantime. Then when you’re done, pick up some snacks, milk, eggs, and hit the road again.
Oh, and you probably won’t have to line up to pay either since the transaction will be completed when you grab the item off the shelf.
That’s convenient, isn’t it?
Buy shares of Couche Tard as it takes over the convenience store space while it finds new ways to adapt to changing consumer demands.
Bottom line
The real challenge for investors will be to hang on to these wonderful stocks for at least five years. We live in an age where there will always be a reason to buy or sell. With these two gems I mentioned, you can buy now and just forget about them entirely.
Stay smart. Stay hungry. Stay Foolish.
