Have $1,000? Buy and Hold This Stock for 30 Years

Brookfield Infrastructure stock (TSX:BIP.UN)(NYSE:BIP) is a stock built for the long term. If you want to buy and hold, this is a compelling opportunity.

| More on:

If you’re willing to buy and hold, you don’t need much to build a small fortune. That’s because compound interest will do most of the work. Let’s look at a great example.

If you invest $1,000 and earn 10% annual returns, you’ll have $2,600 after a decade. But after two decades, you’ll have $6,700. And after three decades, more than $17,000.

The results are clear. The longer you keep your money invested, the faster it grow. In the first 10 years, you made a profit of $1,600. In the final 10 years, your profit was $10,300, all without investing another dime.

Accelerating growth is a major reason why stock market gurus like Warren Buffett extoll the virtues of long-term investing. Buy-and-hold investors are able to harness the magic of compound interest, a phenomenon that Albert Einstein reportedly described as the most powerful force on earth.

Want to capitalize on the advantages of buy-and-hold investing? Even if you have just $1,000 to invest, you can build long-term wealth with the following stock.

This is the stock

Brookfield Infrastructure (TSX:BIP.UN)(NYSE:BIP) stock is the perfect buy-and-hold stock. The company is targeting one of the greatest — and longest — opportunities in history: population growth.

But how exactly does a company benefit from population growth? By owning assets that directly benefit from the world getting bigger.

Brookfield owns a variety of infrastructure assets, from railroads and highways to wind farms and cellphone towers. A growing population almost always results in higher demand for these basic services.

In recent months, Brookfield has deployed more than $1.3 billion in capital. These new projects are located throughout the world, diversifying the company’s bets across a wide variety of markets.

It spent $600 million to acquire telecom towers in India and a data distribution facility in New Zealand, another $500 million to purchase a railroad in North America, and $150 million on a long-range natural gas pipeline.

Buying and holding is key

After going public more than a decade ago, Brookfield has shown that investing for the long term is the best way to build wealth. The results speak for themselves.

Since 2008, Brookfield’s stock has increased by more than 20% per year. When including dividends, the total annual return is closer to 25% per year. Buy and hold investors take note: this is a terrific stock to create financial independence.

Let’s re-run some of our numbers from before. Instead of assuming a 10% annual rate of return, let’s use Brookfield’s real-world result of 20%.

Earning 20% per year, $1,000 would become $6,200 after a decade, $38,000 after two decades, and $237,000 after three decades. That’s nearly a quarter-million dollars, built from a starting amount of only $1,000! This is the power of compound interest, which is only attainable through buy and hold investing.

How long can Brookfield continue to grow at these rates? After a decade of breakneck growth rates, the firm is still valued at just $20 billion. The global opportunity, meanwhile, is easily in the trillions.

With a proven strategy and long runway for growth, Brookfield Infrastructure is the ideal investment for buy-and-hold investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool recommends Brookfield Infrastructure Partners. Fool contributor Ryan Vanzo has no position in any stocks mentioned.

More on Dividend Stocks

ways to boost income
Dividend Stocks

1 Excellent TSX Dividend Stock, Down 25%, to Buy and Hold for the Long Term

Down 25% from all-time highs, Tourmaline Oil is a TSX dividend stock that offers you a tasty yield of 5%…

Read more »

Start line on the highway
Dividend Stocks

1 Incredibly Cheap Canadian Dividend-Growth Stock to Buy Now and Hold for Decades

CN Rail (TSX:CNR) stock is incredibly cheap, but should investors join insiders by buying the dip?

Read more »

bulb idea thinking
Dividend Stocks

Down 13%, This Magnificent Dividend Stock Is a Screaming Buy

Sometimes, a moderately discounted, safe dividend stock is better than heavily discounted stock, offering an unsustainably high yield.

Read more »

Canadian Dollars bills
Dividend Stocks

Invest $15,000 in This Dividend Stock, Create $5,710.08 in Passive Income

This dividend stock is the perfect option if you're an investor looking for growth, as well as passive income through…

Read more »

A Canada Pension Plan Statement of Contributions with a 100 dollar banknote and dollar coins.
Dividend Stocks

3 Compelling Reasons to Delay Taking CPP Benefits Until Age 70

You don't need to take CPP early if you are receiving large dividend payments from Fortis Inc (TSX:FTS) stock.

Read more »

A worker overlooks an oil refinery plant.
Dividend Stocks

Better Dividend Stock: TC Energy vs. Enbridge

TC Energy and Enbridge have enjoyed big rallies in 2024. Is one stock still cheap?

Read more »

Concept of multiple streams of income
Dividend Stocks

Got $10,000? Buy This Dividend Stock for $4,992.40 in Total Passive Income

Want almost $5,000 in annual passive income? Then you need a company bound for even more growth, with a dividend…

Read more »

Investor reading the newspaper
Dividend Stocks

Emerging Investment Trends to Watch for in 2025

Canadians must watch out for and be guided by emerging investment trends to ensure financial success in 2025.

Read more »