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Welcome to Episode #344 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey went solo to talk about what it’s like to be a long-term investor. Think it’s easy just because the stock market was hot in 2020 and 2021? Think again. 2022’s sell-off threw a bucket of water on many investors.
But you don’t need to throw in the towel just because of some bear market corrections. However, you likely will have to adjust expectations.
Bull markets make it seem so easy to make money. Bear markets take a dedicated, and smart, investor willing to have a lot of patience.
Do You Have What it Takes to Be a Long-Term Investor?
Warren Buffett’s Berkshire Hathaway owns a lot of shares of Bank of America. It’s the second largest position in his equity portfolio.
Berkshire originally bought shares of Bank of America in the third quarter of 2017. That’s going on 6 years now. Using the last trading day of the third quarter of 2017, Sep 29, 2017, as a purchase date, the shares are up just 36% over that time.
Yet Buffett continues to hold the massive position in Bank of America but he’s collecting a dividend yielding 2.6% while he waits.
Have you been able to hold on over the years in Bank of America?
Microsoft is not in Buffett’s portfolio, but I’m sure he wishes it was. During the same time period that he’s owned Bank of America, Microsoft shares have soared 221%.
The FANGMAN stocks have made investing seem “easy” the last few years.
Microsoft also pays a dividend but it’s yielding just 1.1% now.
Chevron is also now in Berkshire Hathaway’s portfolio but it is a more recent addition, having been added in the fourth quarter of 2020.
It is now Berkshire’s third largest equity position, at 8% of the portfolio. Last year, Buffett added more shares to his position.
Chevron’s earnings more than doubled in 2022 from 2021 but are expected to fall 16% in 2023 as oil and natural gas prices fall from the recent highs.
Shares of Chevron are up 50.8% over the same period as Bank of America, as of Sep 29, 2017, which is under that of the S&P 500 in that time period of 58%.
Have you been an oil investor over the last 5 or 10 years in companies like Chevron? Were you able to stick it out?
2021 winners were 2022 losers as growth stocks sold off last year. One of those was Marathon Digital, which mines cryptocurrencies and supports blockchain.
Marathon Digital was down 71% over the last year, making it difficult for long-term investors to stick it out. But traders had some luck in the last month, as shares of Marathon Digital rose 112%.
Analysts expect Marathon Digital to make $0.55 in 2023 after analysts expect it to lose $2.69 in 2022. It trades at 14x forward earnings.
Should long-term investors dive into some beaten down growth stocks like Marathon Digital?
What Else Do You Need to Know Long-Term Investing in 2023?
Listen to this week’s podcast to find out.
[In full disclosure, Tracey owns shares of MSFT in her personal portfolio. She has owned it for 4 years.]
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Advice for Long-Term Stock Investors
Welcome to Episode #344 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey went solo to talk about what it’s like to be a long-term investor. Think it’s easy just because the stock market was hot in 2020 and 2021? Think again. 2022’s sell-off threw a bucket of water on many investors.
But you don’t need to throw in the towel just because of some bear market corrections. However, you likely will have to adjust expectations.
Bull markets make it seem so easy to make money. Bear markets take a dedicated, and smart, investor willing to have a lot of patience.
Do You Have What it Takes to Be a Long-Term Investor?
1. Bank of America (BAC - Free Report)
Warren Buffett’s Berkshire Hathaway owns a lot of shares of Bank of America. It’s the second largest position in his equity portfolio.
Berkshire originally bought shares of Bank of America in the third quarter of 2017. That’s going on 6 years now. Using the last trading day of the third quarter of 2017, Sep 29, 2017, as a purchase date, the shares are up just 36% over that time.
Yet Buffett continues to hold the massive position in Bank of America but he’s collecting a dividend yielding 2.6% while he waits.
Have you been able to hold on over the years in Bank of America?
2. Microsoft (MSFT - Free Report)
Microsoft is not in Buffett’s portfolio, but I’m sure he wishes it was. During the same time period that he’s owned Bank of America, Microsoft shares have soared 221%.
The FANGMAN stocks have made investing seem “easy” the last few years.
Microsoft also pays a dividend but it’s yielding just 1.1% now.
Should investors be looking at Microsoft in 2023?
3. Chevron (CVX - Free Report)
Chevron is also now in Berkshire Hathaway’s portfolio but it is a more recent addition, having been added in the fourth quarter of 2020.
It is now Berkshire’s third largest equity position, at 8% of the portfolio. Last year, Buffett added more shares to his position.
Chevron’s earnings more than doubled in 2022 from 2021 but are expected to fall 16% in 2023 as oil and natural gas prices fall from the recent highs.
Shares of Chevron are up 50.8% over the same period as Bank of America, as of Sep 29, 2017, which is under that of the S&P 500 in that time period of 58%.
Have you been an oil investor over the last 5 or 10 years in companies like Chevron? Were you able to stick it out?
4. Merck (MRK - Free Report)
Merck gained 36% last year but the prior years weren’t as easy. Merck shares lagged in the last decade, but one good year makes up for a lot.
Merck has gained 81.3% over the same time period as Bank of America has been in Buffett’s portfolio. That’s better than the S&P 500 at 58%.
Merck also pays a dividend, yielding 2.6%.
Merck is breaking out in 2023. Have you stuck around long enough to see it?
5. Marathon Digital (MARA - Free Report)
2021 winners were 2022 losers as growth stocks sold off last year. One of those was Marathon Digital, which mines cryptocurrencies and supports blockchain.
Marathon Digital was down 71% over the last year, making it difficult for long-term investors to stick it out. But traders had some luck in the last month, as shares of Marathon Digital rose 112%.
Analysts expect Marathon Digital to make $0.55 in 2023 after analysts expect it to lose $2.69 in 2022. It trades at 14x forward earnings.
Should long-term investors dive into some beaten down growth stocks like Marathon Digital?
What Else Do You Need to Know Long-Term Investing in 2023?
Listen to this week’s podcast to find out.
[In full disclosure, Tracey owns shares of MSFT in her personal portfolio. She has owned it for 4 years.]