Market Overview

Podcast: Want To Be A Buy-And-Hold Investor? 3 Strategies


Welcome to Episode #84 of the Value Investor Podcast

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.

Do you want to be a buy and hold investor but just don't know where to start?

Buy-and-hold investing is one of the toughest types of investing to do because it calls for you to go against human nature for the instant big payout. After all, why do we play the lottery? We love the idea of becoming a millionaire overnight.

Buy-and-hold investing is slow and slogging. The payout may not come for several decades. Who has the guts to stick it out that long?

But for those investors who do have the guts, buy and hold investing can pay off with big returns.

3 Strategies For Buy-And-Hold Investing

1. Start Young. The longer you have to invest, the more you'll reap the rewards of compounding.

2. Diversify. Don't just buy one stock or even two. What if one of them is a Bear Stearns or a Wachovia? Spread out your risk.

3. Don't Get Fancy. You don't need the latest fad stock or biotech wonder. Stick with the basics. Buy companies that have solid fundamentals and strong brands.

Stocks To Consider Today For A Buy-And-Hold Portfolio

When you read about successful buy and hold investors, they're almost always invested in companies you've heard of.

Therefore, Tracey screened for big cap companies, with Zacks Ranks of #1 (Strong Buy), #2 (Buy) or #3 (Hold), which also had a value component of a P/E under the average of the S&P 500 which is about 17.5.

1. Diageo PLC DEO isn't technically a value stock. It has a forward P/E of 20. But it's expected to grow earnings by 18% in fiscal 2018. The maker of Guinness, Baileys and Johnnie Walker also pays a dividend currently yielding a healthy 2.6%.

2. Mylan N.V. MYL is dirt cheap. This drug company trades with a forward P/E of just 7.8. It also has earnings growth which is expected to be 17.1% in 2018.

3. Sony SNE is big in entertainment but is also moving into the self-driving car market as it's working on the sensors. It's a value stock, with a forward P/E of 13.1. Sony also pays a dividend, currently yielding 0.3%.

4. AbbVie ABBV is a rare growth and value stock. This biopharmaceutical has a forward P/E of 15.4 yet is expected to grow earnings by 33.9% in 2018. As an extra bonus, shareholders also get a dividend yielding 2.5%.

5. Walgreens Boots WBA has pulled back off its highs so it's cheaper than in January 2018. It trades with a forward P/E of 12.2. It's closing on the Rite Aid deal in 2018 which will add another 1600 stores. Earnings are expected to rise 13.5% in fiscal 2018.

What else should you know about being a buy and hold investor?

Find out in this week's podcast.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

  • (0:30) - Buy and Hold Value Investing
  • (3:30) - Examples of Successful Long Term Retail Investors
  • (7:35) - Buy and Hold Strategies
  • (11:45) - Tracey's Top Stock Picks
  • (17:45) - Episode Roundup: DEO, MYL, SNE, ABBV, WBA

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: contributor contributorsMedia Personal Finance Trading Ideas


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