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I Would Put $5,000 Into These Stocks and Never Sell

Stefon Walters, The Motley Fool

5 min read

In This Article:

  • Amazon's diversified business and multiple revenue streams help ensure its long-term success.

  • The company uses its e-commerce business to fund innovative, higher-margin ventures.

  • Visa enjoys organic growth from its global payments system because of the network effect.

  • 10 stocks we like better than Amazon ›

My investing strategy has always been to buy a stock and plan to hold it for decades. In some cases, parting ways with a stock is needed if the business fundamentally changes for the worse, but for the most part, the real value comes over the long run.

Buying shares with the intention of holding them makes it easier to accept the inevitable ups and downs and focus on the long-term value you'll (ideally) receive from them. Letting time and compound earnings do the heavy lifting is one of the surest ways to build wealth in the stock market.

With $5,000 to invest (or any amount, really), I would put it into the following two companies and not look back. They operate in different industries, but are both poised to continue being great businesses for the long haul.

Someone sitting at a table with a laptop open while holding a smartphone.

Image source: Getty Images.

Amazon (NASDAQ: AMZN) has been one of the premier growth stocks over the past 20 years, up around 11,600% compared to the S&P 500's 400% gains over that span.

Although Amazon is undoubtedly known for its bustling e-commerce business, it has evolved into one of tech's most thorough conglomerates. The once-humble online bookseller has now ventured into e-commerce, cloud computing, media and entertainment, and advertising.

E-commerce continues to be a massive moneymaker, with its North America and International segments combining for over $126 billion in sales in the first quarter -- this includes subscription revenue, third-party sellers, and more.

For perspective, that's more than AT&T made in its last four quarters combined, and nearly double Amazon's total revenue just six years ago.

AMZN Revenue (Quarterly) Chart

AMZN Revenue (Quarterly) data by YCharts.

Having e-commerce as the engine that fuels other business ventures has allowed the company to invest heavily in high-growth segments and focus on innovation. The one that has benefited the most is its cloud service, Amazon Web Services (AWS).

AWS is the world's largest cloud platform and has been a major growth driver over the past decade. So much so that as a stand-alone company, AWS would easily be one of the top 100 revenue-generating public companies in the world.

It will continue to be Amazon's profit maker, but other segments, such as Amazon Prime, its various healthcare ventures, advertising, and its logistics network offer significant long-term upside.