The stock market is great for long-term wealth. Although it's not the only strategy to develop a significant retirement nest egg, a diversified stock portfolio puts you in a good position to gain from global economic growth.
Besides a long holding time, significant profits require the appropriate stocks. You can do well by matching the market's 15% annual growth. However, adding a percentage point or two can make a big difference over decades.
1. Apple Apple's (NASDAQ: AAPL) sales fell to $383 billion from $394 billion in the previous fiscal year. Demand for electronic devices fell in 2023 after two years of strong growth, making iPhone and Mac buyers less enthused.
Apple remains a powerful company. The company's $383 billion revenue last year and $366 billion two years prior are comparable. Success in its quickly growing services division offset most Apple the iPhone and Mac franchises' weakness in 2023, which could steady growth. The start of fiscal 2025 saw growth resume, but it will take awhile to reach double digits.
A more financially impressive corporation is hard to find. Apple frequently earns over $100 billion in operating cash flow. Those resources allow management to aggressively repurchase stock, boosting per-share profitability. Even during sales slumps, investors should gain from that virtuous cycle.
2. Walmart (NYSE: WMT) has created numerous millionaires through its retailing dominance. That procedure may continue. The chain has a huge global sales base and significant valuation. Walmart won't suddenly quadruple or triple its $500 billion market cap.
You can still make good money keeping this retailer for decades. Rising client traffic drove 2023 sales growth. Walmart's success shows its ability to satisfy its core shoppers, who are increasingly looking for deals. Few competitors can match Walmart's low prices, which come from its vast scale.
Walmart's quest to become more than a brick-and-mortar retailer could benefit shareholders today. E-commerce sales reached $100 billion last year, up 20% from the year before. Walmart also benefits from digital advertising growth.
These gains are pushing the company's profit margin over investors' long-held 3% to 4%. If Walmart can sustain it, even a little increase here would boost its annual earnings. While waiting for this score, Walmart stockholders can receive quarterly dividends and automatically reinvest them in more shares. You'll boost long-term returns and accelerate portfolio wealth creation that way.
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