Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I still don't understand how that makes AMZN a short-term investment. A short-term investment is one you expect to out-perform temporarily, then under-perform longer-term. I see no evidence that is the case with AMZN, anymore so than other big tech companies. Even if 20% growth slows to 15% or 10% annually, that is still terrific growth and the stock can continue to be a great investment. The scenario you describe is that of the "mature company" where it continues to grow steadily into the future, but at lower rates than the past due to market over-saturation. That case has been made against Apple, since they've penetrated every possible market on the globe and everyone who wants an I-phone basically already owns one, so they are relying on replacements of existing phones rather than expansion into new countries/territories. AMZN is less single-product reliant, and is diversified into many industries. I feel they are well positioned to grow long into the future.
You are correct, it's clear the OP misunderstands things and/or is not clear in his goals. No single equity investment is designed as a "short-term investment" (except maybe a money market mutual fund). As we know, short-term vs. long-term in regards to equities is an investment strategy, not an investment choice.
I think in the OPs case he is simply speculating (always dangerous) that AMZN will go up in the short term...or they have the anticipated profit earmarked for another purpose. Either way he is trying to time the market, and we all know what happens with market timers. Clearly if he has short term goals he should pick an appropriate short term investment vehicle. Those aren't equities.
Has the OP come back? Hope he is learning something.
You are correct, it's clear the OP misunderstands things and/or is not clear in his goals. No single equity investment is designed as a "short-term investment" (except maybe a money market mutual fund). As we know, short-term vs. long-term in regards to equities is an investment strategy, not an investment choice.
I think in the OPs case he is simply speculating (always dangerous) that AMZN will go up in the short term...or they have the anticipated profit earmarked for another purpose. Either way he is trying to time the market, and we all know what happens with market timers. Clearly if he has short term goals he should pick an appropriate short term investment vehicle. Those aren't equities.
Has the OP come back? Hope he is learning something.
Perhaps by "short-term" he means 1-2 years, not the traditional definition. For me, a short-term investment is a matter of months and is really a trade. Short-term trading has pitfalls. First, you must time the market correctly. Second, it has tax disadvantages - you pay short-term capital gains taxes. I usually only buy stocks I plan on holding 2+ years. Sometimes, you have a bail out early. I had this happen with BA stock. So you take the short-term gain. But that shouldn't be the intention going into it.
I still don't understand how that makes AMZN a short-term investment. A short-term investment is one you expect to out-perform temporarily, then under-perform longer-term. I see no evidence that is the case with AMZN, anymore so than other big tech companies. Even if 20% growth slows to 15% or 10% annually, that is still terrific growth and the stock can continue to be a great investment. The scenario you describe is that of the "mature company" where it continues to grow steadily into the future, but at lower rates than the past due to market over-saturation.
Since we don’t know what “short-term” means to the OP I’m going to take a pass on that part.
With respect to Amazon, as I mentioned upthread it’s probably a decent hold, but its big growth days are over. Let’s look at trailing 5-year returns…
Amazon’s cumulative 5-year return is 101%
In comparison, an equal-weighted four-pack of crusty old retailers (Kroger, Wal-Mart, Target, Home Depot) had a price return of 102%. In addition they all also paid a dividend.
If you bought Amazon 20+ years ago you’re sitting pretty now, but to get outsized returns going forward you need to buy shares in smaller outfits. It’s not clear if that’s the OP’s objective, but from the short list of stocks mentioned that is my read.
I have a sum of $20,000 to $30,000 earmarked for investment in stocks and currently have accounts with both Fidelity and Ameritrade. My investment strategy involves a mix of short-term and long-term holdings. Could anyone offer insights or recommendations on promising stocks? I've been considering the following:
Short-term stocks:
TSLA (Tesla)
AMZN (Amazon)
Long-term stocks:
Microsoft (MSFT)
Any guidance or suggestions on these stocks or others would be greatly appreciated. Thank you in advance for your assistance.
"Short term" may mean you are going to do day trading & tend to lose money. Buy low & sell high but nobody knows what that means. Any gains pay tax at your income level FIT so makes no sense.
"Long Term to the IRS means stocks held 1 year or longer. Get favorable capital gain treatment. Ultimately pass on gains to heirs when inherited. Can get charity deduction.
Can't suggest individual stocks. Don't know what you ant out of them. Do you need dividends for income? Do you want high growth but high risk companies? Don't know how stocks fit into your portfolio. If you have S&P 500 fund may have no need to touch these stocks. You may already own some of them in the fund.
First of all, I would like to thank every single person that's responded.
Short Term = anywhere from a week to 6 months. Long Term = 1-2+ years.
I am looking for a mix of both ST (Short Term) and LT (Long Term). AMZN is definitely a roller coaster stock.
Does anyone have any ideas for ST and LT stocks? I am also considering the earlier suggestions of investing in Index Funds and/or Bonds.
Short term = trading, not investing. You are trying to market-time which will likely fail. AMZN is not really a roller-coaster. It is a momentum stock. It moves up and up for long periods. It also had a lengthy downtrend from 2021-2023, then reversed to an uptrend ever since. I am very confident that AMZN will be worth more in 1 year than it is today, but not very confident it will be worth more in 3 - 6 months than it is today. Most of the move in the stock price tends to occur in a short period of time. The likelihood you will capture this move in such a short period of time is unlikely.
A better example of a short-term stock would be Gamestop or AMC, although those are already crashing hard.
Since we don’t know what “short-term” means to the OP I’m going to take a pass on that part.
With respect to Amazon, as I mentioned upthread it’s probably a decent hold, but its big growth days are over. Let’s look at trailing 5-year returns…
Amazon’s cumulative 5-year return is 101%
In comparison, an equal-weighted four-pack of crusty old retailers (Kroger, Wal-Mart, Target, Home Depot) had a price return of 102%. In addition they all also paid a dividend.
If you bought Amazon 20+ years ago you’re sitting pretty now, but to get outsized returns going forward you need to buy shares in smaller outfits. It’s not clear if that’s the OP’s objective, but from the short list of stocks mentioned that is my read.
You keep saying the same thing. You are just speculating. How do you know the best days are behind it?The 5-year period you cited is skewed because AMZN had a 2-year bear market during that time (from 2021-2023). It just recently got back to the 2021 high and surpassed it. It has returned to phenomenal growth rates of pre-2021. Even if it doesn't maintain the old growth rates, all indications are it will continue to grow well above trend for the foreseeable future. I simply do not see 3%. AMZN is a highly diversified company with many revenue lines, unlike Apple or some others limited to a singular product. Also, its funny you mentioned dividends. AMZN is rolling around in cash and could announce a dividend at any moment. META did this recently.
You keep saying the same thing. You are just speculating. How do you know the best days are behind it?The 5-year period you cited is skewed because AMZN had a 2-year bear market during that time (from 2021-2023). It just recently got back to the 2021 high and surpassed it. It has returned to phenomenal growth rates of pre-2021. Even if it doesn't maintain the old growth rates, all indications are it will continue to grow well above trend for the foreseeable future. I simply do not see 3%. AMZN is a highly diversified company with many revenue lines, unlike Apple or some others limited to a singular product.
The OP came back and described his timeframe in more detail. To me it sounds like swing trading, which is not something that interests me, so my comments are a bit orthogonal to the original question.
I don't need any individual company to be diversified. I can diversify my account just fine by owning more stocks. GE was the quintessential diversified conglomerate, and look how that turned out. IMO... companies should focus on their core business and strive to do it better than any other company.
Nearly every stock suffered a bear market during the past 5 years, so AMZN is not unique in that regard.
Could these giant companies grow faster than the market? Sure, but they're not going to grow 10x or 20x over the next decade. That's all I meant when I said the best days are behind them.
Probably enough said about Amazon. I don't own it. I prefer the more pure plays such as Microsoft. If AWS were spun off as a separate company that would be interesting, though.
The OP came back and described his timeframe in more detail. To me it sounds like swing trading, which is not something that interests me, so my comments are a bit orthogonal to the original question.
I don't need any individual company to be diversified. I can diversify my account just fine by owning more stocks. GE was the quintessential diversified conglomerate, and look how that turned out. IMO... companies should focus on their core business and strive to do it better than any other company.
Nearly every stock suffered a bear market during the past 5 years, so AMZN is not unique in that regard.
Could these giant companies grow faster than the market? Sure, but they're not going to grow 10x or 20x over the next decade. That's all I meant when I said the best days are behind them.
Probably enough said about Amazon. I don't own it. I prefer the more pure plays such as Microsoft. If AWS were spun off as a separate company that would be interesting, though.
You may be right, but you could also be wrong. There's no way to know for sure what the future growth rates will be. By diversified, I meant that AMZN is well positioned in a variety of areas that are thriving currently. Cloud, AI, Retail/Consumer shopping, etc. They are not single-product reliant like Apple.
The same argument you make about AMZN slowing can be made for all other mega-cap tech stocks. Even NVDA which has exploded during the past year, you could say it will not maintain that growth level much longer. So what do you do? Do you sell these companies? They are such a large portion of the S&P500 that if they decline the overall market will decline.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
