5 Surefire Stocks That Can Build Generational Wealth in 25 Years – The Motley Fool

It’s been a trying year for the investing community. Since hitting their respective all-time closing highs within the past seven months, the well-known Dow Jones Industrial Average, benchmark S&P 500, and growth-dependent Nasdaq Composite have lost 19%, 24%, and 34% of their value, as of June 16, 2022.

Although big declines in the stock market can be worrisome, historical data shows that buying during these dips is a genius move. Over long periods, every notable decline in the major U.S. indexes has eventually been wiped away by a bull market. The key to success, aside from buying stakes in innovative, high-quality businesses, is allowing time to work its magic.

Image source: Getty Images.

With equities significantly below their all-time highs, a number of innovative companies stand out as amazing values for patient investors. What follows are five surefire stocks that have the ability to build generation wealth over the next 25 years.

Intuitive Surgical

To begin with, robotic-assisted surgical system developer Intuitive Surgical (ISRG 0.72%) offers significant wealth-building potential for long-term investors thanks to its lasting competitive advantages.

When the first quarter came to a close, Intuitive Surgical had installed 6,920 of its da Vinci surgical systems in hospitals and surgical centers worldwide. This figure is many multiples higher than its next-closest competitor. But what’s far more important to recognize is that the cost of these systems, coupled with the training given to surgeons to operate them, makes it highly unlikely that customers would ever switch to a competitor. Da Vinci system buyers effectively become a long-term cash stream for the company.

Intuitive Surgical’s razor-and-blades operating model is its other big selling point. Although its surgical systems are costly, they’re intricate to build, and therefore produce only mediocre operating margins. As the installed base of da Vinci’s systems has grown, the percentage of sales from instruments sold with each procedure, as well as system servicing, has grown. These segments generate considerably higher operating margins and are what can propel Intuitive Surgical’s valuation much higher over the next quarter century.

Berkshire Hathaway

For more than 50 years, few investments have been more “surefire” than riding the coattails of billionaire investor Warren Buffett. Since becoming CEO of Berkshire Hathaway (BRK.A -0.20%)(BRK.B -0.18%) in 1965, the Oracle of Omaha has led his Class A shares (BRK.A) to an annualized return of 20.1%, through Dec. 31, 2021. On an aggregate basis, we’re talking about a return of 3,641,613%.

One of the biggest reasons …….

Source: https://www.fool.com/investing/2022/06/19/5-stocks-can-build-generational-wealth-in-25-years/