3 Great Stocks to Buy With $1,000 and Hold for the Long Term

Investing in the stock market is a smart choice that, when combined with discipline and patience, can result in wealth and financial independence.

Effective investors understand that a diversified portfolio filled with quality stocks is essential. By distributing your investments among various reputable companies that have competitive advantages, you can take advantage of economic growth and benefit from the power of compounding over time.

Here are three outstanding stocks to help you begin building your portfolio for long-term success.

Progressive

The insurance sector is often underestimated, as it might seem outdated and mundane. Yet, one company that stands out for its constant innovation and exceptional underwriting is Progressive (PGR 1.53%).

Currently, Progressive ranks as the second-largest auto insurer in the United States, just behind State Farm. For many years, Progressive has demonstrated solid underwriting in a competitive insurance landscape, rewarding its investors significantly. For instance, if you had invested $10,000 in Progressive 30 years ago, that amount would now be worth over $1.7 million!

The company is dedicated to maintaining a consistent underwriting profit of at least $4 for every $100 in premiums charged. This commitment has led Progressive to adopt new technologies early on, such as telematics—where policies are priced based on drivers' habits rather than traditional demographics. This strategy helps the company offer personalized rates that attract lower-risk drivers.

This focus on profitability in underwriting is crucial for Progressive's long-term viability. Also, because insurance products are always needed, Progressive can grow in line with the economy. The firm also possesses pricing power, allowing it to raise premiums in response to rising costs during inflationary periods. For steady long-term growth, owning shares in Progressive is an excellent choice.

Berkshire Hathaway

Berkshire Hathaway (BRK.A 1.90%) (BRK.B 2.05%) shares some similarities with Progressive. One of the many private companies owned by Berkshire is GEICO, which they acquired in 1996. GEICO is now the third-largest auto insurer in the U.S. and has made great strides in its underwriting processes to compete with Progressive.

Berkshire also owns a variety of other insurance companies, such as National Indemnity, General Re, and Alleghany, which collectively contributed $22.7 billion of its $47.4 billion in operating earnings last year.

Moreover, Berkshire has holdings in numerous industries, including railroads, consumer goods, energy, and manufacturing, all of which have strong growth potential alongside the economy. With $334 billion available in investable capital, Berkshire is also benefiting from the significant interest it earns on safe U.S. Treasuries while waiting for favorable investment opportunities.

Berkshire Hathaway offers exposure to the broader economy through its various holdings. These can expand as the economy grows while also offering stability during economic fluctuations. Berkshire's strong financial position and patient investment strategy make it an excellent option for long-term investors.

Tradeweb Markets

Tradeweb Markets (TW 1.61%) revolutionized U.S. Treasury trading by introducing technology to the marketplace in the 1990s. It has since become a preferred platform for large institutional investors looking to trade Treasuries alongside other financial instruments like stocks, bonds, options, and ETFs.

The market for Treasuries and corporate bonds has seen significant growth. Treasury bills and bonds are highly liquid and active financial instruments heavily traded by banks, insurance firms, and other investment professionals. As the national debt in the U.S. continues to rise, the issuance of Treasuries plays a critical role in government funding.

Tradeweb has effectively developed partnerships and increased its market share across its product category. For example, between 2019 and now, its share in the U.S. Treasury market has grown from 12.3% to 23.4%. During that same period, its stake in the U.S. investment-grade bond market has doubled to 26.2%, and its share in the high-yield bond market has nearly tripled to 10%.

As markets become more active, Tradeweb continues to expand its offerings. With global debt on the rise, Tradeweb is well-positioned for growth, making it another solid choice for investors today.

Note: The authors of this article may hold positions in some of the mentioned companies. Always conduct your own research before making any investment decisions.

Investing, Stocks, Growth