Forever Stocks to Buy and Hold

The investment strategy of "buy and hold" has lost favor of late. However, for long-term investing, there are still strong stocks that, I believe, deserve the title "forever" stocks. A forever stock is simply a stock that you should buy and hold forever. While these stocks may experience periodic, even annual downturns, in the very long term they have consistently increased in value and returned dividends. As a result they are strong additions to portfolios for those building a nest egg for retirement or paying for college educations 15 to 20 years out.

Prospects for forever stock purchases are companies strongly inclined to be resilient regardless of the economic situation. Dividend history is also an important factor. Early in your savings plan, it is prudent to reinvest dividends, allowing them to increase the growth of the overall stock portfolio value. Later in life, if necessary, the stock principal can be held while dividends are collected as supplemental retirement income.

While each individual investor should investigate and evaluate stocks based on their own tolerance for risk and the timing of their own financial needs, here are my personal favorites to hold as forever stocks in a portfolio.

McDonald's (MCD)

First on my list is McDonald's, which, against any and all conventional wisdom for diversification, occupies just over 50% of my own stock portfolio. While no stock is truly recession-proof, McDonald's has certainly proved itself recession resistant. Not only has McDonald's continued to run successful American operations, its holds huge potential for expansion in Asian and Latin American markets. New healthy changes to the McDonald's menu will help it weather the anti-fast food/obesity storm.

Proctor & Gamble (PG)

Proctor & Gamble's famous brands include Pampers, Tide, Folgers, Gillette, and my personal favorite, Clairol. Regardless of how bad the economy tanks, the need for these consumer products continues.

Nestlé (Nestle SA)

A Swiss multinational corporation, Nestlé products line the shelves of nearly every grocery and discount store across America. In addition to Nescafe, Nestea, and its popular chocolate products, Nestlé also owns Carnation, Perrier, Dreyer's/Edie's, and Gerber, all staples in many American households.

Coca Cola (KO)

Granted I may be swayed to recommend this stock based upon my own personal consumption of Diet Coke, but there are other, legitimate reasons for including the soft drink conglomerate on this list. Coca Cola has a consistent performance record. With its 2010 4^th quarter purchase of Coca Cola Enterprises, the company is now also in control of its bottling and distribution lines in North America. Don't dismiss brand recognition and the company's global market appeal in consideration of this stock.

Chevron (CVX)

Despite efforts to reduce American dependency on oil and petroleum-related products, gasoline is going to be in demand into the foreseeable future. Just a couple of years ago, I passed on purchasing Chevron at $64 per share, falsely believing the jump in oil prices was temporary. The days of cheap gas are over but our need to get around and Americans' love for their personal automobiles remains strong. The stock is currently selling at over $90 per share.

There is risk in any type of investment. Potential investors should analyze all information available and be thoroughly aware of all risks before making any monetary decision.

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