In this article, we discuss 10 stocks to buy and hold for over 10 years according to Ray Dalio. If you want to see some more stocks in this selection, go directly to 5 Stocks to Buy and Hold for Over 10 Years According to Ray Dalio.
Ray Dalio, the billionaire chief of Bridgewater Associates, is one of the most prolific investors on Wall Street. Dalio, who has been in the equity game since he was a teenager, has grown his investment firm into one of the largest in the world. The equity portfolio of his fund was worth more than $17 billion at the end of the fourth quarter of 2021, with the top holdings in the consumer goods and healthcare sectors. Dalio is a big believer in long-term investment strategies and several of his top holdings have been in the Bridgewater portfolio, with minor breaks, since late 2010.
Dalio Bemoans Debt Creation, Warns of Crisis
Some of the top stocks in the portfolio of Bridgewater Associates at the end of December 2021 included The Procter & Gamble Company (NYSE:PG), Costco Wholesale Corporation (NASDAQ:COST), and Johnson & Johnson (NYSE:JNJ), among others discussed in detail below. Dalio has outlined some of the macro trends in the market through his new book titled Principles for Dealing with the Changing World Order. In his book, Dalio looks at debt creation, internal conflict, and US hegemony in detail to contextualize the present economic conditions.
Dalio warned that the amount of money printing and debt creation during the past few years with the interest rates at record lows had created an unprecedented situation where the Federal Reserve is in no position to raise interest rates enough to curb inflation, since a dramatic increase would hurt the financial markets and the economy. Dalio has also noted that the US dollar is not the force it once was, underlining in a recent interview that the US dollar was becoming a risky wealth storage device.
Our Methodology
The stocks were picked from the fourth quarter regulatory filings of Bridgewater Associates. The companies in which the fund has held a stake for ten years or more feature prominently.
Data from around 900 elite hedge funds tracked by Insider Monkey at the end of December 2021 was used to identify the number of hedge funds that hold stakes in each firm.
Ray Dalio of Bridgewater Associates
Stocks to Buy and Hold for Over 10 Years According to Ray Dalio
10. Target Corporation (NYSE:TGT)
Number of Hedge Fund Holders: 49
Target Corporation (NYSE:TGT) is a general merchandise retailer. Elite hedge funds hold bullish positions in the stock. Among the hedge funds being tracked by Insider Monkey, Florida-based GQG Partners is a leading shareholder in Target Corporation (NYSE:TGT), with 4.9 million shares worth more than $1.1 billion.
Latest data shows that Bridgewater Associates owned over 1 million shares of Target Corporation (NYSE:TGT) at the end of the fourth quarter of 2021 worth $242 million, representing 1.41% of the portfolio. The company has been in the Bridgewater portfolio since late 2010.
Just like The Procter & Gamble Company (NYSE:PG), Costco Wholesale Corporation (NASDAQ:COST), and Johnson & Johnson (NYSE:JNJ), Target Corporation (NYSE:TGT) is one of the stocks that elite investors are flocking to as inflation rises.
In its Q1 2021 investor letter, LRT Capital Management, an asset management firm, highlighted a few stocks and Target Corporation (NYSE:TGT) was one of them. Here is what the fund said:
“Target Corporation (NYSE:TGT), the Minneapolis-based retailer, continues to fire on all cylinders as the company has reported two quarters in a row of +20% revenue growth (5% traffic growth + 15% average basket size6 ), coupled with the strongest EBITDA margins in over four years. Target Corporation (NYSE:TGT) has successfully navigated the Covid-19 pandemic with online sales growing by 155% and 118% during Q3 2020 and Q4, respectively.
On March 2nd, Target Corporation (NYSE:TGT) reported another stellar quarter, with same-store sales growing by over 20%, and both earnings (+57% YoY) and revenues (+21% YoY) beating estimates. The shares are up 14.11% year-to-date. We believe the shares are a bargain 23x trailing and 20x forward earnings.”
9. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 53
Starbucks Corporation (NASDAQ:SBUX) is a specialty coffee firm. Latest filings show that Bridgewater Associates owned over 2.5 million shares of Starbucks Corporation (NASDAQ:SBUX) at the end of the fourth quarter of 2021 worth $299 million, representing 1.74% of the portfolio. The company has featured in the portfolio of the fund intermittently since the fourth quarter of 2010.
Starbucks Corporation (NASDAQ:SBUX) is one of the favorite beverage stocks on Wall Street. Among the hedge funds being tracked by Insider Monkey, London-based investment firm Fundsmith LLP is a leading shareholder in Starbucks Corporation (NASDAQ:SBUX), with 11.5 million shares worth more than $1.3 billion.
In its Q4 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Starbucks Corporation (NASDAQ:SBUX) was one of them. Here is what the fund said:
“We trimmed Starbucks Corporation (NASDAQ:SBUX) as a source of funding and to edge our weighting down. While the company has managed well through a difficult environment, we recognize that lockdowns are categorically challenging for this business. Starbucks Corporation (NASDAQ:SBUX) has a robust mobile order and pay platform fueled by a sophisticated app as well as a strong loyalty program, but this doesn’t alter the fact that the store-based retail business is important to Starbucks Corporation (NASDAQ:SBUX). As a result, we felt a smaller weighting was appropriate.”
8. Abbott Laboratories (NYSE:ABT)
Number of Hedge Fund Holders: 64
Abbott Laboratories (NYSE:ABT) develops and sells healthcare products. Major hedge funds hold large stakes in the company. Among the hedge funds being tracked by Insider Monkey, Ohio-based investment firm Diamond Hill Capital is a leading shareholder in Abbott Laboratories (NYSE:ABT), with 6 million shares worth more than $851 million.
Securities filings reveal that Bridgewater Associates owned over 2.1 million shares of the company at the end of December 2021 worth $307 million, representing 1.78% of the portfolio. The fund first bought a stake in the company during the fourth quarter of 2010.
In its Q2 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Abbott Laboratories (NYSE:ABT) was one of them. Here is what the fund said:
“Abbott Laboratories (NYSE:ABT) was the lone detractor in the quarter as the company preannounced that revenue and earnings this year would be below their previous guidance. We still expect the company to grow earnings more than 20% this year and continue double-digit earnings growth in the years to come. However, weakness in COVID-19 testing revenue is primarily responsible for the guidance reduction. Abbott is a leader in multiple types of COVID-19 diagnostic tests, and the largely successful vaccine rollout globally is leading to less COVID testing than the company expected. Two years ago, these tests obviously accounted for $0 in revenue but recently accounted for nearly $10 billion in annualized revenues as of the fourth quarter of 2020. We have expected COVID testing revenues to decline sequentially every quarter and eventually level out at less than $1 billion per year. We are not surprised by the current reality, but the decline has been more rapid than what management had expected.
Abbott Laboratories (NYSE:ABT) is a diversified medical products company with likely strong growth to come from its core businesses outside of COVID testing— our investment thesis was not dependent on pandemic related revenue. While the reduction in guidance is atypical for Abbott’s conversative management team, we do not believe it changes our long-term growth assumptions or the investment case in Abbott Laboratories (NYSE:ABT).”
7. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 62
Walmart Inc. (NYSE:WMT) owns and runs a chain of hypermarkets. According to the latest data, Bridgewater Associates owned more than 2.8 million shares of Walmart Inc. (NYSE:WMT) at the end of the fourth quarter of 2021 worth $409 million, representing 2.38% of the portfolio. Since the fourth quarter of 2010, with minor exceptions, Bridgewater has held a stake in the company.
Walmart Inc. (NYSE:WMT) remains a popular retail pick in the finance world. Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Walmart Inc. (NYSE:WMT), with 5 million shares worth more than $729 million.
6. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 57
McDonald’s Corporation (NYSE:MCD) owns and runs fast food restaurants. Top investment firms are bullish on the stock. At the end of the fourth quarter of 2021, 57 hedge funds in the database of Insider Monkey held stakes worth $2.2 billion in McDonald’s Corporation (NYSE:MCD), compared to 58 the preceding quarter worth $3.3 billion.
Regulatory filings indicate that Bridgewater Associates owned over 1.6 million shares of the company at the end of December 2021 worth $449 million, representing 2.61% of the portfolio. The company has featured in the Dalio portfolio since the first quarter of 2011.
Along with The Procter & Gamble Company (NYSE:PG), Costco Wholesale Corporation (NASDAQ:COST), and Johnson & Johnson (NYSE:JNJ), McDonald’s Corporation (NYSE:MCD) is one of the stocks that hedge funds are buying amid rising interest rates.
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Disclosure: None. 10 Stocks to Buy and Hold for Over 10 Years According to Ray Dalio is originally published on Insider Monkey.
