3 Reasons to Buy and Hold Amazon Stock Forever
While it can be tempting to buy and sell stocks quickly, long-term investing is the key to sustainable returns in the market. This strategy helps investors avoid stock price volatility while giving time for good companies to reach their full potential. Let's explore three reasons why Amazon (NASDAQ: AMZN) could overcome its near-term challenges and become a great long-term bet.
While Amazon's stock has recovered somewhat in 2023, shares are still down by 37% compared to an all-time high of $186 reached in late 2021. Back then, investors made many assumptions about the company that are no longer in play. For example, many believed that pandemic-era growth trends would continue, and challenges like inflation and rising rates would not be as damaging to consumer purchasing power as they turned out to be.
Overall, people seemed to have forgotten that Amazon is cyclical -- its business performance generally tracks the economic cycle of expansion and recession. When the economy is strong, customers spend more money on its e-commerce platform, while clients are more willing to undertake costs associated with transitioning to AWS cloud services. But when the economy is weak, these dynamics reverse.
Source Fool.com
