Three Evergreen Financial Stocks to Invest $3,000 and Hold Forever

Investing in the stock market can seem daunting, especially when you have a limited amount of money, such as $3,000. However, thanks to commission-free trading and the ability to buy fractional shares, it’s easier than ever to get started. With this amount, focusing on a few reliable companies can lead to solid long-term returns. This article discusses three promising financial stocks: American Express, SoFi Technologies, and Berkshire Hathaway. Each of these has unique advantages and the potential for long-term growth.

American Express

American Express, often referred to as Amex, distinguishes itself from companies like Visa and Mastercard with its unique business strategy. Unlike Visa and Mastercard, which are payment processors that do not issue cards directly, American Express operates its own banking system and issues its own credit cards. This allows Amex to cater to higher-income and lower-risk customers. While its market share is smaller compared to Visa and Mastercard, this selective strategy helps maintain its profitability.

Furthermore, American Express is somewhat insulated from changes in interest rates. Although higher interest rates can affect consumer spending negatively, they can also enhance the bank's earnings. This balanced model makes Amex an attractive choice for investors. Currently, analysts project that the company’s revenue will grow at an annual rate of 8% from 2024 to 2027, with earnings per share expected to rise at an annual rate of 13%. At 18 times this year's earnings and a forward yield of 1.2%, Amex appears to be a reasonable investment option.

SoFi Technologies

SoFi Technologies, short for Social Finance, aims to revolutionize the banking industry with its fully digital financial services. The company offers various products, including personal loans, credit cards, and investment services, all under one platform. In 2022, SoFi became a fully chartered bank, further solidifying its presence in the financial landscape.

SoFi's digital approach has attracted a younger demographic, resulting in rapid growth in its user base. The number of members has surged from 2.52 million in 2020 to over 10 million in 2024. Additionally, its payment-processing segment, Galileo, supports 168 million accounts, showcasing its robust growth potential. After facing challenges like a federal pause on student loans and a decrease in loans due to rising interest rates, SoFi's outlook is improving as these issues subside. Analysts predict revenue growth of around 19% and earnings per share growth of about 24% from 2024 to 2027. While it may seem pricey at 49 times this year's earnings, it positions itself more favorably at 14 times forward earnings before interest, taxes, depreciation, and amortization (EBITDA).

Berkshire Hathaway

Berkshire Hathaway, headed by legendary investor Warren Buffett, is another excellent option for long-term investment. The company diversifies its portfolio by owning various firms, particularly in the insurance sector, including notable names like GEICO. Its stock portfolio also includes significant investments in companies like American Express, Capital One, and Bank of America.

This vast and varied portfolio has made Berkshire Hathaway a dependable long-term investment, consistently outperforming the S&P 500 since Buffett took control in 1965. By focusing on "operating earnings," which exclude volatile capital market fluctuations, Berkshire has achieved a compound annual growth rate of 16% over the past few decades. This growth is expected to continue under Buffett’s legacy and investment strategies.

Overall, if you are starting with $3,000, consider allocating your funds among these three companies. They all exhibit strong long-term growth potential and could provide substantial returns over time!

stocks, investment, finance