Set It and Forget It: 2 Consumer Stocks to Hold for the Next 20 Years

When investing, it's easy to be impressed with stocks that deliver almost overnight gains. We might see this after an initial public offering -- for example, artificial intelligence (AI) chip company Cerebras Systems jumped 68% on its first day of trading last month. Or it might happen after a company announces important news. Viking Therapeutics saw its stock surge more than 100% in one trading session a couple of years ago after announcing positive clinical trial results for its weight loss drug candidate.

These happenings are great, but they represent a small part of the full investing picture. What truly may propel you to significant gains over time are the workhorses of your portfolio: stocks that have what it takes to deliver growth year after year. So, while it's fine to invest in promising young companies, it's extremely important to diversify across well-established players that may offer you this security -- whether you're a cautious or aggressive investor.

With this in mind, let's check out two of these "set it and forget it" stocks to hold for the next 20 years.

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1. Amazon

Amazon (NASDAQ: AMZN) is a giant in two growth industries: e-commerce and, through its Amazon Web Services (AWS) business, cloud computing. The company's global presence and solid fulfillment network, along with its Prime subscription service, offer it a strong moat or competitive advantage. It would be difficult for another company to unseat this powerhouse.

Amazon revamped its cost structure a few years ago -- taking steps such as making U.S. fulfillment regional rather than national. These steps should favor earnings growth down the road.

Meanwhile, AWS, which drives Amazon's overall profit, is benefiting from the AI boom. AWS is the world's biggest cloud services provider, and that offers the company a significant advantage -- customers are already present and may find it easy to launch their AI projects on a platform they know well. AWS has seen explosive growth, and this growth is across AI and non-AI projects, bringing the unit's annual revenue run rate to $150 billion.

All of this means Amazon may experience a new wave of growth in the years to come as the AI boom unfolds -- and offer investors an element of security thanks to the strengths of the businesses it's built over time.

2. Costco

Costco (NASDAQ: COST) is a consumer goods player that may perform well in any market environment. This is thanks to a business model that involves customer membership and access to rock-bottom prices. Since customers pay a fee to shop at Costco, they're likely to do as much shopping there as possible to amortize the cost -- and because prices are so low, they might stick around. Also, they may especially appreciate the deals during tough economic times.

These low prices mean Costco doesn't generate significant profit on sales of goods in its warehouses -- but that's OK. The company actually makes the lion's share of its profit through membership fees, as these are high-margin. And this also offers investors visibility on profit to come because Costco has a high membership renewal rate. For example, in the latest quarter, renewal rates in the U.S. and Canada topped 92%, while the worldwide rate came in at 89%. And the company has delivered a more than 90% renewal rate in the U.S. and Canada, its biggest market, quarter after quarter.

Costco has demonstrated its ability to increase earnings over time, and its commitment to expansion should support this moving forward. Costco, like Amazon, has an extensive presence worldwide -- with 928 stores globally after recent openings. And the company has a goal of opening more than 30 warehouses annually.

All of this makes Costco a company you can count on for strength in the near term and over the long run.

Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Costco Wholesale. The Motley Fool recommends Viking Therapeutics. The Motley Fool has a disclosure policy.