Forget Chasing Volume. Here’s the Most Active Stock I’d Actually Hold for 5 Years.
When I look at a list of the day’s most active stocks, I see the usual big-name tycoons like Nvidia, Tesla, Apple, Amazon, and Microsoft (NASDAQ: MSFT) near the top. But if I had to pick one stock I’d feel comfortable holding for the next five years, I’d choose Microsoft, and I’d choose it specifically because of what’s happening underneath all that daily trading activity, not because of the activity itself.
Microsoft trades an average of roughly 27 million shares a day, according to Yahoo! Finance. That’s real volume, but it’s a fraction of what moves through some of its most active peers. According to various stock trackers, Nvidia alone averages over 120 million shares daily. Tesla runs around 41 million. Apple sits near 55 million. All five of these stocks show up on the most active lists for a similar reason: they’re mega caps that sit inside nearly every major index fund and ETF, so any time money flows into or out of the S&P 500 or the Nasdaq, all five get swept along with it, Microsoft included. There’s nothing wrong with watching that volume. Most of it is just short-term money bouncing around a handful of familiar tickers.
When I ask myself what to actually hold, I want a company that can turn today’s trading noise into long-term cash flow. Microsoft is often near the top of the most active lists, yet the underlying business looks built for a five-year holding period, not a five-minute scalp.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.