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Is Square Stock a Solid Long Term Investment?


These days, the average investor probably feels like it's almost impossible to figure out which stocks to buy as a long-term investment option versus which ones to try and steer clear from. Regardless of the reason that you're thinking of buying a particular stock as a long-term investment, there are certain criteria that have to be met in order for it to be a successful endeavor. Obviously, you want something that is at least somewhat achievable as far as the current purchase price goes. Furthermore, you need options. If you're purchasing something as a long-term stock option, the last thing you want is something that's going to give you more headaches than anything else. Doing so would defeat the purpose of investing in a long-term investment in the first place. If that's the case, then what exactly are you supposed to do? After all, you need a long-term option that is going to provide you with the opportunity to make some serious income without adding to your stress levels each and every day. One option that you may want to start watching is Square (SQ). It’s a tech company that deals with web hosting and related services. That may not sound so impressive, but you are likely to be quite impressed by the way the stock has been performing. Furthermore, many analysts predict that its performance will continue to improve over the course of time. Since that is precisely why you invest in a long-term stock to begin with, it’s a good idea to look at this one more closely.

Things You Should Know

There are actually a number of things that you need to know about this particular company that might have a huge impact on whether or not you ultimately decide to purchase it as a long-term investment option. First and foremost, It's important to note that this company is the brainchild of none other than Twitter CEO Jack Dorsey. That might be enough to impress you right there. Clearly, Dorsey is an individual that knows what it takes to run a successful company. He's been doing it for years and the level of success that he has experienced is capable of rivaling that of virtually any other person who operates a similar corporation. In the business world, this means everything because competition is fierce, regardless of the type of company in question. Anyone who is able to survive for any length of time whatsoever is worth taking a second look at. Someone that is capable of ensuring that a company consistently performs at the level that is involved here is in another category altogether. Why does any of this matter to you with regard to this particular stock? It matters because Dorsey recently announced that he is stepping down as CEO of Twitter so that he can spend more time focusing on Square. At the moment, Square is actually more successful than Twitter and Dorsey knows it. As a result, he wants to spend his time growing the more successful company. At the same time, he's clearly demonstrating which company he believes in more because he's backing one while simultaneously removing himself from the other. It's worth noting that Square was already experiencing rapid growth and solid numbers, even before he announced his decision. The fact that he ultimately made the decision to go from one to the other should speak volumes. People like Dorsey don't exactly make business decisions lightly so when he chooses to do something like this, it's enough to make everyone stop and pay attention, whether they're particularly well-versed in the stock market or not.

Out of the Gate Running

It's worth noting that Square isn't exactly new on the scene, either. In fact, they've been traded publicly since 2015 and they've been a solid performer throughout that time. As a matter of fact, the stock has gone up 1,500% since the first day of trading. That's saying quite a lot. The point is driven home even more when you realize that this fact alone means that the stock in Square has easily outperformed Twitter stock time and again. If that's not enough to impress you, consider this fact. Currently, Square is only used in seven countries while PayPal is used in more than 200. Despite that fact, Square is actually on target to outperform PayPal. That's something that a lot of people thought would be virtually impossible for any company to pull off and Square has done it in a relatively short amount of time while still having this enormous potential for future growth. If they're already doing this well, imagine what that stock could potentially look like once Square becomes available in as many locations as are currently served by PayPal. The potential for that alone is enough to boggle the mind in the best way possible. If you're the person that invests in shares of Square stock today and then this sort of thing happens, you have the potential to see the type of payday that only exists in most people's dreams.

The Numbers Back Up the Hype

If you're still not convinced this might potentially be a good long-term investment option for you, you might want to know that over the course of the last month alone, this stock has more than doubled and its price per share. Prior to it reaching its current price, it was selling for a rather impressive $119 per share. Right now, you can purchase it for $253 per share. Granted, you're going to have to spend more money than you’d probably like in order to purchase enough shares to accomplish your long-term goals. That said, it might be well worth your efforts. Stock market experts widely agree that this is not a stock that's likely to crash. Although anything could potentially happen, that's always something that's reassuring to hear. It's even more so when several analysts across-the-board agree unanimously because it further reduces the risk that is involved with investing in that particular stock. While some stocks that could potentially offer a big payday are quite volatile, this one has been largely stable. There have been times when the stock has gone up and down, as is the case with every stock. However, it's largely been gains and increases across the board, something that you don't really see all that often with any type of stock, especially not one in the tech sector. It's also worth noting that according to many experts, the overall price of this stock is projected to continue to rise exponentially over the course of the next three to five years. In fact, they predict that it could be as much as a 300% increase in five years. If you are fortunate enough to have the means to invest $5,000 in the stock today, that could end up being quite the payday for you by the time you finally decide to sell it. The down side is that in order to potentially cash in on such a payday, you have to have enough money to invest in several shares so that you can get the most benefit for your dollar. You must also have patience. Sure, you could make the decision to sell off all of your stock within the next year, but you're not likely to make nearly as much money as you would make if you held onto it for the next five years. Not everyone wants a long-term investment that is quite so…long-term. Many people are looking for something that they can sell within the next 12 to 24 months. However, if you can wait for five years to sell it, the potential payday could be enough to make it very much worth your while, especially if you’ve invested significant amounts of money in the stock at today's prices.

Backing Up Your Decision

If you're like a lot of investors, you're still not completely convinced this is actually a good idea. After all, you have to use caution when it comes to deciding on how you plan on spending your money. You're not going to make anything in the stock market if you do so recklessly. Perhaps the following numbers will help you decide whether or not this is a stock for you. Within the next 12 months, many experts project that this particular stock will increase by $197 per share. That is quite an increase and it's one that is enough to get the attention of almost every investor out there. If you just so happen to be someone who is particularly skeptical, it might help you to know that the five-year projection for the stock has it going up by more than $535 per share. That's not a bad payday, to say the least. If you look at it in this context, you could buy five shares of the stock at today's prices and have well over $25,000 from those same five shares alone within the next five years, provided things go the way that most analysts believe they will go. As previously mentioned, it's not exactly cheap to buy shares if you really want to make money, but it could very well be worth it.

Solid Performance

Remember the example from before about spending $5,000 on shares at today's prices? Imagine how much you could potentially make if the stock does go up as predicted. When you consider the fact that you can purchase shares for less than half this amount today, it's easy to see how quickly you could make a great deal of money off of this one stock alone, not to mention everything else that’s in your portfolio. Provided you choose everything else as carefully as you're probably choosing this, you could end up having more than enough money for your child's college fund, your retirement, that trip you’ve always wanted to take and virtually anything else you want to do. At the very least, it's an exciting prospect. The thing is, you're not just sitting around dreaming about it. When you invest in solid long-term performers like this, you're actually doing something about it and all of those dreams could very well come true. It's also worth noting that even if you have to hold on to the stock for five years, that's really not that long in order to have enough money to set you up for the rest of your life. That doesn't necessarily mean that you should run out and buy every share of the stock that you can possibly purchase, even if that means that you're eating macaroni and cheese every day for the next three months. However, it does mean that it's something worth considering. As long as you don't go crazy and you keep everything within the constraints of what you can comfortably afford to spend right now, you're not putting yourself in any danger if things don't end up working out the way that you think they will. Granted, you shouldn't be putting a second mortgage on the house in order to get enough money to invest in something because if it blows up in your face, you have nowhere left to turn. However, there is certainly nothing wrong with investing in as many shares as you can afford with your discretionary income. It could mean that you live a life that is far different from the one you're living right now in just a few more years.

Allen Lee

Written by Allen Lee

Allen Lee is a Toronto-based freelance writer who studied business in school but has since turned to other pursuits. He spends more time than is perhaps wise with his eyes fixed on a screen either reading history books, keeping up with international news, or playing the latest releases on the Steam platform, which serve as the subject matter for much of his writing output. Currently, Lee is practicing the smidgen of Chinese that he picked up while visiting the Chinese mainland in hopes of someday being able to read certain historical texts in their original language.

Read more posts by Allen Lee

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