Two problems with this approach, as it stands. First, you're suggesting picking stocks of individual companies, which is high risk for most people. ETFs or mutual funds are far less risky as long-term holdings. Second, if you pick individual stocks, you need to pay attention more than once every year or two. Even the most stable companies can take a huge hit in that time frame. Take Bank of America (BAC) for example. The second largest bank in the US, so clearly a large stable company. Had you bought it in Nov 2006 and held it for two years, you'd have lost 70%.