Want to own the stockmarket? Then think of it like home

Think of your shares like your home and you'll be on the road to riches.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

As investors making money is the best, but losing it hurts twice as much. In fact if our investments slip into the red it can be tempting to throw in the towel, the prospect of further losses too worrying to face. This is when emotional intelligence and self-discipline become the key to investing success. If we are buying quality companies for the long term we should not worry about short-term falls in value.

To illustrate the point consider that most of us equity investors will also own a home. If you are a homeowner do you obsessively try to check the value of your home on a daily basis? Phone the estate agent every few hours? Decide you have to sell the home tomorrow and head for the hills? Hopefully not. So think of your equity investments like your home, only with an income and without the mortgage.

Here are some potential equity investments that pay reasonable dividends with great long-term prospects.

SEEK Limited (ASX: SEK) is an internet business with some exceptional growth prospects. Seek.com is so ubiquitous it seems to have become part of the Australian vernacular and its looking to repeat that success in some mega-markets like Brazil and China. Those attempts are covered in this excellent article by Motley Fool contributor Claude Walker. Based on forecast earnings for FY 2014 the group trades on a forward price-earnings of about 27, that's not cheap, but given the growth runway it looks the kind of company long-term investors should own.

Ageing populations mean long-term investors should consider healthcare stocks and one with an exciting growth trajectory is ResMed Inc (ASX: RMD). Its products treat sleep disorders which are said to impact around 20% of the world's adult population. It has a truly global footprint, with 95% of revenues coming from outside Australia across all the major continents. In August it announced its 74th consecutive quarter of revenue growth, with strong management and the potential to expand margins there's almost no reason not to feel positive about this company's potential. It announces Q2 FY 2014 earnings on 23 January in the United States.

Another business geared to grow is Westfield Retail Trust (ASX: WRT). The Lowy family's Westfield shopping centres are popular cathedrals to the consumer age and investors who understand the twin Australian loves of shopping and property would identify it as a great investment. It pays an attractive dividend while trading on a reasonable price-earnings of about 15.

Foolish takeaway

Of course smart investors know there's occasionally times to take profits. If an investment's performance is making you repeatedly punch the air with delight as though you've just made a Test-match hundred at the MCG, it may be time to consider whether some irrational exuberance has acted on the stock's valuation. Otherwise, sticking with quality companies over the long term will put you on the highly-lucrative path to investing success.

Motley Fool contributor Tom Richardson owns shares in ResMed. You can find him on twitter @tommyr345

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »