If you can look past the doomsayers and daily volatility, it's easy to see why the sharemarket is the best driver of your wealth over the long term.
In fact, from January 1900 to 2012 the Australian stock market achieved an average yearly return of 11.8%.
That would've turned $1 (with profits reinvested) into over $280,657. Alternatively, cash accounts would've turned $1 into just $204!
Now, it's obvious, not many of us are going to invest (or live) for 100 years but, then again, not many of us are going to put $1 into shares, either.
And no doubt it would be great to earn 11.8% year-in, year-out for decades. It's an impressive return by anyone's measure.
However it's important to note that many investors fail to beat the market because they lose their temperament, are impatient and do not make the time to research and follow their favourite companies.
So if you are new to the stock market it's important to diversify. That is, buying into a variety of companies across different industries and geographies.
It's also a good idea to have a balance of dividend and growth stocks as well as mixture of mid-cap stocks.
So with that in mind, here are four great companies to place on your watchlist.
Dividends – Telstra Corporation Ltd (ASX: TLS)
Telstra pays one of the most reliable dividends on the market. Currently yielding 4.7% with 100% franking Telstra is the ideal income stock because it has excellent free cash flows and dominant business lines, making it one of the "safest" stocks in the S&P/ASX 200 (ASX: XJO) (INDEX: ^AXJO).
Growth – Cash Converters International Ltd (ASX: CCV)
Cash Converters is the leading dealer of second-hands goods in Australia. However its short-term payday loans and automotive financing businesses are where Cash Converters' greatest potential lies. With an acquisitive and organic growth strategy in Australia, New Zealand and other international locations, it's certainly one to watch.
Value – Village Roadshow Ltd (ASX: VRL)
Village Roadshow pays a juicy dividend and has exposure to a number of different geographical and industry markets. Its revenues stem from theme park ownership (think Wet'n'Wild, Outback Spectacular, Sea World and Movie World), film distribution and cinemas. At today's prices it looks cheap.
Mid-Cap – Transurban Group (ASX: TCL)
Transurban is a toll road operator behind names like Hills M2, Lane Cove Tunnel, Citylink and a handful of operations in Virginia, USA. Along with Telstra, it has one of the most reliable business models available on the market. It currently yields 4%.
