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Why making big money in the share market is much easier than you think

Financial news wires are reporting that investment analysts at U.S. financial services leader Citigroup have put a bullish $148 price target on shares in Australian healthcare leader CSL Limited (ASX: CSL).

I have written perhaps 100 times on this website over the past 4 years as to why investors should look to stuff their shares portfolios full of the ASX’s best healthcare companies.

And not for nothing either.

Below are the past five-year returns for the four leading healthcare companies I have recommended smart investors buy over and over since 2013.

  • CSL shares up 250% over the past 5 years.
  • Cochlear Limited (ASX: COH) shares up 112% over the past 5 years.
  • ResMed Inc. (CHESS) (ASX: RMD) up 205% over the past 5 years.
  • Ramsay Health Care Limited (ASX: RHC) up 257% over the past 5 years.

The reason I have been rather trite in recommending these companies is that in all honesty the local share market does not possess that many high-quality companies with wide earnings moats to support strong long-term profit growth outlooks.

The four companies above possess these characteristics in my opinion and it’s no surprise that their share prices have followed their earnings and dividend growth higher over time.

Their strong free cash flows have also allowed CSL and ResMed to conduct share buybacks that are naturally supportive to earnings per share growth.

Experience has shown myself and others that when it comes to investing it pays to forget about focusing on what might change in the years ahead to focus on what won’t change.

For starters it’s much easier that way and is likely to lead you to the best investment ideas in the healthcare sector, while avoiding wealth-destroying companies in other sectors that are long on promise, but woefully short on delivery.

You don’t need to be a whiz-kid at Citigroup then to realise that companies like CSL with powerful tailwinds, excellent management, wide moats, and shareholder focused capital management policies are likely to produce good returns over the long term. Again, I would suggest smart investors look to buy into these companies over the five years ahead when their valuations come into reasonable territories.

If you want to switch off the noise to find other simple ideas to get rich in the share market why not read about 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tom Richardson owns shares of Cochlear Ltd., CSL Ltd., Ramsay Health Care Limited, and ResMed Inc.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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