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3 reasons to be an ASX bull

Not that you’d know it, given the doom and gloom that pervades the mainstream media, once again, Australia is the happiest developed nation on earth.

Why?

According to the Organisation for Economic Co-operation and Development (OECD), Australia ranks tops by income levels, health, safety and housing… beating Sweden, Canada, Norway, Switzerland and the U.S.

It’s the third year in a row Australia has grabbed the top spot, and all because our country “performs exceptionally well in measures of wellbeing.”

Over 70% of Aussies aged 15 to 64 have a paid job, well above the OECD average, and the average life expectancy is quite high at 82 years.

And as if we needed to cast around for further reasons to put a smile on your dial…

As Australian investors — and Fools — you and I are exceptionally well placed…

This isn’t to ignore any of the bad news that’s come to light lately, such as Ford’s move away from domestic manufacturing, or the endless profit warnings coming out of the mining services sector… a widening income gap nationwide, or the end of the resources boom.

Or even the ABS report, released today, which shows the falling capital expenditure trend in stark relief.

It’s also despite the recent ASX volatility, which has battered my own portfolio in recent days, just as it probably has affected yours too…

You see, at The Motley Fool, we don’t go in for ‘blue sky’ projections or naive optimism.

But with opportunities galore — see below for my #1 reason to be a long-term ASX bull — and time on our side in the form of the near-magical wealth-building opportunities presented by compounding returns, we know we’ve got the cold hard facts on our side as well.

The truth is, when you take a bit of time to reflect on some of the wonderful conditions… you can’t help but feel pleased and optimistic about the long-term picture. Here are three reasons why we’re all right to be long-term ASX bulls.

Reason #1: Investment opportunities galore

Australia’s investable universe is incredibly diverse. Worldwide, we might best be known for gigantic resource companies like BHP Billiton (ASX: BHP) and Rio Tinto (ASX: RIO)

But we also have some of the world’s leading medical technology companies, including Cochlear (ASX: COH) and CSL (ASX: CSL).

Not to mention a broad array of up-and-coming mid- and small-cap companies with thriving businesses. And we’re certainly not the only ones saying so.

In case you missed our interview with senior fund manager Bill Laister of Contango (ASX: CTN) – who specialises in ASX small caps — simply click here to read the article, which includes Laister’s favourite stocks (and his outlook for gold prices).

The volatility we’ve seen lately can create buying opportunities for long-term, business-focussed investors. Current market conditions make for happy hunting… and Foolish investors should be positioning themselves to take advantage.

Reason #2: World-class management teams

Part of being a Foolish, business-focussed investor is paying close attention to company management — a key component of overall business quality. Fortunately, Australia isn’t short of world-class management teams.

As my colleague Scott Phillips, investment advisor to Motley Fool Share Advisor, recently put it… “The older I get, the more I realise just how important management is.”

We were speaking of Coca-Cola Amatil (ASX: CCL) and its chief, Terry Davis, who’s led the company since 2001 and is due to retire in a little more than a year’s time.

Another example comes from Woolworths (ASX: WOW) with its largely homegrown management team, many of which started out their days on the shop floor… so that today they know the business from the absolute ground up.

Chief executive Grant O’Brien, to use just one example, began his career as an accountant at a Woolworths-owned store in Tasmania some 25 years ago.

As Scott Phillips puts it: “Grant O’Brien is a quality manager, with broad experience, and Tom Pockett, Woolworths finance director, is smart and a steady pair of hands.”

Reason #3: A growing number of Fools…

Finally, the number of Australian investors who happily call themselves “Fools” is growing.

You and your neighbours and friends are reaching us through our free website, Fool.com.au, chock-full of investing news and ‘Motley’ commentary, as well as through Take Stock, our free email newsletter, and through membership in Motley Fool Share Advisor.

This means more and more people are getting on the road to long-term financial security, no matter what the ASX does today or tomorrow.

They’re investing for the future, and looking to shares of Australia’s best companies to help build their wealth.

Of course, such a strategy — long-term, buy-and-hold investing, and owning shares of the best companies — isn’t the sole province of Fools either. It’s also behind some of history’s greatest fortunes.

As Motley Fool writer Morgan Housel recently pointed out…

“Warren Buffett is a great investor, but what makes him rich is that he’s been a great investor for two thirds of a century. Of his current US$60 billion net worth, US$59.7 billion was added after his 50th birthday, and US$57 billion came after his 60th… His secret is time.”

We may not all be on the road to billionaire-dom. But with a sound investing philosophy — including saving and investing on

a regular basis — and time on our side, the chances are the future is very bright indeed.

When blind faith meets reality

The S&P/ASX200 (ASX: XJO) (^AXJO) is down again today, threatening to fall below 4,900.

It was only a couple of weeks ago when the same index charged through the 5,200 mark as investors blindly chased high yield stocks, particularly the banks, supermarkets and Telstra (ASX: TLS).

I trust their vision has now been restored… even if it has been at a substantial cost to their wealth. In investing, you learn the most from your mistakes.

If there’s one thing that is certain in an investor’s life, it’s that the market will be volatile.

Those who realise that — and prepare mentally and financially for that occurrence — are in the vast minority. And in investing, that can be profitable company to keep.

We’re glad to have you with us…

More expert advice from The Motley Fool

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Of the companies mentioned above, Bruce Jackson has an interest in Telstra, BHP and Woolworths

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