Investors who follow the market very closely are sometimes at a disadvantage in that they see every up-and-down movement and hear every possible reason that the market is about to boom or about to bust.
As Warren Buffett has suggested, one of the keys to becoming a successful investor is the ability to switch yourself "off" from all the market noise and allow yourself to concentrate on identifying undervalued quality companies that can grow their earnings for many years.
A buy and hold approach stops investors from trading in and out of stocks frequently, allowing investors to benefit from the long-term gains – something which often gets missed if an investor is distracted trying to time the market
For investors who are looking to buy quality stocks to hold on to and watch compound for the next 10 years, here are four worth considering –
ASX Ltd (ASX: ASX) operates the Australian stock and futures exchanges. The company is innovative and continues to add services to its offering. The recent creation of mFunds has the potential to drive an enormous volume of managed funds through its platform.
Computershare Limited (ASX: CPU) has built itself a very large and sticky customer base which effectively creates a form of annuity revenue for the company. Computershare has also proven adept at globalising its offering and successfully integrating bolt-on acquisitions – this growth trajectory looks to have a long way left to run.
Sonic Healthcare Limited (ASX: SHL) has also been successful at expanding its medical diagnostics services into new markets. Providing critical health services such as pathology and radiology means Sonic's revenues are both defensive in nature and also enjoy a long-term tailwind from an aging population.
Sydney Airport Holdings Ltd (ASX: SYD) currently enjoys a monopoly position as the sole provider of flights into and out of Sydney. While a decision has finally been made to build a second airport at Badgerys Creek, importantly Sydney Airport Holdings holds the first right of refusal. Whether Sydney Airport ends up running Badgerys creek or not, the solid cash flows and dividends are set to continue.
