If you're already 59 and hoping that buying the following four stocks will have you retiring comfortably within the next 12 months, then sorry but this isn't for you!
Investing in the share market is not some get rich quick scheme. As the saying goes 'it's not about timing the market, it's about time IN the market!' A quick review of most marketing material produced by fund managers will highlight this fact. Investment managers will regularly suggested a minimum time frame of five years for equity investments, and while you might think they state that just because they're trying to lock a customer in for five years, the reality is that any shorter period is really just volatility and randomness.
In the long run however stock prices should follow value, hence buying stocks that increase in value should turn out well. The easiest way to do this is by owning a portfolio akin to an index such as the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO). Given the long-term historic growth in equity markets, simply owning the equivalent of the market should eventually grow your portfolio, however it will likely take a long time and you'd want to start early if you plan to retire by 60.
An alternative way is to have an actively managed portfolio where the aim is to outperform a benchmark or achieve an absolute return. While it's far from easy to achieve, if long-term outperformance can be obtained then you should reach the stage of comfortable retirement sooner!
Here are four stocks which should all be earning significantly higher profits in 10, 20 and 30 years' time. Their impressive growth profiles could also see them outperform the wider market over the long term.
Brambles Limited (ASX: BXB) owns and operates one of the world's largest pallet pooling operations. The size of its pool allows the firm to achieve impressive economies of scale.
ResMed Inc. (CHESS) (ASX: RMD) and Virtus Health Ltd (ASX: VRT) are both exposed to the health sector which provides a long-term tailwind for their businesses. Each company is a market leader in their respective fields; thanks to the specialised nature of their businesses they also enjoy significant barriers to entry which creates a competitive advantage.
Macquarie Group Ltd (ASX: MQG) is by far the largest Australian-based investment bank. This significant position allows it to capture a big percentage of financial deals in Australia and increasingly around the globe too.
