Most investors don’t simply invest for the fun of it. Rather they invest because they are thinking ahead and planning for a time in the future when they will need cash. That need could come when it’s time to buy a house, or put the kids through school, or perhaps most of all when they retire and they no longer have the monthly pay cheque rolling in.
Having a long investment horizon is a wonderful thing as unlike stock market participants who are trying to get rich quickly and therefore are forced to focus on near term ups and downs, long-term investors can block out the day-to-day volatility of the market and concentrate on a distant goal.
If you’re investing for the long-term – perhaps you’re trying to grow your superannuation portfolio for a comfortable retirement – the types of businesses you want to own are ones that you know will still be profitable and growing a lifetime from now.
Slater & Gordon Limited (ASX: SGH) for example provides essential legal services including litigation both in Australia and the UK. While the company is already one of the largest in its field it still has massive growth opportunities ahead of it, and there’s no doubt its services will still be in demand in the future.
Telstra Corporation Ltd (ASX: TLS) is another example of a company which is solid as a rock. While the telecommunications landscape will almost certainly look quite different in the future, the market-leading status of Telstra should see the company continue to command a major share of the industry.
Macquarie Group Ltd (ASX: MQG) has a knack of reinventing itself and adjusting its business to suit the economic environment. This is a very handy attribute which should help the investment bank retain its market-leading position for years to come.
Sydney Airport Holdings Ltd (ASX: SYD) is a unique asset that is near impossible to replicate. While Melbourne likes to vie for the title of most popular city, Sydney is a major international draw card and will continue to command a major share of both international as well as domestic travel. While investors do need to consider the effects of a second airport, currently Sydney Airport has the first right of refusal which stands the company in good stead.