If you haven’t already noticed it. Everyone claims to be a buy and hold investor. They buy, hold for a period and sell when they feel compelled to do so. Unfortunately, many of us are compelled to sell when a company’s stock price is at, or near, its lowest price. However by simply changing your investment ethos from buy and hold to buy to hold, you set off a subconscious switch which reminds you to purchase a company with the expectation of holding it forever. As legendary investor Warren Buffett says: “The best holding period is forever.” It’s a simple…
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If you haven’t already noticed it. Everyone claims to be a buy and hold investor. They buy, hold for a period and sell when they feel compelled to do so.
Unfortunately, many of us are compelled to sell when a company’s stock price is at, or near, its lowest price. However by simply changing your investment ethos from buy and hold to buy to hold, you set off a subconscious switch which reminds you to purchase a company with the expectation of holding it forever.
As legendary investor Warren Buffett says: “The best holding period is forever.” It’s a simple philosophy which has helped him to enter his 80’s as one of the world’s richest people.
Even if you don’t want to be a billionaire or work into your 80’s, I think that some of the following companies will help you retire much more comfortably 10 years (or more) from now.
1. Australia and New Zealand Banking Group (ASX: ANZ) may not be at the top of my buy list right now (I don’t feel its exactly ‘cheap’) but it certainly appears likely to outperform all of its domestically-focused peers. With its Super Regional Strategy kicking goals for management and shareholders, it deserves a spot on your watchlist and, when you feel you’re given a good price to buy in, it could be added to your long-term buy to hold portfolio.
2. Telstra Corporation Ltd (ASX: TLS) has, like ANZ, set an ambitious goal of deriving a substantial amount of business from Asian markets in coming years. CEO David Thodey wants a third of revenues derived from Asia by 2020. Although this type of strategy comes gift wrapped with a number of potential risks, it has a solid base from which to leverage its international growth and has a track record of making apt acquisitions and growing earnings. I think it’s a good buy at current prices.
3. Woodside Petroleum Limited (ASX: WPL) is forecast to pay a juicy fully franked dividend in the next 12 months following its withdrawal from the giant Leviathan gas field off the coast of Israel. What’s more, recent share buybacks will increase earnings per share. With ample organic growth prospects, a solid balance sheet and capable management, Woodside will make a worthy long-term investment at the right price.
4. BHP Billiton Limited (ASX: BHP) is the best big resources company on the planet. It has built a reputation for itself through its ability to grow its low-cost production for in-demand cyclical commodities. With a focus on debt repayments, ongoing divestment of non-core assets and solid cash flows, BHP is likely to grow earnings and dividends in coming decades.
5. Woolworths Limited (ASX: WOW) is, like ANZ, not cheap (I’d be happy up to pay a price around $27 per share). However for those focused on the ultra-long term, the company would be a great one to add to the core section of your portfolio.
This stock is CHEAP and pays a 7% dividend!
Of the five companies, I believe BHP Billiton and Telstra are solid long-term buys at current prices. Woodside is in a transitional period where it needs to find its next big growth prospect and, until that happens, it’s unclear what direction management will steer the company. ANZ and Woolworths (especially Woolworths) command high share prices and trade at a premium to levels which I believe would make them standout investments for new money.
However, there are more than five stocks on the ASX (in fact, over 2000!) and investors shouldn't limit themselves to most well-known the companies. For example, our top analyst recently found one ASX stock with a 7% grossed-up dividend yield, cheap share price and outstanding growth prospects. BEST of all: You can get its name and code free in our new investment report! Simply click here to download your free copy of "The Motley Fool's Top Dividend Stock for 2014-2015" today.
Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any of the mentioned companies.