The Motley Fool

3 of the best investments to buy and hold forever

If you’re anything like I used to be – before I started writing for The Motley Fool – you don’t like the idea of actively managing your portfolio.

Sure, you might go through a burst of enthusiasm as you read about a great company or market gyration, then you dive in headfirst to a pile of figures, reports and opinions before making a few frenzied purchases or sales – and then it’s over.

Suddenly you don’t really care anymore. You’re busy working and living life again; you might check your portfolio once every month or two with a kind of idle curiosity, but that’s about it.

Maybe the next time you look at it is during the lazy days after Christmas, when the wrapping and the roast are long gone and you’re starting to get bored.

Inevitably, you’ll get caught.

One of your companies will either shoot skywards (if you’re lucky) or suffer a sickening plunge (more likely) in the opposite direction.

You never saw it coming, and you’re kind of mad.

Your money just evaporated in a shower of electrons in an ASX server somewhere!

If you’d bought iron ore investments a year ago – in good faith, as a long-term investor – that’s exactly what might have happened.

I managed to dodge the iron ore issue, but I’ve been there.

I know how it is.

Now that I write these articles I manage my portfolio a lot more actively, but I’ve never forgotten how comforting it can be to own a share that you can depend on to maintain and grow its value, year-in, year-out.

Today’s article is about three of those sorts of shares.

1. Sydney Airport Holdings Ltd (ASX: SYD)

Sydney Airport can stand on its record for capital growth and dividends over the past ten years. It has been a very reliable performer with strong competitive advantages, delivering roughly 88% capital growth over the past ten years, excluding dividends.

The airport has definitely beaten the ASX during that period, and looks to do so again in the coming decade with growing tourism predicted to almost double the number of passengers (from 38 to 74 million) by 2033.

By virtue of its location and ability to build and own the planned second airport in Sydney (if it so chooses), Sydney Airport is virtually guaranteed to enjoy the fruits of growing prosperity and tourism in Asia.

2. Woolworths Limited (ASX: WOW)

Like Sydney Airport, Woolworths’ past record speaks entirely for itself, and investors will be mostly concerned about its future after the knocking Woolies has copped from analysts lately.

Many are predicting that the company’s best days are behind it, forgetting that Woolworths enjoys a number of easily overlooked core strengths.

Self-serve checkouts take one arrow from the quiver of Aldi and Tesco and the like, while the group’s massive size allows enormous pricing advantages.

Its expansion into hardware continues to look promising and the purchase of data mining company Quantium appears to be an exceedingly shrewd move given Woolworths’ plan to begin cross-selling financial services to customers (which also won’t do any harm to its bottom line).

3. Telstra Corporation Ltd (ASX: TLS)

Many long-term investors will have good reason to be wary of Telstra, especially if you bought into the company during the highly-priced government share issues of the 2000s.

While the company did experience a fairly serious drop from 2009-2012, there’s no denying Telstra has paid its 28 cents a year dividend every year since 2007, and never paid less than 20 cents a year in the three years preceding that.

This is a superbly reliable dividend stock and investors for the coming decade can expect to see better capital growth as Telstra is sitting on an enormous warchest and has an eye for Asian expansions.

And there you have it, three stocks that will help you sleep better whether you’re a nervous portfolio watcher or the more apathetic kind of investor.

Don’t be put off by the fact that I don’t own any of these three shares – In fact I used to own all three, but now that it’s my job to research shares, I’ve sold them to chase bigger, riskier rewards.

If you’re interested in the bigger rewards I’m chasing scroll down and enter your email address into the link below to receive our top analyst’s report into three high-risk, high-reward resource companies.

5 stocks under $5

We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.

And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

*Extreme Opportunities returns as of June 5th 2020

Motley Fool contributor Sean O'Neill doesn't own shares in any company mentioned.

Related Articles...