When you’re investing for the long term, every day is a great day to buy shares.
But there’s no denying that short-term market falls can be stressful even for the most experienced investor.
Newer investors are more at risk because of their tendency to buy into the perceived security of the large-cap shares like the big banks and BHP Billiton Limited (ASX: BHP).
Ironically these can be the worst shares to buy because the herd mentality of the market sells fearfully, and the more well known a share is the more likely it is to attract inexperienced investors who panic sell.
So it came to be that each of the four big banks has tumbled 10% in the past two months, and BHP Billiton has dropped close to 20% in the same time.
The three companies I’m about to share with you however have lost fewer than 5% in the past month – less than the ASX average – and enjoy considerably better growth prospects than many bigger companies.
Lifehealthcare Group Ltd (ASX: LHC) – no change
Lifehealthcare investors have experienced a very steady ride this year with the company rarely shifting from its average price of around $2.30.
After a slow start to life on the ASX this healthcare equipment provider successfully met its prospectus forecasts with NPAT growth of 7.5%, revenue growth of 13% and a reduction in total debt.
Shareholders also received a 7.5 cents per share (3.2%) final dividend, a small fraction of the company’s 42 cents per share in earnings. Thus I would expect a rise in dividend payments next year in addition to the growth forecasted by the company.
Combined with its apparent price resilience, there’s a lot to like about Lifehealthcare.
Scentre Group Ltd (ASX: SCG) – down 4.3%
Scentre Group will be familiar to most readers as the rebranded Westfield Retail Trust which now manages all of Westfield’s ANZ property portfolio.
Its property portfolio gives it reliable, tangible earnings and at a premium to Net Tangible Assets of only 15% the company looks like good value.
A forecast dividend of 6% makes Scentre look very attractive to income-focussed investors and also offers extra price support in a falling market.
Collection House Limited (ASX: CLH) – down 3.3%
Finally we have Collection House, a small-cap debt collector that has a very impressive performance record.
The company has successfully grown revenues and dividends every year since 2007, and with high amounts of new successful loan applications every month Collection House shareholders can expect profit growth to continue in future reporting periods.
With earnings growth predicted again this financial year and a growing dividend of 4.1% fully franked, Collection House’s sterling defensive characteristics should be plain to see.
Above all, don’t stress out about a falling market. See only the opportunity.
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We all know how he turned out.
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Motley Fool contributor Sean O'Neill owns shares in Scentre Group, Lifehealthcare and Collection House.