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5 stocks for a $1.3 million portfolio

Investing shouldn’t be considered a ‘get rich quick’ scheme. If you’re still under that impression then I’m sorry to break it to you but it rarely is!

Rather, investing is the most awesome and sustainable ‘get rich slowly’ method I know.

Consider this long-term strategy of wealth accumulation….. Diligently saving $400 each week for 20 years and investing those savings into carefully chosen stocks can help you grow rich.

Provided you can select stocks which will produce an annual compound return of 11% this strategy will lead to you investing $416,000 in savings and earning capital growth of $919,419 to ultimately create a portfolio valued at $1,335,419 after just 20 years.

Of course picking stocks that will give you long-term double digit returns is no easy task, but just because it’s hard doesn’t mean it’s impossible. Consider the ten-year returns achieved from these five widely-owned companies –

  • Global packaging business Amcor Limited (ASX: AMC) has produced a total shareholder return (TSR) of 12.1% per annum (pa).
  • Hearing device manufacturer Cochlear Limited (ASX: COH) has achieved a TSR of 15.3% pa.
  • Global registries business Computershare Limited (ASX: CPU) has provided shareholders with a TSR of 11.5% pa.
  • Global retail, corporate and wholesale travel agency Flight Centre Travel Group Ltd (ASX: FLT) has achieved a TSR of 12% pa.
  • With the recent start of production at its massive PNG LNG development, Oil Search Limited (ASX: OSH) looks set for many more years of solid cash flows. Over the past decade the energy producer has provided a TSR of 18.6% pa.

Future still looks bright

It is easy to identify top performing stocks after the fact, but much more difficult to accurately select the top performing stocks of the future. The above five companies all have international opportunities which provides a long runway of future growth potential. As high quality market leaders these could all be worth a closer look by long-term investors seeking to grow their wealth.

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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article. The Motley Fool owns shares in Computershare. 

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