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5 long-term winners for the inept investor

One thing I tell everybody that asks, is that ‘investing is hard’.

It’s not, per se, but learning to do it well is time consuming and expensive – maybe not in study fees, but in costly investing mistakes.

Just ask my $90 Rio Tinto Limited (ASX: RIO) shares if they paid their way.

The time required to become competent and the potential risks – in particular fear of denting the fragile nest egg – can be a bridge too far for investors in middle life.

Ironically these are the investors that need financial nous the most, as they are managing comparatively large incomes and complex financial situations.

If this is you and you’re looking to invest in shares for the long term, I have selected five ‘set and forget’ companies with solid businesses you can feel comfortable holding through to retirement and beyond.

Adelaide Brighton has been around since 1882, and today provides aggregate and lime for cement and building products. The company’s vertically integrated strategy – controlling the supply chain from start to finish – confers fantastic margins and defensive properties.

Shares look expensive at the moment but Adelaide Brighton is very much a company to own for the ultra long term.

The airport has a fantastic record of market outperformance, and with long term tourism tailwinds (traffic is expected to double by 2030) Sydney Airport’s performance is likely to continue.

Shares always look a little expensive, but the company fulfils its potential over time and investors can expect growing dividends.

Peer Auckland International Airport Ltd (ASX: AIA) enjoys similar advantages and tailwinds, and is also one for the watch-list.

Woolworths is one of the more aggressive stock choices in this article, with investors taking on the risk from competition with Wesfarmers Ltd (ASX: WES), and ALDI in return for a nationwide network of supermarkets and the ability to leverage new products.

Online growth, partnerships with eBay and prospective entrances into the pharmaceutical and banking sectors provide plenty of long-term growth opportunities, while today’s discount price reduces the downside risk.

  • Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Diversified holding company Washington Soul Pattinson has also been around for over 100 years, and buys stakes in ASX-listed companies.

This is the same strategy available to investors, but leveraging Soul Patts’ expertise and massive cash balance diminishes the risk – and some of the returns. Looks a little expensive right now, but is a perfect choice for long-term investors looking to minimise their workload.

(Contributor Owen Raskiewicz has more on the best time to buy Soul Patts, here)

Blood products and vaccine provider CSL has delivered outstanding long-term returns to shareholders in recent decades.

With share buybacks, the recent acquisition of vaccine maker Novartis and continued expansion overseas, CSL also has plenty of room to grow. Factor in defensive healthcare earnings and foreign currency earnings while the Australian dollar is weak, and you have potentially the the best stock on the ASX.

The ultimate in buy-and-hold-forever companies, and a must for the time poor or inept investor.

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 owns shares in Rio Tinto Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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