4 stocks to buy and hold for the next decade

Since 1970, the Australian share market has returned an average of 9.7% each year, according to Vanguard.

That’s roughly around even longer term studies which suggest a return of around 10% p.a. over the very long-term is a decent target to aim for.

If you want to structure your portfolio to achieve that, you need to hold a core portfolio chock-a-block full of high quality companies with long-term earnings power.

Here are four companies that fit the bill…

Telstra Corporation Ltd (ASX: TLS)

Telstra pays a solid dividend and while the company is not showing much growth at the moment, it’s also hardly likely to go bust anytime soon. That makes it a perfect ‘bedrock’ stock for your core portfolio. The telco’s dominance of the Australian mobile network and the broadband sector should stand it in good stead over the next decade – even as the rollout of the NBN gathers pace. The company’s smaller divisions are also growing nicely and could prove to be big growth drivers in the future.

Woolworths Limited (ASX: WOW)

The supermarket retailer has its share of problems at the moment, but a new CEO is sweeping the broom through the company and appears to be making the right moves to return Woolies to its dominant position. In 10 years’ time, most investors are unlikely to remember the issues plaguing the company presently – but the current price could be a huge opportunity for those with a long-term investing time frame.

Wesfarmers Ltd (ASX: WES)

The owner of Coles, Bunnings, Officeworks and other diversified businesses also has its own share of issues, notably in its resources/coal division. But the company still pays a solid dividend yield -4.8% fully franked at today’s price of $42.50. The recent entry into the UK home hardware market could prove to be a big mistake or a stroke of genius, but either way, Coles is likely to remain the engine room for many years to come. So far, management have proven their ability to turn around Coles and you’d have to give them the benefit of the doubt when it comes to the UK move.


A surprise pick to some, the patents and trademarks law firm has a long history and is actually the holding company for four different companies all offering similar services to corporates and individuals in 25 countries across the Asia-Pacific region. Many of its top clients have histories with the firm of more than 25 years – which should stand IPH in good stead over the next decade. Paying a modest dividend yield of 3.1% (partly franked), IPH should be able to add growth to your portfolio. At the current price of $6.70 – it’s also a long way from its 52-week high of $9.43 set in February this year.

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Motley Fool writer/analyst Mike King owns shares in Wesfarmers, Woolworths and Telstra Corporation. You can follow Mike on Twitter @TMFKinga

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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