Macquarie Group Ltd (ASX: MQG) shares and Bapcor Ltd (ASX: BAP) shares appear priced to perfection, but when they fall I'll be waiting to scoop them up for my mother's portfolio.
Long-term outperformance
Investing in the sharemarket is a long-term pursuit. Make no mistake, buying shares today means you are optimistic about the long-term outlook for a business or the country.
Think about it like this: there have been many years in which share markets have slumped 30%, 40%, 50% or more. But over the past 40 or so years, the sharemarket has returned an average of more than 9%, according to Vanguard.
For my mother's portfolio, I aim to invest in businesses that I think can withstand the tough times and emerge into a stronger and more profitable business in 10 years.
Here are two blue-chip shares that I think have what it takes over the long-term.
Macquarie
Macquarie Group is Australia's leading investment bank. Its shares were slammed during the Global Financial Crisis, falling from over $97 to $17 in two years. As an investment bank, providing services like investment research through to car finance, the company is leveraged to movements in financial markets.
However, banking is a great industry to be invested in when the time is right — just ask Commonwealth Bank of Australia (ASX: CBA) or Westpac Banking Corp (ASX: WBC) shareholders who bought shares in 2009.
Given its overseas presence and diverse operating segments, I think Macquarie is one of the best banks on the ASX. While dividends may be less consistent than some of its peers, it'll be the first bank I run the ruler over during the next market downturn given its long-term growth potential.
Bapcor
Bapcor is the owner of Burson, Autobarn and New Zealand's Hellaby Holdings. As a distributor of aftermarket car parts, Bapcor's business is often considered somewhat defensive since many people are unlikely to buy a new car in a recession but service an older vehicle (using aftermarket parts). Burson is the leader in its industry by a long shot.
However, Bapcor's potential is no secret. The market appears to have priced its shares according to its long-term potential. And following a recent batch of acquisitions, it may pay to be patient and wait for a lower share price before buying in.
Foolish Takeaway
Over the long-term, the sharemarket has proven to be the best place to park your investment dollars. However, if you want to do better than the market average you have to buy shares when they trade below their intrinsic value (i.e. what they are worth). After all, if you do the same thing as everyone else you can expect the same results.
Macquarie and Bapcor are two shares I'd buy for my mother, but I'm waiting for a lower price before buying in.
