If you’re a long-term investor in shares, it’s probably because you’ve seen what 10, 20, or 30 year holding periods can do to the value of a good investment. Here’s CSL Limited (ASX: CSL):
CSL has grown in value 857% over the past 18 years since Google’s data began. It’s a sterling example of why you should aim to hold shares for the long term. So most investors want to hold long term – and they should.
There’s one thing you need to understand first
Jeff Bezos, founder and CEO of Amazon says it best:
“I very frequently get the question: ‘What’s going to change in the next 10 years?’ And that is a very interesting question; it’s a very common one. I almost never get the question: ‘What’s not going to change in the next 10 years?’
And I submit to you that the second question is actually the more important of the two — because you can build a business strategy around the things that are stable in time. (emphasis added)
The stock market is full of examples of companies that were made obsolete either by technology or changing consumer preferences. Myer Holdings Ltd (ASX: MYR) is battling against changing consumer preferences and new technology (online shopping).
By contrast, Ramsay Health Care Limited (ASX: RHC) has spent the last 20 years building hospitals, and it will probably be doing the same things 20 years from now. Hospitals and medical technology may change, but the need for specialist medical facilities won’t.
Sydney Airport Holdings Pty Ltd (ASX: SYD) could be an attractive prospect if you take the view that international travel and logistics facilities will remain essential. Likewise CSL remains an attractive prospect, because the company has a proven process of creating new treatments over time, and invests heavily in doing so.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. The Motley Fool Australia owns shares of Sydney Airport Holdings Limited. 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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