The longer you give your investment thesis to play out, the more likely you are to be successful in your strategy. Buying and selling every couple of weeks is not going to generate strong outperformance due to trading fees and not letting compounding run its course. So, I believe the best thing to do is invest in shares that have good long-term potential whilst being solid investments in the short-term. I wouldn’t say I’d be happy to hold all the shares in my portfolio forever, but I would like to own these three for many decades: Rural Funds Group
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The longer you give your investment thesis to play out, the more likely you are to be successful in your strategy. Buying and selling every couple of weeks is not going to generate strong outperformance due to trading fees and not letting compounding run its course.
So, I believe the best thing to do is invest in shares that have good long-term potential whilst being solid investments in the short-term.
I wouldn’t say I’d be happy to hold all the shares in my portfolio forever, but I would like to own these three for many decades:
Rural Funds Group (ASX: RFF)
Rural Funds is one of the larger real estate investment trusts (REITs) on the ASX. Its purpose is to invest in agricultural properties and lease them out to high-quality tenants like Select Harvests Limited (ASX: SHV) and Treasury Wine Estates Ltd (ASX: TWE).
It has a variety of farm types including almonds, macadamies, vineyards, cotton and cattle. The REIT aims to increase its distribution by 4% each year.
I want to own Rural Funds forever because farmland has an extremely long useful life, if not forever. It doesn’t depreciate in value like an office building or warehouse. Farmland has been useful for thousands of years and I imagine will continue to remain a good investment during my life time.
InvoCare Limited (ASX: IVC)
InvoCare is Australia’s largest funeral provider, its multitude of national and local brands carry out around a third of funerals in Australia.
The company has a promising future because death volumes are expected to grow by 1.4% per annum between 2016 to 2025 and then increase by 2.2% per annum from 2025 to 2050.
I want to own InvoCare shares forever because the sad reality is that a certain number of people die every year. This gives InvoCare an almost-guaranteed source of income and profit, so it’s a very defensive business.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is Australia’s oldest investment company having operated for more than a century. It has steadily outperformed the ASX Index over the past 10 and 15 years.
The conglomerate makes strategic large investments into other businesses that it believes will help it achieve good long-term returns.
I want to own Soul Patts shares forever because the management have a long-term focus. The company has been effectively managed by the same families through multiple generations, which allows it to make investment decisions for the years ahead, not just the next quarter. I also like that the investment structure means Soul Patts can change its holdings in the future as it sees fit.
As a bonus, it has increased its annual ordinary dividend every year since 2000.
I believe all three shares are quality choices. However, Soul Patts is trading at an all-time high so I’d wait for a lower price and Rural Funds is trading at a big premium to its adjusted NTA. I think InvoCare could be a good long-term buy at these levels.
I’d also be very happy to own one of these top stocks for at least the next two decades as well, it has a big tailwind thanks to the ageing population.
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Motley Fool contributor Tristan Harrison owns shares of InvoCare Limited, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Treasury Wine Estates 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 Scott Phillips.