MENU

2 ASX stocks to hold forever

The best holding period for shares is forever, if it makes sense to do so. There aren’t many ASX stocks I’d want to hold to forever.

If you can hold forever then you avoid brokerage fees, taxes on capital gains and give compounding the best chance to work in your favour.

Here are two ASX stocks that you could hold forever:

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Vanguard is a world leader in offering cheap access to index funds.

The best index funds are excellent for most people because they offer share market exposure for a low cost, with excellent diversification and little effort by investors.

This particular exchange-traded fund (ETF) has a low management fee cost of only 0.18%, has nearly 1,600 holdings and has excellent diversification.

Its investments are spread across IT, financials, healthcare, industrial, consumer discretionary and consumer staple businesses, as well as other industries.

The reason why I think you could hold this investment forever is because it offers truly global earnings exposure. It’s invested across a huge number of countries and a lot of its US holdings are global businesses.

The ETF’s holdings change over time, so it should always be relevant for investors. It may not generate huge earnings, but it should steadily grow over time.

As a bonus, it comes with a dividend yield of 2.4%.

Rural Funds Group (ASX: RFF)

Rural Funds is Australia’s leading agricultural real estate investment trust (REIT).

I prefer Rural Funds compared to other real estate shares because farmland doesn’t require huge capital ongoing investments like shopping centres or office buildings. Structures usually depreciate over time, whereas most farm types don’t require that level of operating expenditure.

Rural Funds is invested in a variety of farm types including almonds, vineyards, cattle, cotton, macadamias and poultry.

Farmland has been an extremely useful asset for many hundreds of years, if not thousands of years. I’m quite sure it’s going to be useful for at least another 75 years.

Management are targeting growth of the distribution by 4% per annum for the long-term. It’s currently trading with a distribution yield of 4.7%.

Foolish takeaway

I’m a happy a long-term Rural Funds shareholder and I will likely buy units of the Vanguard MSCI ETF at some point in the future, but not yet. These are two of the least likely shares I’d sell if I owned them. I like that Rural Funds’ tenants carry all of the operational risk.

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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.

5 ASX Stocks for Building Wealth After 50

I just read that Warren Buffett, the world’s best investor, made over 99% of his massive fortune after his 50th birthday.

It just goes to show you… it’s never too late to start securing your financial future.

And Motley Fool Chief Investment Advisor Scott Phillips just released a brand-new report that reveals five of our favourite ASX stocks for building wealth after 50.

– Each company boasts strong growth prospects over the next 3 to 5 years…

– Most importantly each pays a generous dividend, fully franked.

Simply click here to find out how you can claim your FREE copy of “5 ASX Stocks for Building Wealth After 50.”

See the stocks now