One of the simplest and arguably most effective investment strategies is buy and hold investing.
This strategy sees investors buy the shares of quality companies and hold onto them for an extended period of time.
One advocate of the strategy is legendary investor Warren Buffett, who has stated many times that his favourite holding period is forever.
And given the success that he has had over several decades, I think it pays to listen to his advice.
Three quality ASX shares that I think Warren Buffett would buy and hold are listed below. Here’s why I like them:
CSL Limited (ASX: CSL)
Given its high return on equity, talented management team, and long track record of generating strong earnings growth and returns for shareholders, I think this global biotech company would be a share that interests Mr Buffett. Especially given its positive growth potential thanks to its growing plasma collection network, strong core business, and pipeline of potentially lucrative products under development.
REA Group Limited (ASX: REA)
Another company that has generated consistently high levels of return on equity is this property listings company. And given its leading position in the Australian market through its realestate.com.au website and its wide range of operations internationally, I believe REA Group is well-positioned to continue doing so for a long time to come. I expect this to lead to solid returns for shareholders over the next decade. Something which I expect the legendary investor would be pleased to see.
SEEK Limited (ASX: SEK)
As the owner and operator of leading online employment sites in Australia and numerous international markets, SEEK is the first place that businesses and job seekers go to for job listings. I think this is something that Warren Buffett would find attractive and believe he would see it as a good long term investment. So, with its shares down notably from their 52-week high due to management sacrificing short term profits in favour of investing heavily in its future growth, I feel now could be a good time to seize on this share price weakness.
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended REA Group Limited and SEEK 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.
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