There are not many ASX shares that I think every investor should own.
We now seem to be in an investment era where most people would do far better by investing in a simple index fund like iShares S&P 500 ETF (ASX: IVV) than trying to outperform the market.
Of course, it is still possible to outperform the market. You just need to find the few businesses that are worth owning for the long-term, that aim to reward investors and seem to be safe from disruption for the foreseeable future.
It's important to find good long-term investments because thinking short-term can lead to a lot of brokerage costs and sometimes making worse investment decisions than just sticking with what you have.
With that in mind, these are my two picks:
Altium Limited (ASX: ALU)
Altium, the electronic PCB design software business, ticks a lot of boxes for me. It is leading the change in its industry, it has globally diversified earnings, it has high levels of recurring revenue, it is focused on increasing profit margins, it's debt free, it's willing to make acquisitions and it aims to grow its dividend each year.
Being a software business means it has very good financial attributes for growth because it hardly costs anything to expand the business with new customers, leading to higher profit margins.
If it achieves its long-term goals of US$500 million of revenue and 100,000 Altium Designer seats then it may not be so expensive after all at 48x FY20's estimated earnings.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is perhaps my favourite business on the ASX, being the most similar thing we have to Berkshire Hathaway in Australia due to the fact it both wholly owns businesses and also invests in listed businesses.
The investment conglomerate company is committed to growing its dividend each year and it has paid a dividend every year in its existence, which is fantastic considering it is more than 100 years old.
With its largest holdings like TPG Telecom Ltd (ASX: TPM) growing significantly in value recently, the Soul Patts dividend doesn't look very exciting with a grossed-up yield of 2.6%. But, its total returns could continue to be very good over the long-term.
Foolish takeaway
Both of these businesses are ultra-high-quality in my opinion, but the market recognises that – it's why they're both near record highs. Their share prices would need to be roughly a third cheaper for me to consider saying they're good value.
