Long-term investing is never about just today, but tomorrow and the days and years that follow. Warren Buffett is worth US$80 billion today, but he only made his first billion after he turned 50. And he didn’t do it by picking the shares that he thought would make him rich tomorrow, he chose shares that he knew would make him rich over decades – after all, the Coca-Cola Company (one of Buffett’s best investments) hasn’t been a hot growth stock for a long time, but people are still drinking Coke all the same.
With this mindset, this is how I would build a $100,000 portfolio for 2020 and beyond.
Vanguard Australian Shares Index ETF (ASX: VAS) – $20,000
An Aussie share market exchange traded fund (ETF) like VAS is essentially a bet on the Australian economy. As the only advanced economy to avoid recession during the GFC and in fact no recession at all for thirty years, I think this is a good bet myself. VAS would make a great backbone for our portfolio.
BetaShares Nasdaq 100 ETF (ASX: NDQ) – $20,000
Another ETF, but this one follows the Nasdaq exchange over in the US. The Nasdaq is where all the big tech firms that are shaping the world as we know it are listed, so you are getting exposure to companies like Microsoft, Alphabet (Google), Apple, Uber and Amazon all in one basket.
BHP Group Ltd (ASX: BHP) – $20,000
Although BHP is not the most interesting company, the commodities that it specialises in (namely iron ore and copper) are going to be in high demand from growing economies like Brazil, India and China for decades to come. I think a bet on BHP is a bet on the future of emerging markets and one that I’d be very happy to take here.
Ramsay Health Care Limited (ASX: RHC) – $20,000
In my opinion, a play on the healthcare industry is an essential part of a future-based portfolio; and private hospital provider Ramsay is a great candidate. Ramsay’s portfolio of hospitals in Australia is renown for being the best in the business and the company now has an aggressive international expansion program as well. Another reason to like this company is its track record of dividend payments – they’ve gone up every year since 2000!
Coles Group Ltd (ASX: COL) – $20,000
Having a consumer staples business like Coles is a great way of rounding out the portfolio. After all, we are all going to continue to need food and groceries and Coles provides these (and more) at budget prices. The company is also expected to pay out a 4% dividend later this year, so we are also adding a nice income stream to boot.
I think we have here a balanced and well-rounded portfolio that will thrive through 2020 and beyond. Sure, it’s (probably) not going to make you rich overnight, but it might if you wait a decade to two. That’s what long-term investing is all about – just ask Mr. Buffett.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Ramsay Health Care 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.