When it comes to investing, the best returns come not from chasing speculative short-term opportunities but from owning a small group of exceptional stocks for decades.
Businesses with durable advantages, trusted brands, and exposure to long-term growth trends can keep compounding shareholder wealth through thick and thin.
With that in mind, here are three Australian stocks that I believe fit that description and could be held in a portfolio forever.
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Coles Group Ltd (ASX: COL)
Coles may not be the most glamorous company on the ASX, but sometimes the most dependable businesses are also the most rewarding. As one of the nation's largest supermarket operators, Coles plays a role in the everyday lives of millions of Australians. People need groceries regardless of economic conditions, which gives the business a natural defensive quality. This was evident during the COVID pandemic.
Coles has also been investing heavily in supply chain automation and digital capabilities, helping it reduce costs and improve efficiency. While margins in food retail are slim, these improvements can add up over time. Its online platform has grown rapidly in recent years, and the company is continuing to adapt to changing shopping habits.
Throw in its reliable dividend stream, and Coles provides investors with a rare combination of resilience and steady returns.
Goodman Group (ASX: GMG)
Another Australian stock I would buy and hold is Goodman Group. It is at the heart of one of the most powerful structural shifts in the global economy: e-commerce. Every online order eventually relies on logistics infrastructure, and Goodman has become one of the world's largest developers and managers of these properties.
Its warehouses and distribution centres are strategically located near major cities, ports, and transport hubs. This makes them highly valuable to companies like Amazon (NASDAQ: AMZN) and major retailers looking to serve customers quickly and efficiently. In addition, Goodman has been quick to integrate sustainability features into its developments, an increasingly important factor for global tenants.
But it isn't settling for that. Goodman recently embarked on its next growth journey with data centres. It has a potentially valuable network of centres under development across the world which look set to benefit greatly from the AI and cloud boom.
Overall, with exposure to long-term growth trends in e-commerce, AI, cloud, logistics, and urbanisation, Goodman looks like an Australian stock that can keep compounding for many years.
ResMed Inc. (ASX: RMD)
Finally, ResMed is a world leader in sleep and respiratory care. Its devices and software help millions of people manage conditions such as sleep apnoea, a disorder that has gained increasing medical recognition and diagnosis over the last two decades.
What makes ResMed especially attractive is its powerful combination of hardware and digital health platforms. Its cloud-connected devices provide doctors and patients with real-time insights, improving adherence and health outcomes. The company also generates significant recurring revenue from consumables like masks and accessories, which patients need to replace regularly.
ResMed is targeting a vast and growing market, with over a billion people globally estimated to be suffering from undiagnosed sleep conditions. And with education and awareness increasing by the year, it looks well-placed for growth over the coming decades.
