I think the best way to invest is owning great businesses for the long term. I'd focus on companies that can compound their earnings at a good rate.
The types of businesses I'm expecting strong performance from are those with rising earnings and likely to achieve strengthening margins.
I'll outline two of the best investments in my opinion for that sort of exposure below.
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TECHNOLOGY ONE Limited (ASX: TNE)
TechnologyOne describes itself as Australia's largest enterprise software company. More than 1,300 businesses, government agencies, local councils, and universities use the ASX share's offering. These are high-quality customers who need some form of software to operate, be efficient, and stay connected. They're defensive clients, in my view.
The company currently invests around a quarter of its revenue each year in R&D, making its software even better for clients and helping drive net revenue retention (NRR). The NRR tells us how much revenue grew from the existing client base year over year. Its NRR was 114% in the FY26 half-year result, implying 14% growth.
With a goal of NRR of 115% each year, the business can double in size in five years.
The ASX share is working towards $1 billion of annual recurring revenue (ARR) by FY30, which will help the company's profit before tax margin rise towards 35% in the "long term".
The ASX share's expansion in the UK is going well so far, and it continues to win clients in the country. Some recent wins include Liverpool City Council, Salisbury City Council, the University of Suffolk, and Royal Holloway, University of London.
AI and competitors pose a risk to the business, but there is clear evidence of customer preference for TechnologyOne's offering, given recent events.
A previous customer, City of Townsville, left for a competitor and then returned after realising the competitor's solutions weren't good enough, signing a 10-year agreement with TechnologyOne.
The ASX share is high quality and looks like good value considering its growth potential. According to CommSec, the TechnologyOne share price is valued at 45 times FY28's estimated earnings. I think that's a fair price considering it's looking to grow its ARR from $598 million in HY26 to at least $1 billion by FY30, combined with rising margins. I'd be happy to buy it today and own it for the years of growth ahead.
If it's able to maintain NRR of around 115% over the next decade, it could quadruple in size.
Betashares Global Quality Leaders ETF (ASX: QLTY)
I think quality shares are the way to go when it comes to ASX shares and international shares.
Why own average businesses in a portfolio when you can own great ones? This exchange-traded fund (ETF) is all about owning the highest-quality shares in the world.
To decide on the portfolio, the fund looks at four different factors.
Firstly, the business must have a high return on equity (ROE). ROE tells us how much of a profit return a company makes on shareholder money retained in the business. The higher the number, the higher quality the business seems. It also suggests that future additional retained shareholder money could generate a high return and grow profit.
Secondly, the business should have a very sustainable debt-to-capital level. Lower debt is better for a company's health and also means the ROE isn't being artificially boosted by high debt levels.
Thirdly, the QLTY ETF wants to find businesses with good cash flow generation ability. It's important to see that earnings are translating into real cash going through the bank account.
Finally, the fund wants to see earnings stability. If profit doesn't go backwards, it hopefully means the share price is more stable than others. Plus, if earnings aren't going down, then it means profit is regularly rising – a great driver of shareholder returns.
Since inception in November 2018, the QLTY ETF has returned an average of 13.8% per year to September 2026, though past performance is not a guarantee of future returns.
Its 150 picks come from a range of countries and sectors, so it can provide valuable diversification for Australian investors in the coming years. Over the next decade, I think a high-quality portfolio of global stocks is more likely to deliver satisfactory returns than average businesses.
