Long-term investment strategies have a number of benefits. Statistics show that equity investing where quality stocks are held for 5-6 years have generated more wealth than short-term investments. This is because all the short-term volatility that affect stock markets are thrown out the window when a long-term passive investment strategy is adopted. Another added bonus – you sleep better with a long term investment strategy!
When picking shares for long term investment, it is all about fundamental analysis of the company. It is important to know all the risks associated with a stock in order to optimise and diversify your portfolio. Here is our pick of the op 5 long term shares to hold on to in your portfolio
The ASX-100 listed company provides real estate to the digital world. The firm has and is continuing to benefit from the push towards a digital economy by offering data centre and connectivity solutions, among other services. The firm currently operates 9 data centres in Australia and is already servicing clients such as Amazon’s AWS wing.
Nextdc has not just weathered the Covid19 storm but looks like it is emerging out of the crisis stronger than before. This is because of the strong unit economics that Nextdc shows. There has been a consistency to its growth and performance over the past few years, and the changing dynamics in economics mean that Nextdc will only get bigger and stronger.
Regis is a gold mining company that operates 2 projects – Duketon and McPhillamys. The firm has been a consistent performer with respect to cash flows and growth. The recent surge in gold prices during the pandemic has benefited the company as its profit margins would have increased. Regis is also a low cost producer of the commodity and has guidance forecasts that show that they are striving for growth. They also have a healthy mix of equity and debt – further de-risking the firm for long-term investors.
Magellan is one of the biggest fund managers in Australia with a number of products aimed at both – retail and institutional investors. The firm is also diversified globally with revenues from not just ANZ, but also EMEA, APAC, and North America. The funds under management are over $100 billion as of September 2020. The firm has had good past performance and is still looking to grow by increasing their offerings for the retail segment and actively looking for M&A opportunities. With a proven operating model and healthy dividends, you cannot go wrong with Magellan in your portfolio.
The California based medical equipment manufacturing company also now offers a cloud-based software for diagnosis and treatment without the need for a hospital. Telemedicine and out-of-hospital healthcare looks to be booming and the pandemic has accelerated this shift. As a result, ResMed has benefitted and is aiming to serve 250 million patients through its products by 2025. An ambitious growth strategy that is well within reach for the company. Both sleep & respiratory care, and their SaaS offering has seen steady growth in the past few years and all our estimates point towards ResMed being a good investment in the long-term.
GR Engineering is another firm that looks like it is revolutionising an industry by changing how things are done. The mining industry requires a significant number of operations that have to be completed before a firm can commence mining. GNG does it for these mining firms. GNG can be contracted by mining firms to perform studies, construct, design, and expand plants, etc. The ability to contract and outsource these operations significantly reduces costs – both fixed and variable for mining companies. GNG has already completed quite a few projects and also has many lined up. Stable financial health and potential for high growth makes GR Engineering an idea stock to hold on to in a long-term portfolio.
The importance of buying and holding stocks for the long term cannot be overstated. At Shares in Value, we focus on long-term investment strategies when picking stocks for our portfolios. Our team of analysts fundamentally analyse companies by looking at all the different metrics that determine profitability, past performance, and financial health and add new stocks to our portfolios every week.