“Never” is a strong word to use when it comes to investing. After all, the fortunes of all stocks are continually in flux. It pays to not get too comfortable.
Notwithstanding this, there are a few UK shares I wouldn’t want to sell unless I really, really had to (or a seriously better alternative came along).
Hated FTSE 100 stock
On a possibly controversial first note, I’d be very reluctant to jettison Scottish Mortgage Investment Trust (LSE: SMT). Yes, you read that right.
Despite enduring an awful time of late, it would be brave to suggest that the fund has already seen its best days.
To think this way is to go against the idea that economies will never return to form and industries can never be disrupted by new entrants that tear up the map. It’s the latter that the fund seeks to own.
Naturally, it could still take time to see a reversal in SMT’s fortunes. Inflation remains stubbornly high, pushing central banks to keep raising interest rates. That’s never good news for daring growth stocks that feed on economic optimism and, admittedly, some degree of hype.
That’s why it’s important to look at performance over the long term (at least five years, preferably longer). On this timeline, the trust has been a clear winner with its early backing of eventual mega-caps like Tesla paying off handsomely.
I’m keeping the faith.
Niche winner
FTSE 250-listed Games Workshop (LSE: GAW) also makes the cut.
It strikes me as one of those rare businesses that truly has an economic moat — qualities that mean it can continue to outperform peers over many years.
True, fantasy games won’t be everyone’s cup of tea (including mine). However, Games Workshop undoubtedly has a captive audience of fans willing to shell out for the latest sets/merchandise.
All this makes for some solid fundamentals. Margins, for example, are sky-high. And if balance sheets were measured on attractiveness, this balance sheet would be a catwalk model.
The same goes for returns on capital employed — essentially, what the company gets back for what it puts in. It’s things like this that compound value and leave shareholders with wonderful outcomes.
The cost-of-living crisis may still hold back trading for a while. With its valuable IP and many avenues left to exploit it however, I can see myself staying invested “forever”.
Down… but not out
A final FTSE stock I’d be loathed to part with is one that hasn’t actually performed that well for me.
Vimto-maker Nichols (LSE: NICL) has been in my portfolio for quite a few years. The share price hasn’t exactly gone where I wanted it to over that time.
So why do I hang on? Well, it’s another great business, albeit one that’s faced numerous headwinds. None of these have really been of its own making. Think pandemic. Think high inflation. These things are temporary.
Again, the balance sheet is a thing of beauty. The dividends regularly chucked out have gone some way to compensate for the share price struggles too.
As a long-term investor, this is the kind of stock I want to own. It’s a solid company that sells products people habitually buy.
It will take time, but I’m confident Nichols will recover.
