Here at The Motley Fool, we subscribe to a long-term buy-and-hold investing philosophy, making the most of the tax benefits of a Stocks and Shares ISA.
Arguably, building wealth takes discipline and time — with time being the most important variable to wealth creation.
Below are a number of investments that our contract writers have bought for the long haul and not touched since!
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
Apple
What it does: Apple designs and produces smartphones, computers and wearable devices. It also offers a range of services including apps and cloud storage.
By Harshil Patel. By some distance, the oldest stock that I own in my ISA is Apple (NASDAQ:AAPL).
Since my purchase around a decade ago, it has provided a tenfold return on my investment. That’s the equivalent of growing £1,000 into over £10,000.
When I first bought these shares, Apple was already an established and dominant technology business. It offered a double-digit profit margin, and 30% return on capital employed.
Today, it still displays similar high-quality attributes.
One of the most powerful features of Apple’s business is its ecosystem. Once a customer owns a product or two, it becomes difficult to leave. It also results in repeat sales.
New products like a VR headset could drive sales much higher over the coming years.
Bear in mind that it’s possible that smartphone users keep older phones for longer before upgrading. This could have a negative impact on earnings. Premium prices could also become a barrier to affordability.
Overall, though, I reckon this winner will keep winning.
Harshil Patel owns shares in Apple.
Associated British Foods
What it does: Associated British Foods is a highly diversified group, with a range of food, ingredients and retail businesses.
By Andrew Mackie: I bought my first tranche of Associated British Foods (LSE: ABF) at the end of 2019, just months before the Covid crash. That event was certainly a baptism of fire for me, but I didn’t panic and instead doubled down on my position. Then, in 2022, when its share price fell 20% below its Covid lows, I bought more whilst there was blood on the streets.
Although its share price has exhibited more volatility over the last three years than initially expected, I remain bullish on the company’s long-term prospects. What particularly attracts me is its highly diversified business model. When one part of the group is struggling, other parts pick up the slack. This has been all too evident recently.
Measured over a five-year period, its share price has performed poorly. However, since 2000 it has risen over 400%, excluding dividends. This is testament to the strength of its brands.
One of the biggest risks at the moment rests with its retail operations. Primark’s profit margins continue to be squeezed as a result of inflation across its supply chain. Energy and wage costs also remain elevated. If the economy does go into a deep recession, profits could nose-dive.
But as a company that has lived through several recessions, I fully expect it to recover on the other side.
Andrew Mackie owns shares in Associated British Foods.
Lloyds Banking Group
What it does: Lloyds Banking Group is a UK retail bank, and one of the country’s biggest mortgage lenders.
By Alan Oscroft. I first paid 99p for Lloyds Banking Group (LSE:LLOY) shares, back in 2015. And they’re worth less than half that today.
I’m poor at knowing when to sell. But I don’t think I made a mistake by not selling Lloyds.
By the time each crisis knocked the shares down, it was too late. It always looked like the market had over-reacted, and that the shares were better value. And I still got my dividends.
Right now, I’m looking at a stock valued on a price-to-earning (P/E) ratio of only 6.2, with a forecast dividend yield of 5.3%.
City analysts expect the financial sector to post the biggest earnings growth in the FTSE 100 this year. And they have the banks down to be key drivers of dividend growth, heading towards a new record in 2024.
There’s a risk that continued high inflation and interest rates will keep bank stocks down. But I’m thinking of buying more again.
Alan Oscroft owns Lloyds Banking Group shares.
Southern Copper
What it does: Southern Copper is involved in various aspects of copper production. Its operations are based in Peru and Mexico.
By Stephen Wright. As the name suggests, Southern Copper (NYSE:SCCO) is a copper producer. I’m optimistic on the outlook for copper in general and for this company in particular.
Over time, I expect the shift away from fossil fuels and towards renewable energy to accelerate. And I think that this is going to mean the demand for copper is going to be strong.
Southern Copper has some of the lowest costs of any copper producer. This, in my view, is important for a business where the product is essentially undifferentiated.
The share price has gone up and down lately (reflecting changes in the copper price), but I’ve never thought about selling since my original purchase three years ago. I’ve bought more when I thought the price was attractive, though.
Operations based in Peru are subject to some political uncertainty and this presents a risk. But since I bought the stock, I’ve just let the cash roll in.
Stephen Wright owns shares in Southern Copper.
