Combining the elements of growth and income underpins a diversified portfolio. Your good stock ideas might take some time for the story to develop, so in the meantime you want to ensure you produce some income.
If you don't, you may get anxious about your returns and switch out of stocks too soon, short-circuiting your long-term investing goals.
Be patient in choosing the right stocks, then be even more patient in allowing them to grow.
So here are two buy and hold stocks in the S&P ASX 200 Index (ASX: ^XJO) that could give you that balance for building wealth.
1) Coca-Cola Amatil Ltd (ASX: CCL)
Being the bottler and distributor of the world's most famous soft drink for Australia, New Zealand, Indonesia, Fiji and PNG, you would expect the company has business longevity. This one is more for steady dividend income. The stock yields a whopping 5.6% dividend.
The company has flagged an expected 15% earnings decrease, sending the well-admired stock downward about 20%. Long-term investors with noses for discounted prices could look past this short-term price depression and see it as a buying opportunity to begin or add to a position.
People will be drinking Coke and other soft or alcoholic beverages that it sells for many years to come. You can put your investment money to work over time with this stock.
2) CSL Limited (ASX: CSL)
As a biopharmaceutical developing treatments for blood related disorders and viral/bacterial diseases, high demand for CSL's specialised medical products drives long-term growth and builds a protective "moat" around the company's business.
The $32 billion company's stock offers a 1.8% dividend yield. However, it ploughs a majority of its earnings back into the company to sustain its expansion, research and development. The pace at which its earnings and dividends have grown in the past gives investors good hopes for future investment growth.
Coming off a fantastic 2013 when earnings were up 38%, some analysts forecast earnings to rise an average 15% annually over the next several years. This growth stock is a good choice for powering your portfolio returns in the long run.
