In the share market, 'growth' investors are expected to underperform 'value' investors when the market goes down, but outperform in a rising market.
I don't believe categorising investments as 'growth' or 'value' is worthwhile — I think investors should just buy-to-hold great businesses at good prices.
A trick used by many investors who seek 'growth' businesses, however, is to find the industries which are experiencing positive growth, whether that be a result of disrupting the old ways of how business is done, or via another type of natural 'tailwind'.
Australia's share market, the ASX, has a number of industries or sectors experiencing tailwind growth that is likely to continue for many years. Here are four ASX stocks to put on your watchlist today.
- Aging population: Challenger Ltd (ASX: CGF).
Challenger plays into many themes revolving around the aging population: the gradual rising of total funds in superannuation; lower interest rates; and the baby boomer generation. Challenger is Australia's leading provider of annuities (fixed income retirement products), therefore, it is in pole position to capitalise on the aging population.
- Agriculture: Bellamy's Australia Ltd (ASX: BAL).
Australian agriculture is set to boom in a big way. Unfortunately, investing directly in ASX-listed agricultural companies is a risky pastime. Fortunately, Bellamy's Australia doesn't produce its highly sought after organic infant formula products – it outsources production. This significantly de-risks the business model. While not a buy at today's prices, Bellamy's could enjoy a high level of demand for many years.
- Technology: XERO FPO NZ (ASX: XRO)
Xero is a cloud-based accounting software provider out of New Zealand. Like many other technology companies, Xero's ability to transverse international boundaries and offer a highly scalable product is the envy of the business world. And as the world continues to embrace cloud-based technologies, services like Xero's will become commonplace, in my opinion.
- Tourism: Crown Resorts Ltd (ASX: CWN)
Anyone who's travelled Australia will have an appreciation of just how lucky we are to live in such a country, with natural beauty abound. Crown's casinos complexes will tap into the surge of inbound travellers, particularly from Asia, for many years. Competitive concerns are an important consideration, so too are regulatory risks; however, Crown appears well positioned for more arrivals on our shores over time.
