With the market sell-off last week, this can actually provide investors with a good opportunity to buy some high-quality companies at more favourable share prices.
In this article, I'll take a look at 4 of my top picks. Keep in mind, it's always a good idea to expand your portfolio over time to ensure you have sufficient market diversification and not too much portfolio weighting in any one share.
Macquarie Group Ltd (ASX: MQG)
Macquarie is a global financial services business with a core focus on international investment banking. It has been an Australian success story, with a strong track record of profitability over the last few decades.
Macquarie continues to grow its revenue and net profit while its cost-to-income ratio has been steadily declining over recent years.
I think Macquarie a great choice for both growth and income, and I believe it's well placed to outperform the ASX 200 over the next 5 to 10 years.
It also currently pays an attractive dividend yield of 4.5%.
Wesfarmers Ltd (ASX: WES)
Wesfarmers is a highly diversified business with operations in general retail segments including home improvement and outdoor living, as well as industrial segments with operations in chemicals and energy. Wesfarmers subsidiaries include household names such as Bunnings Warehouse, Kmart Australia and Officeworks.
Diversification across a very broad spectrum of the Australian economy is Wesfarmers' core strength, as it provides a buffer to any industry-specific challenges.
Wesfarmers currently pays an attractive fully franked dividend yield of around 3.8%.
CSL Limited (ASX: CSL)
CSL has grown from strength to strength over the past two decades, to now become the second-largest company on the ASX.
CSL places very significant investment in research and development. This creates a pipeline of new and innovative products that provide additional revenue streams and also builds a protective barrier against market competition.
Although CSL does have a relatively high Price-to-Earnings ratio of around 47, I think it is still reasonable for such a high quality ASX share with a long growth path ahead of it.
I believe that CSL is well-positioned to continue to deliver strong earnings growth over the next decade.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts has had in place over the last decade a consistently maintained and conservative, value-focused strategy of investing in a diverse range of businesses.
The company's very clever use of diversification comes from its investment in a broad spectrum of industries, ranging from pharmacies and telecommunications to mining and building products.
It also keeps significant cash on its balance sheets, which places it in a great position to grab any worthwhile investment opportunities if they suddenly arise.
Foolish Takeaway
I believe that all of these ASX companies have excellent growth prospects over the next few years, and are better placed than most to ride out any further market volatility over the next few months.
