Investing for the long-term makes a lot of sense to me, so I'm going to talk about three ASX shares that I think are buys and that I could own for the rest of my life.
If we own an ASX share forever, it would reduce brokerage costs and it might reduce how much capital gains tax we're required to pay along the way compared to if we had regularly sold those holdings for a gain.
Holding for the long term also means we're giving compounding the longest time to work its magic.
With that in mind, these are the three ASX shares I'd choose.
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Telstra Group Ltd (ASX: TLS)
Telstra seems to be the clear leader in the telecommunications sector, and it's adding many more thousands of subscribers every reporting period. Not only that, but mobile price increases are also leading to a growing average revenue per user (ARPU), which is offsetting Telstra's cost increases.
An internet connection seems to be becoming more important as the years go by. It's being used more for e-commerce, connecting with government services, banking, work, education, entertainment and so on.
I don't think the internet is going away – I'd suggest most households and businesses see the internet bill as an essential one to pay for beyond the foreseeable future.
I'm more confident about Telstra's ultra-long-term outlook than the shorter-term because of the chance that 5G (or 6G) could be faster and better than what the NBN can provide. That could mean that households and businesses switch en masse to wireless internet, which may enable Telstra to capture much more of the broadband profit margin (rather than paying a lot to the NBN).
The ASX share seems committed to paying appealing dividends each year, which is promising for shareholders wanting cash flow.
Rural Funds Group (ASX: RFF)
Rural Funds is a real estate investment trust (REIT) that owns farmland across Australia, in a number of sectors including cattle, vineyards, almonds, macadamias and cropping.
The business is achieving rental growth in a few different ways. Most of its tenancy contracts have rental income growth built-in, either with fixed increases or CPI-linked inflation increases, with some having occasional market reviews.
The ASX share is regularly investing in improvements at its farms, such as increased water access, better infrastructure or altering the farm type to a profitable choice, such as macadamias.
Farmland has been a useful asset for thousands of years. I think that's going to continue for decades or even centuries.
As long as management makes sure the portfolio is focused on the right commodities and ensures it doesn't take on too much debt, I think this could be a very long-term investment.
It's currently paying an annualised distribution of 11.73 cents per unit, which is a forward yield of 5.3%.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
This ASX share is the one that I'd feel most confident about holding for the ultra-long term.
It operates as an investment house, meaning it invests in other assets on behalf of shareholders.
This company has already been operating for over 120 years, so it has proven it has longevity.
It is invested in a number of sectors including resources, building products, property, agriculture, financial services, credit/bonds, electrical parts and many more.
The investment flexibility allows it to find opportunities across various sectors and business sizes. One of the most attractive features of the business is that it can invest in both public and private businesses.
I think its portfolio can still be performing well for many years from now, and paying dividends. It has grown its dividend every year since 2000 and paid a dividend each year since 1903.
This ASX share may well be my biggest position 10 years from now, 20 years from now and 30 years from now. I like that its portfolio is positioned to deliver both capital growth and dividend growth.
