Buy and hold investing sounds simple, but I think it comes down to one key idea.
You need businesses that can keep moving forward without constant intervention.
That usually means ASX 200 stocks with durable demand, strong competitive positions, and the ability to grow without relying on perfect conditions.
With that said, here are three stocks that I think fit that description.
Hub24 Ltd (ASX: HUB)
Hub24 is a business that sits quietly behind the scenes of the wealth industry.
It provides the infrastructure that advisers use to manage client portfolios, which means it benefits as more money flows into professionally managed investments.
What I find interesting is how growth compounds. It is not just about attracting new clients. Existing accounts can grow as markets rise and as additional funds are added over time. That creates a layered effect, where growth builds on itself.
I also think the shift toward more sophisticated investment platforms is still playing out. As advisers look for better technology and reporting tools, platforms like Hub24 are well positioned to capture that demand.
For a buy and hold investor, I think that steady, structural growth is appealing.
ResMed Inc. (ASX: RMD)
ResMed is a business that I think benefits from a problem that is not going away.
Sleep apnoea and respiratory conditions are widespread and, in many cases, underdiagnosed. That creates a large and ongoing pool of potential patients.
What stands out to me is how the company monetises that. It is not a one-off product sale. There is an ongoing relationship with patients through devices, masks, and connected services that support long-term therapy.
That recurring revenue element is powerful. It creates visibility over future revenue and strengthens the company’s position within the healthcare system.
For long-term investors, I think businesses tied to essential health needs can be easier to hold through market cycles.
Pro Medicus Ltd (ASX: PME)
Pro Medicus approaches healthcare from a different angle.
Instead of physical products, this ASX 200 stock focuses on software that helps doctors and hospitals interpret medical images more efficiently.
What I like here is the business model. The company typically signs long-term contracts with major healthcare providers, just like it did today, which can create a pipeline of revenue that extends well into the future.
At the same time, its technology is designed to improve workflow and speed, which makes it valuable to customers once implemented.
That combination of long contracts and high switching costs can support durability, and could ultimately underpin strong earnings growth over the next decade.
Foolish takeaway
For me, buy and hold investing is about finding ASX 200 stocks that can keep progressing over many years.
Hub24 benefits from long-term growth in managed investments, ResMed is tied to ongoing healthcare demand, and Pro Medicus provides critical software with long-term contracts and strong customer relationships.
They are different in what they do, but I think each has qualities that could make them well suited to a long-term approach.
The post Why these ASX 200 stocks could be perfect for buy and hold investors appeared first on The Motley Fool Australia.
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More reading
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- Why are Pro Medicus shares outperforming the market on Monday?
- Pro Medicus locks in 5-year, $37m Northwestern Medicine contract renewal
Motley Fool contributor Grace Alvino has positions in Hub24. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24 and ResMed. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Hub24 and Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.