How I’d choose the best ASX shares I could hold for 10 years

A 10-year share is a different kind of investment.

It needs more than a good-looking valuation or a strong recent update. It needs a business case that can survive changing markets, different economic cycles, new competitors, and the occasional period when investors lose interest.

That is why I think the best question is not simply whether a share looks cheap today. I would ask whether I can still imagine the business being larger, more useful, and more valuable in a decade.

Here is how I would approach choosing ASX shares for the long term.

I’d look for a job that needs doing

The first thing I would want is a business that solves a problem customers keep facing.

That could be a bank helping households and businesses move money and access credit, a healthcare company improving patient outcomes, a software provider making daily operations easier, or an infrastructure owner connecting people, energy, goods, and data.

The exact industry is less important than the usefulness of the product or service.

A company with a clear job to do has a better chance of staying relevant. If customers rely on it, budget for it, and return to it, the business may have room to keep compounding.

This is why I like thinking about demand before thinking about the share price. A lower valuation can help, but the business still needs a reason to matter.

I’d favour businesses with room to reinvest

A good long-term share should have ways to put money back to work.

That might mean opening new stores, building new data centres, launching better products, acquiring sensible assets, expanding overseas, improving technology, or deepening relationships with existing customers.

The best companies do not simply earn profits. They find ways to turn today’s profits into tomorrow’s growth.

That is where I think businesses such as Goodman Group (ASX: GMG), Hub24 Ltd (ASX: HUB), and TechnologyOne Ltd (ASX: TNE) become interesting examples. Each has a clear pathway to reinvest if demand continues to grow.

For a 10-year holding, that reinvestment runway can be important.

I’d check the culture, not just the numbers

Numbers are important, but they do not tell the whole story.

A company can look attractive on paper and still disappoint if management allocates capital poorly, chases the wrong acquisitions, overpromises, or loses focus on customers.

I would want signs that management thinks like long-term owners.

That can show up in disciplined spending, sensible debt levels, clear strategy, honest communication, and a willingness to walk away from ideas that no longer make sense.

A business such as Wesfarmers Ltd (ASX: WES) is a useful example here. The company’s appeal is not only the brands it owns today. It is the way it has historically approached capital allocation, productivity, customer value, and portfolio discipline.

Over 10 years, those habits can make a meaningful difference.

I’d accept that the story will change

No 10-year investment stays exactly the same.

A company may shift into new markets, sell assets, buy competitors, change management, face new regulation, or deal with technology that did not exist when the investment was first made.

That means I would want to own businesses that can adapt.

A rigid business can look strong for a while, then struggle when the environment moves. A flexible business with strong customer relationships, good data, financial strength, and capable leadership has more ways to respond.

This is also why I would review long-term holdings periodically. Holding for 10 years does not mean ignoring the facts for 10 years. It means giving a good business enough time, while still checking that the original reasons for owning it remain intact.

Foolish takeaway

The ASX shares I would want to hold for 10 years are the ones with a clear reason to exist, room to reinvest, and management teams that can make sensible decisions when conditions change.

A long holding period gives investors the chance to benefit from compounding, but only if the business keeps earning that patience.

I think that is the real test. The best long-term shares are not always the loudest names in the market. They are often the businesses that keep becoming more useful, more efficient, and more valuable while time does the quiet work in the background.

The post How I’d choose the best ASX shares I could hold for 10 years appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Hub24 and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group, Hub24, Technology One, and Wesfarmers. The Motley Fool Australia has recommended Goodman Group, Hub24, Technology One, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.