There are few ASX shares that I plan to hold til I’m 100.
The problem is that many businesses seem as though they’ll eventually become structurally challenged or at least we can’t have enough conviction in their long-term prospects.
There are two ASX shares in my portfolio I plan to hold until I’m 100, essentially forever.
Here are my two ideas:
Long-term ASX share 1: Rural Funds Group (ASX: RFF)
Rural Funds is a farmland real estate investment trust (REIT). It owns a diverse portfolio of different farm types including almonds, cattle, macadamias, vineyards and cotton.
One of the main reasons why I’m confident about holding this share for the long-term is that farmland has already been around for many centuries which should mean it’ll be okay for the next few decades. The way most of us eats food isn’t going to change any time soon. I believe that farmland is going to be integral for many years to come.
It aims to increase its distribution by 4% each year to unitholders, so that’s not exactly rocket-like growth, but it’s comfortably higher than inflation and you get a solid starting yield.
I like the Rural Funds strategy of buying properties that it can re-invest into and add productivity improvements at the farms. It’s doing this well with cattle farms at the moment.
As long as the balance sheet remains relatively conservatively geared I think Rural Funds can be an excellent ultra-long-term ASX share which keeps producing a stream of cash distributions for investors. It currently has a forward distribution yield of just over 6% which is solid in today’s low interest coronavirus world.
Share 2: Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is an investment conglomerate ASX share that has been listed since 1903. Think of all the things that it has already been through to get to this point. It’s survived through the Spanish Flu, two world wars and all the various recessions.
The conglomerate has a diversified asset base with investments in various industry like telecommunications, resources, property, building products and pharmacies.
Soul Patts regularly invests into new industries. It recently invested a sizeable amount into agriculture and it’s now looking to invest into regional data centres.
It’s already been around for a century and Soul Patts has paid a dividend every single year in that history. Its dividend is funded from the investment income it receives, where it retains some profit which it will use for future investment opportunities.
The current grossed-up dividend yield of 4.7%.
Foolish takeaway
Out the two ASX shares, Soul Patts would be my clear favourite. It’s much more diversified, has a cheaper cost structure, a much longer history and more investment flexibility. I’m looking to buy more shares of Soul Patts if it drops below an $18 share price.
There are also some great global shares that could be excellent long-term buys.
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More reading
- 3 Warren Buffett ASX dividend shares to buy right now
- 3 ASX shares to instantly diversify your portfolio
- 3 industries that may never recover from COVID-19
- Beat falling rates with these strong ASX dividend shares
- Buy these ASX 200 shares for your kids today
Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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