ASX 200 shares continue to bounce back strongly in June. However, we’ve seen a minor wobble this week as the S&P/ASX 200 Index (ASX: XJO) has fallen lower for 2 consecutive days, and is down almost 3% this morning.

Despite this, things are still looking relatively good in global share markets. Strong money supply and general optimism about 2021 are pushing share prices higher.

It’s easy to get distracted by short-term market movements. It’s important to keep an eye on the prize – building a long-term investment portfolio.

Here are a few ASX 200 shares that I think are worth buying and holding for decades into the future.

3 ASX 200 shares to buy for the long-term

When investing for the future, I like to think of some key themes that will be important. After all, future trends will drive the economy and that will be led by top ASX companies.

I think Commonwealth Bank of Australia (ASX: CBA) is one share to buy for the future. CBA is Australia’s largest bank and has historically been a dividend staple of many Aussie portfolios.

There’s a lot of talk around disruption and the rise of the neobanks. While neobanks may continue to capture market share, I think the big four will be hard to dislodge.

CBA isn’t the only ASX 200 share that is looking tough to dislodge in its industry. I like the look of NextDC Limited (ASX: NXT) as a leader in the data storage and security industry.

NextDC looks to be laying the platform for future growth right now. The Aussie data storage group recently raised $672 million from investors to develop more data centres around Australia.

Another ASX growth share that I think is set for more growth is Polynovo Ltd (ASX: PNV). Polynovo’s proprietary NovoSorb BTM product continues to go from strength to strength. In fact, the Polynovo share price has rocketed 3,050% in the last 5 years and more than doubled in the last 12 months.

Foolish takeaway

These are just a couple of the ASX 200 shares I think will be strong companies in the decades ahead and are well worth considering today as long-term buys.

More reading

• Is ‘sell’ really a dirty word? How to know when to let go of your ASX shares
• Why the AFIC share price could be cheap today
• Woolworths facing fresh threat from Amazon.com
• Is this the start of a second COVID-19 share market crash?
• Is this why the NAB share price could be cheap today?

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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With ASX shares now getting a grip on their earnings following the recent crash that left most of them oversold, it’s time to take stock of what the current ‘recalibration’ means for the overall market. The end of the financial year is looming large, and with the S&P/ASX 200 Index (ASX: XJO) up around 35% since falling to 4,546 points on 23 March, there’s no better time to review the ASX shares in your portfolio.

Cutting your losses on non-performing shares is never easy. What makes it doubly hard is broker aversion to the S-word, with their recommendations typically gyrating between ‘buy’, ‘hold’, and ‘accumulate’.

But sometimes it simply pays to bite the bullet and take a loss. This, incidentally, can have some favourable tax considerations: notably the ability to offset losses against future gains. On the flipside, an attempt to avoid paying tax on a capital gain is insufficient reason not to sell a stock when you should.

Take gains off the table while you can

But it’s not only the rotten apples that you should consider selling down. Sometimes it’s equally important to know when to lock in some profit. That doesn’t necessarily mean existing a quality stock completely.

For example, many shares have seen major gains recently. One strategy for shareholders could have been to reduce their stake, and potentially buy back in following a share market correction, or via corporate activity. Due to a slew of recent capital raisings, some shareholders have been able to offload shares only to top up their holding at attractive discounts to the current price.

Admittedly, there’s nothing wrong with letting your profits run, especially if future upside is yet to be factored into the price. However, savvy investors know when to take profits before prices potentially fall.

The art of selling shares is also considerably less predictable than buying, so it pays to have a solid strategy.

Do your reasons for selling stack up?

Shares that have enjoyed a strong run up may start to look decidedly overheated. This often triggers smart investors to sell out at a price they perceive to be close to the top. While calling the top (or bottom) is something even most professional investors struggle with, one tell-tale sign that the price is looking decidedly ‘toppy’ is how far it rallies above any reasonable estimate of value.

One of the investment truisms coined by Warren Buffett is that the share price cannot continue to outperform the underlying business forever. At some point, something has to give. Unless there are future upsides to current valuations, the closer a company’s share price gets to its intrinsic value, the greater the potential risk of holding onto the stock.

So when the share price runs way ahead of value and for no justifiable reason, don’t get too greedy and don’t simply rely on raw exuberance or momentum. Equally important, remember that it’s over the short-term that the gap between the share price and the underlying performance of the business will be at its widest.

If you’re unsure of where a share price is heading, ask yourself this: If a stock trades at $10 today, while the intrinsic value is $20, do you expect the price to rise to $25 next year, and maybe $35 three years later? Can you afford to wait? If the answer’s yes – consider holding. If not – consider selling.

While it’s not rocket science, the conclusion you come to should be based on research into future valuations, rather than an educated hunch.

Take the money and run

You may also think about selling-down stocks that are starting to slip into what’s known as value-trap territory. Typical candidates include former share market darlings. While their best days might be behind them, these ASX shares can still attract investors due to their sheer size, dividend history or an instantly recognisable household brand.

Remember, shares that appear to be under-priced have typically become that way for good reason. For example, bad management, declining business performance, declining competitive edge (due to regulatory or technological change), excessive debt, an over-priced acquisition, or an unaffordable dividend payout ratio.

These factors will result in declining intrinsic valuations and future growth that’s less promising. This will eventually find its way to the share price. Unless you sell these stocks, they will continue to drag down the value of your overall portfolio.

The trick is to take these suppurating time-bombs – which, I’m sorry to tell you, are destined to be liquidated, enter receivership or administration – out of your portfolio before they do greater damage. Before they do, why not deploy what value is left in these lame shares into the market’s next best opportunities.

More reading

• 3 ASX 200 shares to buy and hold for decades
• Why the AFIC share price could be cheap today
• Woolworths facing fresh threat from Amazon.com
• Is this the start of a second COVID-19 share market crash?
• Is this why the NAB share price could be cheap today?

Motley Fool contributor Mark Story has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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The TPG Telecom Ltd (ASX: TPM) share price is dropping lower on Friday despite making an announcement this morning.

At the time of writing the telecommunications company’s shares are down almost 3% to $7.83.

What did TPG Telecom announce?

Last month when the telecommunications company released an update on its proposed merger with Vodafone Australia, it revealed plans to pay shareholders a fully franked cash special dividend prior to the completion of the merger.

At that point the company wasn’t able to say how much it would be paying to investors. But that has changed today, with the company revealing the quantum of the dividend it plans to pay if the merger goes ahead as planned.

According to the release, TPG Telecom plans to pay a fully franked special dividend in the range of 49 cents per share to 52 cents per share. While this equates to a generous 6.1% to 6.45% dividend yield based on its last close price, it has fallen short of expectations.

Goldman Sachs was forecasting a 67 cents per share special dividend, while UBS had suggested a dividend no lower than 60 cents per share would be declared.

Investors that own shares on the record date of 1 July 2020 will be eligible to receive this dividend, which will be paid at a yet to be determined date prior to the implementation of the merger.

What now?

TPG Telecom will be holding a scheme meeting and extraordinary general meeting on 24 June 2020.

At this meeting, which will be held online because of the pandemic, shareholders will be voting on its proposed merger with Vodafone Australia.

Though, this vote looks to be a formality. The market appears to universally see the merger as the best way for the two telcos to take on industry giant Telstra Corporation Ltd (ASX: TLS).

More reading

• Can this ASX dividend share afford its 11% yield?
• The TPG share price is on the up. A good long-term buy today?
• ASX 200 Weekly Wrap: ASX bulls crash through 6,000 points
• These were the worst performers on the ASX 200 last week
• Top broker tips the Vocus share price to zoom higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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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