One investment strategy that legendary investor Warren Buffett has utilised throughout his career is buy and hold investing.

This strategy involves investors buying shares in quality companies which have positive long term outlooks.

Investors will then hold onto them for as long as the investment thesis remains intact, which allows them to benefit from compounding.

The good news is that there are plenty of shares on the S&P/ASX 200 Index (ASX: XJO) which I think would tick a lot of boxes for someone like Buffett.

Three ASX shares that jump out at me are listed below:

CSL Limited (ASX: CSL)

The first ASX share which I think Warren Buffett would approve of is CSL. It is one of the world’s leading biotherapeutics companies and arguably Australia’s highest quality business. I’m a big fan of the company due to the strength of its portfolio of therapies, its expansive plasma collection network, and its heavy investment in research and development activities. Combined, I believe the company is well-positioned to continue growing its earnings at a strong rate for the foreseeable future.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Another top buy and hold option to consider is Domino’s Pizza. I think it would tick a lot of boxes for Warren Buffett, especially given his exposure to the industry through an investment in Restaurant Brands International. I like Domino’s due to its strong brand, in demand offering, and its bold growth plans. Over the next five years the company is aiming to deliver annual same store sales growth of 3% to 6% and annual organic new store additions of 7% to 9%. I expect this to underpin strong earnings growth for many years to come.

REA Group Limited (ASX: REA)

A final share that I believe Warren Buffett would like is REA Group. I think the realestate.com.au operator is a quality buy and hold option. This is due to its market-leading position and its incredibly resilient business model. And while trading conditions are likely to be tough in the near term, I believe it is worth focusing on the long term. When the headwinds it is facing ease, I expect its earnings growth to accelerate.

More reading

• Is 2020 a good time to get a credit card?
• How to turn $20,000 into $275,000 in 10 years with ASX 200 shares
• Should you buy ASX shares or hold cash right now?
• Are Macquarie Group shares worth investing part of $3,000 into this June?
• What the 10 largest companies in the world have in common

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited and REA Group 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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ASX dividend shares could be key for retirees to be able to fund their lifestyle in the future.

Assets like bonds and term deposits don’t offer much income any more. Official interest rates have been pushed very low.

I think ASX dividend shares can be the answer because they can generate bigger profits.

Here are three ideas to look into for income:

Rural Funds Group (ASX: RFF)

Rural Funds is a farmland real estate investment trust (REIT). It has a diverse farm portfolio including almonds, macadamias, cattle, cotton and vineyards.

There is always going to be demand for food, so Rural Funds should always be able to find a quality tenant for its farms. At the moment its weighted average lease expiry (WALE) is longer than 10 years right now, so there is a lot of income visibility as an ASX dividend share for retirees.

It only has large businesses as tenants like Select Harvests Limited (ASX: SHV), Treasury Wine Estates Ltd (ASX: TWE) and Olam.

Rental indexation is built into all of its contracts, which is linked to either a fixed 2.5% increase or CPI inflation, plus market reviews.

As an ASX dividend share for retirees it has a solid FY21 yield of 5.5%. The most attractive thing could be that management aim to increase the distribution by 4% every year.

Brickworks Limited (ASX: BKW)

Brickworks is a very reliable option for income in my opinion. It hasn’t decreased its dividend for over 40 years. There aren’t many ASX dividend shares that could claim to be as reliable as Brickworks.

There are three great divisions to Brickworks. It has a building products business that has been around for decades. It’s the leading brickmaker in Australia, but it also has other attractive businesses involved in roofing, precast, masonry and cement.

The building product division was recently expanded with acquisitions in the US. It’s now the market leader in the north east of the country.

It has a large holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares, which is seen as one of the most reliable, durable businesses on the ASX. Soul Patts itself is a great ASX dividend share for retirees.

Finally, Brickworks has a stake in a growing industry property trust along with Goodman Group (ASX: GMG). It is steadily growing its net rental profit with more completed properties and steady rental growth.

Brickworks has a grossed-up dividend yield of 5.1%.

APA Group (ASX: APA)

The infrastructure giant has been one of the best ASX dividend shares for retirees this century. It has grown its dividend every year for the past decade and a half. Few shares on the ASX have a distribution growth record going back before the GFC.

It owns a vast network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets worth more than $21 billion and delivers half the nation’s natural gas usage.

The ASX dividend share funds its distribution purely from its cashflow each year, which is steadily growing as new projects come online. It currently has a FY20 distribution yield of 4.4%.

Foolish takeaway

For retirees, each of these ASX dividend shares have very reliable income prospects over the coming years. Their share prices are likely to move up and down quite a bit, but the dividends should be reliable. At the current prices I’d probably go for Brickworks first.

More reading

• What ASX shares should you invest in during a bull market?
• Telstra shares and 2 other ASX companies to buy in a low-interest rate world
• Will the HomeBuilder stimulus boost ASX 200 building shares?
• Have $10,000? This is where I’d invest it into ASX shares
• 3 high yield ASX dividend shares to buy right now

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 Brickworks, RURALFUNDS STAPLED, Treasury Wine Estates Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA Group. 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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ASX shares are a great way for a beginner to start building their wealth.

Unlike property which takes tens of thousands of dollars to start investing, you can start with ASX shares with as little as $500.

Here are three ASX shares I’d buy as a beginner investor:

Vanguard MSCI Index International Shares ETF (ASX: VGS)

The easiest way to invest may be to just invest in the entire global share market in just one investment.

Vanguard is a world leader in providing exchange-traded funds. The idea is that Vanguard is owned by the investors and it shares its ‘profits’ by lowering steadily lowering fees.

This ETF is invested in over 1,000 businesses across the world. It’s invested in businesses like Alphabet (Google), Microsoft, Amazon, Nestle, LVMH, Unilever, SAP, Toyota and so on. It’s not focused on shares on the ASX. 

It’s the type of investment that could be your only investment for many years. It pays a decent dividend and only has a management fee of just 0.18%, which is very cheap for such a diversified product.

Future Generation Investment Company Ltd (ASX: FGX)

I think everyone should take an interest in Future Generation. It’s a philanthropic listed investment company (LIC) that donates 1% of its net assets each year to youth charities. It amounts to millions of dollars every year.

The LIC invests in fund managers who work for free for Future Generation. It’s a great system. It offers excellent diversification with how many different funds it’s invested in, which each represents a portfolio of ASX shares. The shares it’s invested in are generally smaller, so they have more growth potential.

I also like that the LIC has the potential to outperform when the market is falling with the cash it’s holding.

An attractive portion of the returns come to investors in the form of fully franked dividends from Future Generation.

MFF Capital Investments Ltd (ASX: MFF)

MFF Capital doesn’t invest in ASX shares, it invests in some of the best shares in the world like Visa and Mastercard.

Chris Mackay has expertly guided the globally-focused LIC to be one of the best performers over the past decade. I think MFF Capital can continue to be a long-term performer by the focus on quality and reasonable valuations.

MFF Capital is growth-focused, so I think it suits beginners well because you don’t need big income to start with.

Foolish takeaway

I think each of these ASX shares would be a good way for beginners to start investing with their diversification and solid historical performances. At the current prices I’m more drawn to MFF Capital and Future Generation than the Vanguard ETF.

More reading

• What ASX shares should you invest in during a bull market?
• Is the global share market in a bubble?
• Have $10,000? This is where I’d invest it into ASX shares
• Why it’s a good week to buy international shares
• Should your share portfolio actually be 50% cash right now?

Motley Fool contributor Tristan Harrison owns shares of FUTURE GEN FPO and Magellan Flagship Fund Ltd. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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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