Slow and steady wins the race: five stocks to buy for the long term

Balancing quality and price is the key to successful investing, says Richard Beddard – both poor-quality stocks and overvalued top-notch ones are risky. Here are Britain’s best large and medium-sized companies

Tortoise & hare cover illustration
(Image credit: © Howard McWilliam)

Investment strategists generally posit that the higher the quality of a business, by which we mean the more profitable it is likely to be in future, the more it is worth paying for the shares. This is because future profits belong to shareholders, who will receive this future profit as dividends – or the profit will be invested back into the business to earn even more profit in the future. Investors can make above-average returns if they can find shares whose prices do not reflect their potential.

The goal of most investment analysis is to assess how much a company is worth, with a view to buying the shares for less. This is challenging in today’s markets, because low-quality businesses are difficult to value, while more predictable high-quality businesses seem expensive.

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Richard Beddard

Richard Beddard founded an investment club before joining Interactive Investor as an editor at the height of the dotcom boom in 1999. in 2007 he started the Share Sleuth column for Money Observer magazine, which tracks a virtual portfolio of shares selected for the long-term by Richard. His career highlights include interviewing Nobel prize winners, private investors and many, many company executives. 

 

Richard is freelance writer who invests in company shares and funds through his self-invested personal pension. He has worked as a teacher and in educational publishing, and is a governor at University Technology College, Cambridge. He supports the Livingstone Tanzania Trust, a charity supporting education and enterprise in Tanzania. 

 

Richard studied International History and Politics at the University of Leeds, winning the Drummond-Wolff Prize for "distinguished work in the field of international relations".