Telegraph Money

The week's most important personal finance news, analysis and expert advice, from pensions and property to investment ideas and savings tips.

How to find the ‘holy grail’ of investments

Most people will say that investing is all about timing. You have to buy in at the right time and hope circumstances don't force you to sell out before you can bank a tidy profit.
But for those of us who don't want to be checking share prices constantly, there is a much more hands-off approach favoured by some of the world's most successful investors: simply buy the best companies in the world and hold onto them forever.
This is the preferred method of many top managers, including Terry Smith, Nick Train and Warren Buffett, and could provide a valuable source of income throughout a lifetime. Even better, you save money on transaction fees by buying and selling less often.
But the rub is, how do you identify these "forever" stocks, the holy grail of long-term investors? We asked the experts for their picks of the stocks they would be happy to keep in their portfolios if they were never allowed to trade them.
From GlaxoSmithKline to Amazon, the consistent link was that the business should have an edge over its competitors, make something that is hard to replicate and fit within a growing sector. There were reliable FTSE stalwarts, such as the National Grid, and new-age technology companies, such as Adobe, appealing to younger investors keen to place their bets on the big names of the future as well as older ones wanting stability and income in retirement.
For those of us who have a shorter-term goal and don't want to hold on to our picks forever, the current lockdown has created some tempting opportunities, as certain companies are set to receive a boost from the changing circumstances.
Apart from seeking out the stocks to hold forever, we also took a look at which others are likely to grow the most within a six-month, 12-month and three-year time horizon.
Some are tipped as their share price has taken a hit in the Covid-19 crisis and analysts expect them to rebound quickly. But not all stocks that look cheap at the moment will fare so well.
On the news last week that airline Easyjet and cruise company Carnival will be dropped from the FTSE 100, experts warned investors not to try to cash in on the fall. They may be household names, but always make sure to check the levels of debt a company has and the strength of its cash supplies before jumping on a so-called bargain.
You can always find more news and advice at Telegraph Money. Subscribe now and try your first month for free.

Top stories

Moral Money

Your money

Best of the rest

Here's what our readers said

In our comments section, A C H Melchett said of Over-65s cause ‘dysfunctional housing market’ by living in large family homes: "It's not just stamp duty, although that is a major sticking point. My mother falls into this category, still living in the family home on her own. But, as she has repeatedly said, moving is simply too expensive, and move to where? Much of the new housing stock consists of poor quality shoe boxes which she has said she sees no reason to spend large sums of money on when she is comfortable in her own surroundings with friends and neighbours nearby."
Join the conversation here