A Future-Proof Portfolio
LONDON -- Long-term buy and hold is perhaps the central tenet of Foolish investing. But, as I discussed last week, often it can often go wrong.
As a follow-up to last week's article, I decided to think about the companies that are most likely to stand the test of time. If I was to compile a future-proof portfolio, what would I put in it?
My first choice is Swiss pharma Roche (NASDAQOTH: RHHBY.PK). I knew I was certain to pick a pharmaceutical company, but I wasn't sure which one. But Roche gets my vote, as it is the most forward-looking of the big drugs companies.
Roche is driving forward the boundaries in new and emerging areas such as biologics, diagnostics, stem cells and gene sequencing. For me it really represents the future of the pharmaceutical industry.
"But what of patent cliffs?" I hear you cry. It is true that some drugs firms -- for example, AstraZeneca -- are facing particularly terrifying patent cliffs.
Roche's patent cliff is the smallest in the industry. It has a strong portfolio of current medicines such as Xenical, Avastin, and Herceptin, plus a bubbling pipeline of new products in development, with a particular strength in the booming area of cancer treatments.
Despite the worries over patent cliffs, the continued increase in health-care spending around the world suggests that pharma -- once it gets its act together -- actually has a great future.
My second choice is Anglo-Dutch consumer goods company Unilever (ISE: ULVR.L) . Again, I knew I'd choose a company in this sector, but it was difficult to say which one.
I've picked Unilever because, firstly, it has some of the most famous brands in the world, from Lynx and Persil to Hellmanns and PG Tips. Secondly, it has an enviably strong position in emerging markets such as Brazil and India, which represent the future for consumer goods companies. And thirdly, it has a track record of growing decade after decade. I think it really says something that a company more than 80 years old can still increase sales by 11% year on year.
Consumer goods companies are popular with investors because they have a tendency to grow steadily and consistently and are relatively unaffected by changes in fashion and technology. After all, whatever technological advances take place in the future, people will always use soap, margarine, and washing powder.
My third choice is perhaps less obvious and more left-field. I have gone for NCC Group (ISE: NCC.L) .
Who? Well, NCC calls itself an "information assurance company." It basically provides a range of IT security services to companies. I see it as developing into the IT equivalent of an accountancy firm.
Of course buying into a tech company is risky. Warren Buffett is famous for studiously avoiding tech companies, because technology changes so fast that tech giants that once ruled the world can suddenly be brought to their knees. But I think it is no coincidence that the only tech company the Oracle of Omaha dared to buy into was IBM -- an IT services company. Buffett and I agree that whatever the future holds for technology, the likelihood is that there will be increasing demand for IT services.
I feel that NCC's service approach and its ambition to expand around the world means it will have a strong and growing business for decades to come.
Warren Buffett has long been renowned as the world's best investor. As an American, he has tended to buy U.S.-based companies, but one company has drawn him across the Atlantic to the U.K. Want to know which company this is? Read our free report on the "One UK Share That Warren Buffett Loves."
Oils, pharmaceuticals, banks, telecoms -- just where should you invest today? "Top Sectors for 2012" is The Motley Fool's latest guide to help Britain invest. Better. The report is free.
More investment opportunities from The Motley Fool:
The article A Future-Proof Portfolio originally appeared on Fool.com.Prabhat does not own shares in any of the companies mentioned. The Motley Fool owns shares of International Business Machines.Motley Fool newsletter serviceshave recommended buying shares of Unilever.Motley Fool newsletter serviceshave recommended creating a synthetic long position in International Business Machines. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.