For those who are considering a decade-long vacation on a remote island (and for those who are not), it may be a very good idea to ask what investment you would be most willing to hold for this lengthy period of time. To make the question more interesting, let’s assume that there are no exits along the way.
The first thing to consider is what the world will look like in 10 years and which companies will be essential to run the economy. After that, the next important step we can take is overlaying Porter’s five forces in an effort to figure out what industry (or company) will be the most profitable. Certain choices will surprise no one.
The first name on the list is none other than Canadian National Railway (TSX:CNR)(NYSE:CNI), which has a unique footprint to move goods across the country. As the lowest-cost method to transport goods, it will be difficult for any competitor to match this operation in a cost-effective way. Instead of trying to time the market, this name can be purchased at any moment and held for at least a decade!
The second name on the list is Royal Bank of Canada (TSX:RY)(NYSE:RY), which is the largest Canadian bank. In what has traditionally been a very lucrative sector, banking will, without a doubt, be an essential part of the world in a decade from now. In addition to the current 3.6% dividend yield, investors can expect a substantial amount of upside from this name, as the barriers to entry (and expansion) remain very high in the current “compliance” climate.
South of the border, U.S. juggernaut Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL), formerly Google, remains a top pick, as the technology side of things is still evolving. In spite of not paying a dividend, the company is extremely interesting, as it continues to bring about major shifts in the marketplace. In fact, it is due to this name that insurance companies have been excluded from this list. Although many insurance segments will remain profitable, the introduction of the self-driving car will, without a doubt, have a ripple effect throughout the industry. As this is only one of the things Alphabet is doing, it remains a company that all investors should consider as a long-term hold.
The last holding on the list is HORIZNS MARIJUNA LF CL A UNT ETF (TSX:HMMJ), which, at the current time, is the highest-risk name of the bunch. As a proxy for the marijuana industry as a whole, there is inevitably going to be many failures matched by a number of incredible successes. Barring the accuracy of one’s crystal ball, this may be the best place for investors to put their money to receive a suitable return from the industry. Time will tell!