Artificial intelligence (AI) is adding a lot of uncertainty to the stock market. How are particular ASX shares going to navigate industry changes in the coming years? How much will AI be adopted by households and businesses for particular tasks? Time will tell.
It’s hard to say for sure how this will play out, including the question of the data centre roll-out (with pushback from certain communities stopping data centres from being built in their area).
I’ve deliberately focused on ASX share investments I have confidence in for the long-term, even if things do change. I can sleep well with these businesses.
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MFF Capital Investments Ltd (ASX: MFF)
Both of the businesses that I’m going to highlight can give investors sector exposure flexibility.
MFF is an investment business called a listed investment company (LIC). It has the mandate to look across the world for opportunities to invest in. That gives it a wide search zone for finding good ideas.
It’s not forced to hold a certain shares in an index, regardless of whether or not their outlook is challenging. MFF aims to own competitively advantaged businesses with good potential for longer-term earnings growth. It can buy shares it likes and sell out of businesses that it no longer wants to own.
This strategy has resulted in MFF owning investments like Alphabet, Amazon and Meta Platforms. These are some of the businesses that are at the forefront of developing and offering AI. In other words, they could potentially be beneficiaries of AI.
Regardless of how things may change with AI, MFF can put its money towards areas of the market that it believes have a promising long-term future.
I like that it’s paying a growing dividend because that means I can benefit from owning shares and the increasing underlying value without having to sell the shares.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is another ASX share that I have a high sense of security with.
It’s an investment house that has been operating for 120 years. Over the years, it has divested a number of its holdings, but it has also made numerous investments to diversify its portfolio.
I like the ASX share’s portfolio with how it’s invested in a number of areas that are fairly unrelated to AI and technology. It’s invested in areas like resources, telecommunications, agriculture, swimming pools and more. The company is also invested in a uranium miner, which could benefit from the growth in energy demand.
The business has already been around for decades and I think it will be around for decades to come thanks to the investment flexibility and how it focuses on assets with defensive cash flows.
Soul Patts also steadily grows its dividend for shareholders, which is a pleasing way to remain invested for the long-term in the business and benefit from increasing profits without needing to sell any shares.