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Have £5k to invest? Here’s a FTSE 100 stock I’d buy and hold for 10 years

Royston Wild
Two colleagues working on new global financial strategy plan using tablet and laptop.

For many of us the fear of losing our hard-earned savings is just too much to bear. It may sound melodramatic, but the numbers are there to back it up.

Given the choice of a Cash ISA or Stocks and Shares ISA, some 73% of Britons have decided to stash their savings in the cash-based product, according to latest annual data from HM Revenue and Customs.

You’re much better going with the tried-and-tested and putting your money to work in a low-risk account, right? Er, wrong. I’m not going to pretend stocks and shares investment doesn’t carry a higher degree of risk, but with the right strategy (like diversifying your holdings across a broad range of companies and sectors) it’s possible to cut that risk to a minimum.

And this is why some people have made some truly-brilliant returns from share investing.

A defensive darling

Indeed, there’s a broad range of shares on the FTSE 100 which should make even the most risk-averse person want to splash the cash. Let’s take Reckitt Benckiser (LSE: RB) as an example.

I’ve waxed lyrical about this particular stock’s impressive defensive qualities for years now. Its exceptional geographical footprint allows earnings to grow in spite of tough conditions in one or two key regions.

And Reckitt’s broad stable of labels such as Finish dishwasher detergent and Scholl footcare products can be relied upon to shift large volumes like few others.

Indeed, so well-trusted are these labels that they can be relied on to keep sales growing whatever the weather — while they’re clearly premium products they’re unlikely to break the bank, of course, meaning consumers have the wriggle room to keep spending that little extra on them if they so desire.

China syndrome

I don’t want to spend time lauding the brilliance of the company’s brands. I’m sure that you as a consumer are all-too aware of the immense attractiveness of Reckitt’s wares.

I’d rather talk about the brilliant growth opportunities afforded by its strong position in China, a region in which it’s already a big player (its Durex condom brand is the most popular among Chinese consumers).

Latest research from GlobalData suggests the number of so-called ‘affluent’ citizens in the country will more or less double between 2014 and 2022, from 28.4m to 56.6m. And through careful investment (from developing its e-commerce proposition there to buying Mead Johnson to boost its position in what is the world’s largest infant milk market) Reckitt is taking steps to supercharge profits from this gigantic growth region.

Over the past 10 years, Reckitt has provided some stunning shareholder returns on the back of some brilliant share price gains and its commitment to keep raising the dividend year after year. In that time, the total return’s clocked in at a handsome 163.3% and, clearly, there’s plenty of scope to keep delivering for its investors.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2019