As a long-term investor, I just like the timeframe of a long time I’ve through which to take a position my Self-Invested Private Pension (SIPP).

However whereas time will be the pal of the long-term investor, it could actually additionally multiply the price of some errors.

For instance, a small-seeming annual cost or account administration payment can all of a sudden look huge when taking a 20- or 30-year view.

Listed below are three issues I believe an investor ought to search for when discovering shares to purchase for his or her SIPP, to attempt to assist time be their pal quite than their enemy.

1. Ongoing enterprise relevance

Occasions change – and so do industrial and client wants. As soon as-mighty companies fade away.

If you happen to doubt that, simply take a look on the a few of the corporations which have featured within the FTSE 100 over the previous 4 a long time.

PC maker Amstrad? Paper miller Arjo Wiggins Appleton? Trident jet producer Hawker Siddeley?

None now exist as unbiased corporations.

However different companies which were within the FTSE 100 from day one do, together with J Sainsbury, Shell, and Unilever (LSE: ULVR).

Predicting long-term enterprise developments will be tough. However some areas (like meals retail and power provision) are probably right here to remain for the long run by hook or by crook, I reckon.

So when shopping for shares for a SIPP, I believe a savvy investor will ask whether or not their goal share’s enterprise space appears to be like prone to endure over the long term.

2. A sustainably nice enterprise wants a aggressive benefit

However simply because a enterprise space endures, that doesn’t imply that particular corporations will grasp round.

To distinguish itself from rivals, a enterprise wants some type of aggressive benefit.

I believe Unilever is an efficient instance right here.

It owns a variety of premium manufacturers like Hellmann’s and Dove that assist set its merchandise other than unbranded rivals. It additionally owns distinctive merchandise reminiscent of Marmite in addition to having developed proprietary product formulations and having an enormous international distribution community.

That doesn’t essentially imply it’s a persistently robust enterprise, by the way in which. Ingredient inflation can eat into revenue margins whereas having three chief executives in underneath two years may imply that enterprise efficiency in coming months and years is unsettled.

Certainly, whereas I’d fortunately purchase Unilever shares for my SIPP on the proper price, for now the corporate is simply too expensive for my tastes given such dangers.

However the firm does illustrate in bucketloads one thing I search for when discovering shares to purchase for my SIPP: a sustainable aggressive benefit.

3. Valuation, valuation, valuation

It might appear shocking that I’m unwilling to purchase Unilever shares regardless that I like the corporate.

However most individuals wouldn’t purchase a automotive or house they preferred in the event that they felt it was not attractively priced.

For me, it’s the similar with investing. A superb enterprise doesn’t essentially equate to a great funding. In truth, it may be a horrible one. It is dependent upon what one pays to spend money on it.

That’s the reason, when assessing attainable shares to purchase, I all the time ask whether or not they’re attractively valued.