I’m a big advocate of buy and hold investing and believe it is one of the best ways to grow your wealth over the long term.
To demonstrate how successful it can be, I’ve picked out a number of popular ASX shares to see how much a single $20,000 investment ten years ago would be worth today.
They are as follows:
One of my favourite shares on the Australian share market is biotech giant CSL Limited (ASX: CSL). It has been a consistently strong performer over the long term thanks to the quality of its products and management team and its high levels of investment in research and development. This has led to its shares smashing the market return over the last decade with an average total return of 21.5% per annum. This means a $20,000 investment in CSL’s shares 10 years ago would be worth ~$140,000 today.
Although a poor run of form means that the Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is trading almost 50% lower than its all-time high, it has still been one of the best performers on the local market over the last decade. Thanks to its successful expansion both at home and abroad, Domino’s shares have provided an average total return of 30.4% per annum. This would have turned a $20,000 investment a decade ago into ~$284,000 today.
Thanks to a combination of increasing demand for healthcare services and its international expansion, private hospital operator Ramsay Health Care Limited (ASX: RHC) has been a great place to invest your money over the last 10 years. During the time the company’s shares have provided an average total return of 22.8% per annum, which means a $20,000 investment would have grown to be worth ~$156,000 today.
Finally, thanks to the strong growth of online property listings and its market-leading position, the REA Group Limited (ASX: REA) share price has been an impressive performer over the last 10 years. During this time the company’s shares have provided an average total return of 34.7% per annum. This means that $20,000 invested in the company’s shares 10 years ago would have grown to be worth ~$393,000 today.
Whilst I think that all these shares have the potential to be market beaters again over the next decade, I suspect that these dirt cheap growth shares could offer even better returns.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended Domino's Pizza Enterprises Limited, Ramsay Health Care Limited, and REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019