With interest rates at only 2.5%, Australian investors should be looking to the share market for reprieve from the woeful returns on offer in term deposits and savings accounts.
I'll be the first to admit money can be lost by investing in shares of public companies. However as is evident from the performances of those below, your winners will generally far out-weigh your losers, over the long-term.
Indeed, renowned fund manager and investing legend Peter Lynch believes a "good" investor need only be "right six times out of ten. You're never going to be right nine times out of ten."
He believed ordinary investors could beat Wall Street analysts by searching for exceptional businesses in their everyday lives. After all that's exactly what investing professionals need to do, in order to be ultimately successful.
Here are three well-known Australian companies which have smashed the return of the S&P/ASX 200 (INDEX^: AXJO) (ASX: XJO) over the past five years…
1. SEEK Limited (ASX: SEK) is the Australian online job listing portal growing throughout the world. It continues to smash profit records and recently listed its Chinese business, Zhaopin, on the New York Stock Exchange to fuel further growth. However, despite great long-term potential, much of its upside appears priced into the stock so investors would be wise to wait for a lower entry point.
2. Slater and Gordon Limited (ASX: SGH) is Australia's leading personal injury law firm. Thanks to both acquisitive and organic growth, its management has realised the future of the company lies overseas. Indeed the group's recent expansion into the UK has already proven to be a very profitable exercise. At today's prices it appears to be a good long-term buy and hold.
3. G8 Education Ltd (ASX: GEM) is a childcare owner and operator with over 422 locations across Australia and 18 in Singapore. With shares up 46% in the past 12 months, it has climbed a massive 5,000% in just five years, yet analysts are expecting very strong earnings per share growth in the near term. With its share price retreating slightly over the past few weeks, it's definitely one to keep on your watchlist.
