The best (and by far the easiest) way to make a fortune on the stock market is to simply buy growth stocks showing plenty of promise, and then hold onto them for the ultra-long term.
By acquiring the shares when the company is in its early days of growth and remaining patient over the years – taking advantage of any dividends paid along the way – an investor can let the power of compounding do all the heavy lifting. This gives you the greatest chance at beating the returns of the benchmark S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO).
And the truth is, you don't need to spend a fortune getting your portfolio up and running. Even an initial $10,000 investment could go a very long way over the years. With that in mind, I thought I'd give you an idea of some of the ASX stocks I'd buy if I had that kind of capital to spend.
- Coca-Cola Amatil Ltd (ASX: CCL). It's been a tough couple of years for shareholders of this once-loved beverage manufacturer, but the future is still looking bright – particularly with the company now focused on greater marketing and product development. While I believe shareholders will recognise strong capital gains over the coming years, the company maintains a healthy balance sheet which should also keep those tasty dividends rolling in.
- Greencross Limited (ASX: GXL). From its current price, Greencross could be a real winner over the coming years. The company provides veterinary services across Australia and is aiming for 20% market dominance – up from its current 7.5% market share. Strong growth is anticipated and with the stock down 21% from its 52-week high, now could be a great time to make your move.
- Veda Group Ltd (ASX: VED). Shares of Australia's leading data analytics company might not seem cheap upon first glance, but the company maintains a market-leading position with strong tailwinds to drive earnings growth over the coming years. In particular, Veda looks set to benefit from the Comprehensive Credit Reporting regime which will enhance its product offering substantially.
- Shine Corporate Ltd (ASX: SHJ). Shine is one of Australia's leading damages based plaintiff litigation firms, with a particular focus on the personal injury practice area. With a strong management team, a disciplined approach to accepting cases and operating in a strong growth industry, Shine is trading on a projected P/E ratio of just 15.6x and could be an excellent bet for your portfolio in the years ahead.
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Each of the companies mentioned above have the capacity to deliver fantastic returns in the long run and deserve a position on your watchlist. However, there is another company which is posing as an even greater investment prospect right now.
