How buy and hold investing turned $50,000 into $500,000 in ten years

Arguably one of the simplest and effective investment strategies out there is buy and hold investing.

It is a strategy favoured by legendary investor Warren Buffett and for good reason. By picking up quality shares and holding onto them for the long-term, investors can generate significant returns on their investment.

Take for example the five shares listed below. Here’s what a $10,000 investment in their respective shares 10 years ago would be worth today:

ARB Corporation Limited (ASX: ARB)

The shares of this four-wheel drive vehicle accessories manufacturer have provided an average annual total return of 23% over the last decade. This would have turned a $10,000 investment 10 years ago into over $73,000 today.

Breville Group Ltd (ASX: BRG)

Over the last 10 years the shares of this appliance manufacturer have provided an average annual total return of 28.1%. This means that a $10,000 investment in the company back in May 2008 would have grown to be worth $119,000.

CSL Limited (ASX: CSL)

I think that CSL is probably the highest quality company that Australia has to offer and it certainly shows in its returns. Over the last decade the biotherapeutics company’s shares have provided an average annual total return of 18%. This would have turned a $10,000 investment into over $52,000.

Ramsay Health Care Limited (ASX: RHC)

Although this private hospital operator has been having a tough couple of years, it hasn’t stopped Ramsay’s shares from delivering strong returns for shareholders in the long-term. Ramsay’s shares have provided an average annual total return of 22.4% over the last 10 years, turning a $10,000 investment into $75,500.

REA Group Limited (ASX: REA)

This real estate listings business has been one of the best performers on the local market over the last decade, providing investors with an average annual total return of 34.2%. This means that a $10,000 investment a decade ago would be worth $189,500 today.

Foolish takeaway

All in all, $50,000 invested across these five companies would now be worth a mouth-watering $509,000.

It is also worth pointing out that I’ve picked five companies that were well known to investors at the time and were not under the radar picks like Altium Limited (ASX: ALU) and MNF Group Ltd (ASX: MNF), which have both returned an average of 47% per annum over the last ten years.

Overall, I believe this demonstrates how rewarding investing in quality can be.

If you want to try and recreate this success over the next ten years then I think these three shares would be a great place to start.

Top 3 ASX Blue Chips To Buy In 2018

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Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended MNF Group Limited. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended ARB 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.

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