As I have said previously, $5,000 may not seem like a life-changing sum of money to invest each year. But if you do it consistently for a long period of time, it certainly has the potential to become life-changing.
Based on the market’s average return of 9.1% per annum over the last 30 years, according to Fidelity, $5,000 invested each year for the last 30 years would now have grown to be worth $825,000. Not bad for a total investment of just $150,000 over the three decades.
While there is no guarantee that the share market will generate the same level of return over the next 30 years, I remain optimistic that it will.
With that in mind, here are three shares that I would consider investing that first $5,000 into:
A2 Milk Company Ltd (ASX: A2M)
While in the short term I think a2 Milk Company may remain quite volatile as the bulls and the bears battle it out, in the long-term I see no reason why this fast-growing infant formula and dairy company’s shares won’t be significantly higher than where they are today. Especially with demand for its infant formula products in the China market growing at such a strong rate.
Corporate Travel Management Ltd (ASX: CTD)
Although this corporate travel manager has been on fire over the last few years, I still believe it has a meaningfully long runway for growth that makes it worth considering today. This is because the global corporate travel market is growing quickly and continues to be highly fragmented, giving the company ample opportunities to grow its market share through acquisitions. Thanks to the strong demand it is experiencing, management expects Corporate Travel Management to achieve year-on-year EBITDA growth of approximately 27.5% in FY 2018.
Lovisa Holdings Ltd (ASX: LOV)
I think that this fashion jewellery retailer could have enormous long-term growth potential. Lovisa is currently expanding its business internationally and has recently stepped foot in the U.S. market. If the expansion into the United States alone is a success, I believe it could more than double its store footprint. At present Lovisa has 152 stores (47.5% of its network) in Australia. Considering the size of the U.S. market, I believe it could have many times more stores there than it does in the relatively small Australian market.
Alternatively, you could consider investing that $5,000 into this next major investment boom.
One of the world’s richest people is sounding the alarm on what could be a trillion-dollar technology.
Everyone is talking about the artificial intelligence revolution.
Harvard Business Review calls it, “the most important general-purpose technology of our era.”
One Google Insider predicts AI, “will be as transformative as the discovery of electricity.” And it already is transforming industry after industry.
After all we have been hearing about AI for years…but it never really lived up to the hype…so what’s finally unlocked this huge tidal wave of innovation?
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia owns shares of A2 Milk. 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.