With rates likely to stay on hold until as late as mid-2019, I think investors ought to consider skipping savings accounts and look to the share market for stronger returns.
After all, even after a decidedly rocky patch the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has provided a return of around 5.5% excluding dividends over the last 12 months.
This is superior to anything you would get from a savings account or even term deposits.
With that in mind, if I had $10,000 sitting in a savings account I would consider investing it in one of these three shares:
Blackmores Limited (ASX: BKL)
This health supplements company has underperformed in FY 2018 and this has been reflected in its disappointing share price performance. I believe a lot of the issues that Blackmores has been suffering from are only short term and that FY 2019 will be far more successful. In light of this, I feel its recent share price weakness could be an opportunity to make a patient buy and hold investment at an attractive price.
ResMed Inc. (CHESS) (ASX: RMD)
I think that this sleep apnoea and chronic respiratory disease treatment specialist is arguably one of the best buy and hold investment options on the local share market. Last month ResMed delivered yet another impressive quarterly performance when it posted a 32% increase in quarterly profit to US$132.5 million. With the sleep treatment market expected to grow meaningfully over the next decade, I think there could be many more solid quarters like this over the coming years.
Webjet Limited (ASX: WEB)
Earlier this month the Australian Bureau of Statistics released its latest tourism data which revealed that the inbound and outbound tourism boom continues unabatedly. I think this is great news for travel bookers like Webjet which are likely to be experiencing solid organic growth in bookings. And with the shift to online booking continuing, Webjet could be in a position to grow at an above-average rate. This certainly was the case earlier this year when it delivered an impressive 45% increase in half-year net profit after tax before acquisition amortisation from continuing operations.
Looking for the next Webjet? I think one of these shares has the potential to be the next growth star of the ASX.
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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 Blackmores Limited. The Motley Fool Australia has recommended ResMed Inc. and Webjet Ltd. 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.