One of the simplest and most effective investment strategies is buy and hold investing.
This strategy will see an investor buy shares of a company with solid long-term growth prospects and hold on for many years or even decades as long as the original investment thesis is intact.
It is a strategy favoured by legendary investor Warren Buffett and, given his success, it wouldn't be wise to bet against him.
Here's why I think the following three shares would be great buy and hold investments:
Aristocrat Leisure Limited (ASX: ALL)
I think that this gaming technology giant could be a great long-term investment. Although I believe its pokie machine business is one of the best around and capable of growing strongly over the next few years, it is Aristocrat Leisure's digital segment which I believe will be the key driver of growth. With 8.3 million users playing its mobile and social games on a daily basis, the recurring revenues they generate is quite staggering. And as more and more games are released, I believe the number of daily active users could rise strongly in the coming years.
CSL Limited (ASX: CSL)
I would argue that this biotherapeutics company is the best buy and hold investment option on the Australian share market. Due to the quality of its core operations, its strong pipeline of new products in development, and the success of its fledgling influenza business, I think CSL is capable of growing its earnings at a solid rate for the foreseeable future. Its shares may not be cheap, but I'm not sure there ever has been a time that they have been. Despite this they have still provided an average annual total return of 20.9% over the last decade.
NEXTDC Ltd (ASX: NXT)
Demand for data centre services has been growing at an impressive rate over the last few years thanks to the cloud computing boom. And with the shift to the cloud accelerating, I expect this demand to grow strongly for a long time to come. Which should put NEXTDC in a position to profit thanks to its world-class data centre network which is spread out across strategically important locations throughout Australia. However, its shares are trading on a sky high earnings multiple at present, which does mean there is a risk of a significant share price decline if its growth is not as strong as expected.
