One of the most effective and simplest investment strategies is buy and hold investing.
As the name implies, this strategy involves investing in shares and holding onto them for the long-term unless something material changes with the investment thesis.
It is a strategy favoured by Warren Buffett and his investment company Berkshire Hathaway. And considering the returns he has generated over the last few decades, it is hard to argue against the strategy.
With that in mind, here are three shares which I think would be great buy and hold options:
Afterpay Touch Group Ltd (ASX: APT)
I think Afterpay Touch could be a great buy and hold investment option, albeit a high-risk one. I think the Afterpay service is head and shoulders above its rivals and has a great chance of repeating its Australian success in the U.S. market. However, at least some success appears to have been priced into Afterpay Touch’s shares already, which would almost certainly mean a severe share price decline if it doesn’t deliver on expectations in the lucrative market. The good news is that Google Trends has shown strong search numbers for “Afterpay” in the United States, which appears to demonstrate that consumers are interested in the product.
Macquarie Telecom Group Ltd (ASX: MAQ)
I think Macquarie Telecom’s Cloud Services business has significant potential that makes the company a great buy and hold option. In the first-half of FY 2018 the segment delivered a 30% increase in half-year net profit, making it the company’s largest segment now. And with the seismic shift to the cloud accelerating, I remain confident that this strong form can continue in the second-half and into FY 2019. This could make it a great alternative to NEXTDC Ltd (ASX: NXT).
Xero Limited (ASX: XRO)
Like Afterpay Touch, this accounting software company is another with its eyes on the lucrative U.S. market. While its expansion into the U.S. has been slower than expected, I think investors ought to be patient as this is a marathon and not a sprint. I remain confident that the quality of its product will allow the company to win a decent share of the U.S. market in time, complementing its growing share of the ANZ and UK markets. This could make it worth considering Xero as a long-term buy and hold option.
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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO and Xero. 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.