According to research by Fidelity, as of the end of 2017 the Australian share market had provided an average annual return of 9.8% over the last 30 years.
The market generated this return despite numerous negative events including the dot.com bubble bursting and the global financial crisis.
This return means investors that put a single $20,000 investment into the market 30 years ago would have seen it grow to be worth approximately $330,000 now if they matched the market return.
I believe this demonstrates why investing with a long-term view can be incredibly rewarding.
With that in mind, here is where I would invest $20,000 in the market today:
Blackmores Limited (ASX: BKL)
While the last couple of years have been a little turbulent for this health supplements company, I am optimistic that business will return to normal shortly after supply issues impacted its performance. A recent bout of insider buying from CEO Richard Henfrey through on-market trades could be a sign that he is confident in the company’s long-term prospects in the massive Asian market.
CSL Limited (ASX: CSL)
One of the best buy and hold investment options on the local share market in my opinion is this global biotech company. Thanks to its strong core business, growing influenza business, and large pipeline of new products, I believe it is capable of growing its bottom line at a solid rate long into the future. On Thursday CSL was named as a share to buy according to leading broker Citi. It slapped a $132 price target on its shares.
NEXTDC Ltd (ASX: NXT)
Over the next decade I expect cloud computing to continue its incredible rise and lead to demand for data storage growing significantly. I believe this puts NEXTDC and its network of world class data centres in key strategic locations throughout Australia in a great position to profit. The only downside is that the market is already across this and has bid up its shares to nosebleed levels. While I remain confident that its shares will be notably higher in a few years, investors may find better entry points along the way.
Looking for more ideas for this $20,000? Then check out these blue chip stars with market-beating potential.
For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..
But knowing which blue chips to buy, and when, can be fraught with danger.
The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."
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%.
The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.
Click here to claim your free report.
Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of and has recommended Blackmores 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.