According to research by Fidelity, the Australian share market has provided an average annual return of 9.8% over the last 30 years.
This means that if you had invested $20,000 in the share market three decades ago, it would have grown to be worth approximately $330,000 today.
While there’s no guarantee that the market will perform as strongly over the next 30 years, I remain confident that it will continue to outperform other asset classes.
In light of this, if I had $20,000 sitting in a bank account I would consider putting it into these shares:
A2 Milk Company Ltd (ASX: A2M)
With its shares down considerably from their 52-week high, I think this infant formula and dairy company could be a great buy and hold option. Last month Goldman Sachs released a note that forecast compound annual growth of 53% for the company’s earnings through to FY 2020. I agree with this view and believe a2 Milk can achieve it thanks to its growing footprint and the insatiable demand for its infant formula products in China. As a result, at around 33x estimated FY 2019 earnings I feel its shares are great value.
Aristocrat Leisure Limited (ASX: ALL)
Another company which I think is capable of growing earnings at an above-average rate over the coming years is Aristocrat Leisure. The gaming technology company delivered an impressively strong half-year result earlier this year thanks to strong performances from its core pokie machine business and its growing digital business. The latter really caught the eye after growing its daily active user count to a massive 8.3 million people. With more key releases due out in the second half I expect this number could increase further along with the average revenue per user.
Domino’s Pizza Enterprises Ltd (ASX: DMP)
Although Domino’s delivered a full-year result a touch short of its guidance this week, I felt it was still a solid one and demonstrated why the company could be a quality buy and hold option. Management once again reaffirmed its plan to grow its network to 4,650 stores by 2025 from 2,393 at the end of FY 2018. I expect this to underpin strong earnings growth over the next decade, making the pizza chain operator’s shares an attractive investment today.
Finally, here are a few buy-rated shares that could also be great investment options for that $20,000.
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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 A2 Milk. The Motley Fool Australia has recommended Domino's Pizza Enterprises 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.