According to data compiled by Fidelity, as of the end of 2017 the Australian share market had provided an average annual return of 9.1% over the last three decades.
This means that if you had made a single investment of $25,000 into the share market 30 years ago and matched the market return, your shares would be worth over $340,000 today. I believe that this shows how rewarding long-term buy and hold investing can be.
With that in mind, here are three buy and hold investment ideas that I would consider putting that $25,000 into:
Cochlear Limited (ASX: COH)
I think that this hearing solutions company would be a great buy and hold investment option. The company estimates that there are 15 million people globally that could benefit from a cochlear or bone conduction implant. Which means that based on current industry sales, implantable hearing solutions have penetrated less than 5% of the total addressable market. I believe this gives Cochlear a significant runway for growth, especially given its status as an industry leader.
Corporate Travel Management Ltd (ASX: CTD)
I thought that this corporate travel specialist was one of the best performers on the ASX in FY 2018. Corporate Travel Management continued its strong run when it posted a 14% lift in revenue to $372.2 million and a 34% increase in underlying net profit after tax to $86 million. The good news is that I remain confident that there will be more of the same over the medium term due to recent acquisitions, its small market share, and sizeable addressable market.
Xero Limited (ASX: XRO)
This New Zealand-based accounting software company could be a great buy and hold investment. I think the growing number of users and its sky-high retention rate are a testament to the quality of its product and have set the company up perfectly for long-term growth. If the company can make a success of its U.S. expansion, then the sky really could be the limit for its shares. However, it is not going to be easy and there certainly is a lot of hard work ahead for management.
