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.
And here is another top growth share that could be worth considering next week.
Discover why this legendary Australian stock-picker just issued a “Double Down” buy alert to his exclusive group of insiders… and why he’s convinced this might be the single most attractive entry point for years to come.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia owns shares of 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.