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Are these the best buy and hold shares on the ASX?

Buy and hold investing is arguably one of the most successful and simplest investment strategies for investors to consider.

It is a strategy that legendary investor Warren Buffett has used for decades and with great success.

Mr Buffett has amassed an estimated net worth of US$84.3 billion largely on the back of buying quality companies with solid growth prospects and holding them for many years.

With that in mind, I have picked out three ASX shares that I believe are great buy and hold investment options right now:

Bellamy’s Australia Ltd (ASX: BAL)

Although FY 2019 looks likely to be a disappointing year for this infant formula company with minimal sales growth, I believe investors ought to look at the bigger picture. At its recent annual general meeting management reaffirmed that it is targeting sales of $500 million by the end of FY 2021. This will be a 52% increase on FY 2018’s result. At the same time, the premiumisation of its brand is expected to lead to wider margins and increased profitability. In my opinion, I think it is worth dealing with the short term pain for the long term gain.

CSL Limited (ASX: CSL)

I think that CSL could be the ultimate buy and hold investment option for Australian investors. This is because of the high quality nature of its operations and the strong growth potential of its plasma collection network, influenza business, and pipeline of future product releases. Although its shares may be a touch on the expensive side, I believe its future results will ultimately justify this premium.

Xero Limited (ASX: XRO)

Xero is an accounting software company taking on the likes of Quickbooks and MYOB Group Ltd (ASX: MYO). I’ve been very impressed at the stickiness of Xero’s product which is evident in its sky high retention rate. Combined with its strong sales growth and rising subscriber numbers, I think the company is well-positioned for long-term growth. Especially if it can crack the lucrative U.S. market. While this will not be easy, I believe the quality of the product gives it a great chance of succeeding.

And finally, this tech share could be another great buy and hold investment if you ask me.

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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 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.

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