According to data compiled by Fidelity, as of the end of June 2018 the Australian share market had provided an average annual return of 9.2% 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 investment would now be worth over $350,000.
I believe that this return demonstrates 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 $25,000 into:
Altium Limited (ASX: ALU)
When looking for buy and hold investments the first thing I’ll do is check that the company has a long runway for growth. That is certainly something that this award-winning printed circuit board (PCB) design software provider has thanks to the Internet of Things boom and its aim to achieve market leadership in PCB design by 2020. I feel confident that the company will achieve this, putting it in a position to continue its strong earnings growth over the next decade.
Aristocrat Leisure Limited (ASX: ALL)
Another company that I think has a long runway for growth is Aristocrat Leisure. Whilst the leading gaming technology company is best-known for being the designer and manufacturer of some of the most in-demand pokie machines in the world, I think its exposure to the social and mobile gaming market will be the key driver of growth over the next decade. At the last count the company’s Digital segment had 8.1 million daily active users each generating 40 U.S. cents of revenue per day. Due to release of several new games and a significant increase its user acquisition spend this year, I believe FY 2019 could be a big year for the segment.
ResMed Inc. (ASX: RMD)
I think that this sleep treatment company could be another quality buy and hold investment option. Over the last decade ResMed has grown its earnings by an average of 16% per annum. Unsurprisingly, this strong earnings growth has made it a very rewarding investment for shareholders. During the period its shares have provided an average total return of 19% per annum. The good news is that the company looks to be well-positioned to continue its solid earnings growth for the foreseeable future thanks to the expected growth of the sleep apnoea device market and the quality of its products.
These 3 stocks could be the next big movers in 2020
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*Returns as of 6/8/2020
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended ResMed Inc. 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.