One of the biggest advocates of buy and hold investing is legendary investor Warren Buffett.
By using the strategy Mr Buffett has generated significant returns, leading to his net worth growing to be an estimated US$87 billion today. This is an increase from approximately US$66 billion a decade ago.
But it isn't just Buffett that has grown his wealth over the last decade. Long term shareholders of Altium Limited (ASX: ALU) have also done incredibly well.
During the last 10 years, the design software provider's shares have provided investors with an average total return of 56.2%.
To put that into context, this level of return means that if you had invested $25,000 into Altium's shares 10 years ago, it would have grown to be worth a staggering $2,161,000 today.
Altium isn't the only share that would have generated incredible returns. The shares of leading fund manager Magellan Financial Group Ltd (ASX: MFG) have performed even better and provided an average annual return of 59.1%.
Which means that a single $25,000 investment in Magellan's shares 10 years ago would have grown to be worth over $2.5 million today.
Where else could you have invested?
While there are very few shares that have performed as well as Altium and Magellan over the period, there are a good number of well-known shares that have still generated significant wealth for long-term shareholders.
The likes of Breville Group Ltd (ASX: BRG), Domino's Pizza Enterprises Ltd (ASX: DMP), REA Group Limited (ASX: REA), and TPG Telecom Ltd (ASX: TPM) would all have turned a $25,000 investment 10 years ago into at least $500,000.
What now?
Whilst returns of this nature are certainly not the norm, I believe it does demonstrate that if you invest in quality companies with strong growth potential and hold on for the long-term, you have the potential to grow your wealth considerably.
