With interest rates at ultra-low levels and unlikely to improve any time soon, if I had $10,000 sitting in a bank account I would consider putting it to work in the share market.
After all, as of December 31, research by Fidelity shows that the Australian market has provided an average return of 9.1% per annum over the last three decades.
Three shares that I believe could provide returns of this level or better over the long term are listed below. Here's why I would invest $10,000 into them:
Appen Ltd (ASX: APX)
According to a recent presentation, Appen's management team expects the artificial intelligence market to grow to be worth up to US$191 billion by 2025. Approximately 10% of this is expected to relate to the data labelling which Appen is involved in. Due to its industry leading position and recent acquisitions, I believe the company is well-positioned to capture a growing slice of this massive market in the coming years. Overall, I expect this to underpin strong earnings growth for the foreseeable future.
Macquarie Telecom Group Ltd (ASX: MAQ)
I think that Macquarie Telecom could be a great long term investment due to its exposure to the cloud computing boom. The company may still provide traditional telco services to corporate and government customers, but the main driver of its future growth is expected to be its Hosting (data centre) segment. This segment has been growing at a strong rate over the last few years and has continued doing so in FY 2019. In the first half the segment delivered a 14% increase in segment EBITDA to $15.3 million. It looks set to build on this in the second half when the company starts billing its Fortune 100 customer.
REA Group Limited (ASX: REA)
Although the housing market downturn has led to difficult trading conditions for this property listings company, it has still managed to deliver strong profit growth so far in FY 2019. I believe this is a testament to the quality of its business and that when trading conditions improve, the realestate.com.au operator will be well-positioned to accelerate its growth and generate solid returns for shareholders.
