As I've mentioned previously, a $5,000 investment once a year over a long enough period of time has the potential to grow into something significant due to the power of compounding interest.
Based on the average return of 9.1% per annum, an investment of $5,000 each year for a period of 30 years would grow to be worth approximately $760,000.
I believe this demonstrates just how rewarding long-term buy and hold investing can be.
With that in mind, here are three shares to buy with that first $5,000:
A2 Milk Company Ltd (ASX: A2M)
I think that this infant formula and fresh milk company would be a great investment option. Although its shares have been on a stellar run over the last 12 months, I don't believe it is too late to invest due to its strong long-term growth potential thanks to its international expansion and increasing demand for its products in the massive China market. It was largely because of the latter that a2 Milk Company recently reported a 42% increase in revenue for the first nine months of FY 2019 compared to the prior corresponding period.
Cochlear Limited (ASX: COH)
According to the WHO, an estimated 524 million people were aged 65 or over in 2010. This equated to 8% of the global population. By 2050, this number is expected to nearly triple to around 1.5 billion, representing 16% of the global population. I think this is a major positive for Cochlear and is likely to result in increasingly strong demandfor its hearing solutions products over the next few decades, underpinning solid earnings growth. Because of this, I think it would be a great place to invest that $5,000.
Nanosonics Ltd (ASX: NAN)
Another top option in the healthcare sector could be this infection control specialist. Nanosonics is best-known for its trophon EPR product, which is a best in class disinfection system for ultrasound probes. Due to the quality of its product the company has been growing its installed base at a very strong rate over the last few years. This has led to strong sales of units and the consumables that the system requires to function. Pleasingly, I believe the company is well-positioned for further strong growth thanks to the sizeable market opportunity for its trophon EPR product and the upcoming launch of several new products targeting unmet needs.
