I'm a big advocate of buy and hold investing and believe it is one of the best ways to generate wealth.
As I've mentioned previously, a $5,000 investment once a year has the potential to grow materially due to the power of compound interest.
For example, according to research by Fidelity, as of the end of 2018, the Australian share market had generated an average total return of 9.1% per annum over the last three decades.
This meant that an investment of $5,000 each year for the last 30 years would have grown to be worth a total of $760,000 today.
I believe this shows 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:
Altium Limited (ASX: ALU)
I think that Altium would be a great place to consider investing that first $5,000. It is an award-winning printed circuit board (PCB) design software provider which I believe has a long runway for growth thanks to its exposure to the fast-growing Internet of Things (IoT) market. As PCBs are found in almost all IoT devices, I expect demand for its software to continue increasing at a strong rate for a long time to come.
Coles Group Ltd (ASX: COL)
If you're interested in defensive and income-generating options then I feel this supermarket giant could be a good option for the $5,000. I'm very optimistic on the company's bold growth and cost-cutting plans and believe Coles will be well-positioned to grow both its earnings and dividend at a solid rate over the next decade if it executes them successfully.
Webjet Limited (ASX: WEB)
Another quality option for that $5,000 investment could be this online travel agent. As well as having a number of increasingly popular brands and benefiting from the continued shift to online travel booking, I believe the hard work the company is doing behind the scenes with its Rezchain and Rezpayments technologies will be a big boost to its future earnings growth. Both technologies are expected to be an integral component in its move from an "8/5/3" structure to an "8/4/4" structure. This refers to its target of 8% revenue/TTV, 4% costs/TTV, and 4% EBITDA/TTV.
