I’m a big fan of buy and hold investing and believe it is one of the best ways for investors to grow their wealth.
To demonstrate how successful it can be, every so often I like to pick out a number of popular ASX shares to see how much a single $20,000 investment ten years ago would be worth today.
This time around I have picked out the four shares that are listed below:
Hansen Technologies Limited (ASX: HSN) is a billing software provider which has been a strong performer over the last decade. Thanks to the stickiness of its products and a series of new contract wins, Hansen has quadrupled its revenue from $57.8 million in FY 2010 to $231.3 million in FY 2019. This has resulted in its shares providing investors with an average total return of 21% per annum over the period. This would have turned a $20,000 investment into ~$134,500.
Another strong performer over the last decade has been the Ramsay Health Care Limited (ASX: RHC) share price. During the last ten years the private hospital operator has grown its network to a total of 480 facilities across 11 countries. Combined with strong demand for healthcare services, Ramsay has consistently delivered robust earnings growth over the period. This has led to its shares generating an average total return of 21.8% per annum. Which means a $20,000 investment would be worth almost $145,000 today.
The Webjet Limited (ASX: WEB) share price has pulled back notably from its 52-week high in 2019. Despite this, the online travel agent’s shares have smashed the market over the last decade. This has been thanks to the shift to online travel booking and the growing popularity of its numerous brands. During this time its shares have achieved a total average return of 22.7% per annum. This would have turned a $20,000 investment into $155,000.
It hasn’t just been growth shares that have delivered solid returns. The shares of conglomerate Wesfarmers Ltd (ASX: WES) have generated an average total return of 9.7% per annum over the last decade. This would have turned a $20,000 investment into $50,500. You’d also own a parcel of Coles Group Ltd (ASX: COL) shares following its spin-off.
But that was the last 10 years, what about the next 10 years? My money would be on these outstanding shares providing market-beating returns for investors over the next decade.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Hansen Technologies. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Hansen Technologies, Ramsay Health Care Limited, and Webjet Ltd. 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.