I think one of the best ways for investors to grow their wealth is to make long term investments in quality shares with strong business models and just as strong growth prospects.
By doing this, investors can benefit from compound interest.
Compound interest is the result of reinvesting interest, instead of paying it out. It explains how a $10,000 investment generating a 10% return per annum will grow to be worth ~$26,000 in 10 years.
With that in mind, I thought I would look at shares which I believe could provide outsized returns for their shareholders over the next decade and beyond.
Three that I found are listed below. Here's why I like them:
Domino's Pizza Enterprises Ltd (ASX: DMP)
I think this pizza chain operator could be a great long term investment. This is due to the popularity of its pizzas with consumers and its international expansion plans. Although the latter will inevitably be impacted by the coronavirus pandemic, I expect its store rollouts to accelerate once conditions return to normal. Domino's is aiming to grow its global store network by 7% to 9% per annum over the next five years.
NEXTDC Ltd (ASX: NXT)
Another top option for a long term investment is NEXTDC. It is an innovative data centre operator which has a collection of world class operations in key locations across the country. Demand for its services has been growing very strongly in recent years, leading to solid earnings growth. Pleasingly, with demand expected to continue growing at a rapid rate for some time to come due to the cloud computing boom, I believe the future is bright for NEXTDC.
Xero Limited (ASX: XRO)
A final option to consider is Xero. It is a cloud-based business and accounting platform provider that is growing quickly in the US, UK, Australia, South Africa, and South East Asia. I'm a big fan of the company due to its attractive economics, a market leading product, and its massive addressable market. While the coronavirus outbreak could stifle its subscriber growth in the near term, I expect it to rebound strongly when conditions return to normal.
