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 10 years ago would be worth today.
This time around I have picked out the three shares that are listed below:
Aristocrat Leisure Limited (ASX: ALL)
Although the Aristocrat Leisure share price is down 38% from its all-time high, it has still been a very successful long term investment. During the last 10 years the gaming technology company has won a significant share of the poker machine market and launched its rapidly growing Digital business targeting the mobile gaming market. This has led to strong earnings growth and equally strong returns for investors. Aristocrat Leisure’s shares have generated a total return of 19.4% per annum over the period. This would have turned a $20,000 investment into $118,000.
CSL Limited (ASX: CSL)
Despite its shares always appearing to be “expensive” compared to the rest of the market, CSL has been an outstanding investment over the last decade. This has been driven by the company’s leading therapies, which are the result of its high level of investment in research and development. Combined with its growing plasma collection network and the US$275 million acquisition of the Novartis global influenza vaccine business (which became Seqirus), CSL has consistently delivered above-average earnings growth. As a result, its shares have generated an average total return of 25% per annum over the last 10 years. This means $20,000 invested in its shares would be worth $186,000 now.
NIB Holdings Limited (ASX: NHF)
The performance of this private health insurer’s shares may have been a touch volatile in recent years, but they have still managed to smash the market since this time in 2010. Thanks to a combination of market share gains and premium increases, nib has seen its shares provide investors with an average total return of 17.4% per annum. This would have turned a $20,000 investment in the company’s shares into $99,500 today.
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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 CSL Ltd. The Motley Fool Australia has recommended NIB Holdings Limited. 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.