Buy and hold investing may not be an exciting get-rich-quick strategy, but it has the potential to generate significant wealth over the long term.
Some of the world's richest people, such as legendary investor Warren Buffett, have used this strategy to build their fortunes and there is nothing to stop the average investor from doing the same.
With that in mind, here are two ASX shares that I think would be excellent buy and hold options:
Kogan.com Ltd (ASX: KGN)
I think that this ecommerce company could be a great buy and hold option. Over the last few years it has been benefiting greatly from the shift to online shopping. Pleasingly, this shift has accelerated because of the pandemic. Perhaps even more than you might think. Adobe estimates that the pandemic has accelerated ecommerce growth by 4 to 6 years.
If this proves to be the case, then it is likely to underpin exceptionally strong earnings growth for Kogan in FY 2020 and FY 2021. Though, management isn't settling for that. It recently raised $120 million to fund the potential acquisitions of businesses that it believes will add value and drive further growth.
ResMed Inc. (ASX: RMD)
ResMed is another ASX share which I would buy and hold. I think the medical device company is a great buy and hold option due to the proliferation of obstructive sleep apnoea (OSA). Management estimates that just 20% of OSA sufferers have been diagnosed at this point, but I expect that to change in the future as education around the sleep disorder increases.
And thanks to the quality of its products and software, I'm confident ResMed will capture a greater slice of this growing market over the next decade. Overall, I expect this to support strong earnings growth for years to come and drive the ResMed share price notably higher over the 2020s.
