When it comes to investing, I believe it can pay to keep things simple.
While trying to buy low and sell high may generate strong returns if you’re able to successfully time the market, it certainly isn’t easy to do.
Instead, I would suggest investors use one of the simplest and most effective investment strategies – buy and hold investing.
This strategy sees investors buy high quality shares that have solid long term growth prospects and hold onto them for long periods of time. They will only sell them if the investment thesis is broken.
It is a strategy used to great effect by legendary investor Warren Buffett. If you look at his returns, it’s a pretty good testament to the strategy’s success.
But which shares should you buy and hold on the ASX? Three that I think would be great candidates are listed below. Here’s why I rate them:
BetaShares NASDAQ 100 ETF (ASX: NDQ)
I think the BetaShares NASDAQ 100 ETF is a great option for buy and hold investors. This is because it gives investors access to 100 of the highest quality businesses in the world through a single investment. Among its holdings are the likes of Amazon, Apple, Facebook, Microsoft, Netflix, and Tesla. One fund manager just tipped the latter to be worth US$2 trillion one day. This ETF would be a great way to take part in Tesla’s potential rise.
Domino’s Pizza Enterprises Ltd (ASX: DMP)
Another ASX share that I think would be a great buy and hold candidate for investors is Domino’s. I think it is a top option due to its strong brand and ambitious growth plans. At the end of FY 2020, Domino’s had a total of 2,668 stores. However, management doesn’t believe its expansion is anywhere near complete. It has set itself a target of more than doubling its network to 5,500 stores by 2033.
NEXTDC Ltd (ASX: NXT)
A final buy and hold option is NEXTDC. As the region’s most innovative Data Centre-as-a-Service provider, I believe it is well-positioned to benefit from the accelerating shift to the cloud. This shift has led to significant demand for capacity in its data centres. So much so, it was forced to pull forward expansion plans. I expect this strong demand to persist for the foreseeable future and underpin strong sales and earnings growth.
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Returns as of 6th October 2020
James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS and Domino's Pizza Enterprises 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.
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