Buy and hold investing is one of the most popular investment strategies and used (to great effect) by legendary investor Warren Buffett.
The strategy sees investors buy quality shares and then hold onto them for the long term, allowing compound interest to work its magic.
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.
With that in mind, here's how $20,000 investments in these ASX shares would have fared:
Aristocrat Leisure Limited (ASX: ALL)
Thanks to its industry-leading pokie machines and its expansion into digital and mobile gaming via some very successful acquisitions, Aristocrat Leisure has been a strong performer over the last 10 years. This has led to above-average sales and earnings growth, which has underpinned market-beating returns for investors. Over the last decade, the Aristocrat Leisure share price has generated an average total return of 25% per annum. This would have turned a $20,000 in 2010 into $186,000 today.
REA Group Limited (ASX: REA)
Over the last decade this property listings company has benefited greatly from the shift online and carved out a leadership position in the industry for itself. Unsurprisingly, this has supported very strong earnings growth since 2010, much to the delight of long term shareholders. Over the 10 years, the REA Group share price has generated an average annual total return of 29.2%. This means that a $20,000 investment would be worth $259,000 today.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
Despite losing almost a third of its value over the last 12 months due to the impact of the pandemic on the travel industry, this airport operator's shares have still smashed the market since 2010. Thanks to its position as the busiest airport in Australia and the global tourism boom, Sydney Airport shares have provided investors with an average total return of 11.9% per annum over the last 10 years. This would have turned a $20,000 investment into almost $62,000.
