I’m a big fan of buy and hold investing and believe it is the best way for investors to grow their wealth.
To demonstrate how successful it can be, 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 ASX shares that are listed below:
Cochlear Limited (ASX: COH)
The Cochlear share price has been a market beater over the last decade. This has been driven by growing demand for hearing solutions products due to ageing populations across the world. In addition to this, the high barriers of entry and its significant investment in research and development has supported its growth and cemented its leadership position. Over the last 10 years, Cochlear shares have generated an average total return of 10.8% per annum. This would have turned a $20,000 investment into ~$56,000 today.
REA Group Limited (ASX: REA)
The REA Group share price has absolutely smashed the market since 2011. Thanks to the structural shift to online listings, the dominance of its realestate.com.au website, and its growing international operations, REA Group has been able to grow its earnings at a strong rate over the last 10 years. This has led to the company’s shares providing investors with an impressive 28.8% per annum total return. This means that a $20,000 investment in REA Group’s shares in 2011 would now be worth $251,000.
Technology One Limited (ASX: TNE)
Finally, another market beater over the last 10 years has been the Technology One share price. Thanks to its evolution from a small enterprise solutions company to one of the biggest players in the region, TechnologyOne has delivered very strong earnings growth over the last decade. Its shift to a software-as-a-service business model has also gone down well with investors. This is leading to a greater proportion of its revenues becoming recurring in nature. All in all, this has led to its shares generating a 25.1% per annum average total return over the last decade. This means a $20,000 investment in its shares in 2011 would be worth $188,000 today.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
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 Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.