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:
This Australian stock exchange operator may not be the most exciting place to invest your money, but it certainly has been a good one. Due to its near monopoly in Australia, ASX Ltd has been able to deliver consistently positive earnings and dividend growth over the last decade. This has led to the ASX Ltd share price generating an average total return of 9.9% per annum since 2011. This means that a $20,000 investment 10 years ago would be worth almost ~$51,500 today.
Jumbo Interactive Ltd (ASX: JIN)
Due to the shift to online lottery playing, Jumbo has been growing at a very strong rate over the last decade. During this time, the company has gone from targeting lottery ticket sales of $75 million to $80 million in FY 2011, to a target of $1 billion in FY 2022. The company has also developed its Powered by Jumbo software as a service platform, which allows lotteries to take their operations online without the need to develop their own platforms. Given the high proportion of lotteries that are still not online, management believes this side of the business has huge potential. So, although Jumbo’s shares have provided investors with an average total return of 49% per annum over the last 10 years, the gains may not be over. For now, though, a $20,000 investment into its shares 10 years ago would be worth a staggering ~$1.08 million today.
Finally, the ResMed share price has been a market beater over the last decade. This has been driven by the growing prevalence of sleep disorders and its industry-leading solutions. This has underpinned consistently strong earnings growth over the last decade. Unsurprisingly, this stellar earnings growth has led to similarly strong returns for its shareholders. Over the last 10 years, ResMed shares have provided investors with an average total return of 24% per annum. This means that an investment of $20,000 into its shares in 2011 would have grown to be worth ~$172,000 this year.
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 and recommends Jumbo Interactive Limited. The Motley Fool Australia has recommended Jumbo Interactive Limited and ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.