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:
Carsales.Com Ltd (ASX: CAR)
This auto listings company has gone from strength to strength over the last decade. Gone are the days when consumers would look through newspapers for cars to buy. Now they grab their phone or laptop and look online. This shift to online auto listings has led to Carsales delivering consistently strong earnings growth over the period. As has the company’s successful expansion internationally, which continued this year with its entry into the US market. This has ultimately led to its shares generating an average total return of 18.6% per annum over the last 10 years. This would have turned a $20,000 investment into $110,000.
Corporate Travel Management Ltd (ASX: CTD)
This corporate travel booking company’s shares may be trading well below their record high because of the pandemic, but that hasn’t stopped them from outperforming the market materially over the last decade. This has been driven by its very strong revenue and earnings growth over the period. For example, in FY 2011, Corporate Travel Management reported revenue of $64.9 million and profit after tax of $11.8 million. Analysts at Citi are now forecasting a profit after tax of $46.9 million in FY 2022 and then $100 million in FY 2023. Which I feel demonstrates just how far the company has come. Given its strong growth, it won’t be a surprise to learn that its shares have given investors a total return of 29.7% per annum over the period. This would have turned a $20,000 investment into just over $269,400.
Another market beater over the last 10 years has been the ResMed share price. This has been driven by increasing demand for the sleep treatment focused medical device company’s world class portfolio. And with an estimated 1 billion people suffering from sleep apnoea globally, the majority undiagnosed, ResMed still has a long runway for growth. Over the last decade, ResMed’s shares have generated an average total return of 27.4% per annum. This would have turned a $20,000 investment into ~$225,500 today.