Like Warren Buffett, I'm a big fan of buy and hold investing and believe it is the best way for investors to grow their wealth thanks to the power of compounding.
In order to show 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:
Macquarie Group Ltd (ASX: MQG)
Thanks to its high quality operations and robust business model, this investment bank has been a great place to invest over the last decade. Since 2013, Macquarie has outperformed the big four banks significantly with its total average return of 19.25% per annum. This would have turned a $20,000 investment 10 years ago into almost $116,000 today.
REA Group Limited (ASX: REA)
Another ASX share that has beaten the market over the last decade has been property listings company REA Group. Thanks to the shift online for property listings and the domination of its realestate.com.au website, REA has delivered stellar earnings growth and big returns. Over the last 10 years, its shares have generated an average annual return of 17.5%. This means a $20,000 investment in 2013 would now be worth just over $100,000.
ResMed Inc. (ASX: RMD)
A third ASX share that has made shareholders smile is ResMed. Thanks to its industry-leading solutions and the growing awareness and prevalence of sleep disorders, ResMed has delivered consistently strong sales and earnings growth over the last decade. This has gone down well with the market and led to its shares generating an average total return of 23% per annum. This means that an investment of $20,000 into its shares in 2013 would have grown to be worth almost $160,000 this year.
