I'm a big fan of buy-and-hold investing and believe it is one of the best ways to grow your wealth.
The basic idea behind buy-and-hold investing is very simple: you buy ASX shares with the intention of holding onto them for the long term, rather than constantly buying and selling in an attempt to time the market.
One of the biggest benefits of this strategy is that it allows you to benefit from the power of compounding.
When you hold onto ASX shares for years or even decades, the gains you make can grow exponentially as you reinvest your dividends and watch your portfolio appreciate in value.
This is a strategy that legendary investor Warren Buffett is a fan of and has used to great effect over several decades. In fact, the Oracle of Omaha once famously quipped: "Our favourite holding period is forever."
And with a bull market potentially on the horizon, what better time to start buying and holding ASX shares?
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Finding ASX shares to buy and hold
The first step to take is finding ASX shares to buy and hold for the long term.
When I make buy-and-hold investments, there are certain qualities that I look for. These include strong business models, talented management teams, positive long-term growth outlooks, and sustainable competitive advantages.
With that in mind, here are my five top buy-and-hold ASX shares right now (in order of preference):
- Biotherapeutics giant CSL Limited (ASX: CSL)
- Electronic design software platform provider Altium Limited (ASX: ALU)
- Sleep treatment company ResMed Inc. (ASX: RMD)
- Fashion jewellery retailer Lovisa Holdings Ltd (ASX: LOV)
- Location technology company Life360 Inc (ASX: 360)
Overall, I believe all five ASX shares have the qualities that I look for when making buy and hold investments and, importantly, I think they are all trading at attractive levels right now for investors.
