As I am a big fan of buy and hold investing, I often like to demonstrate how successful this investment strategy can be with ASX 200 shares.
I do this by picking out a number of popular shares and looking to see how much a single $20,000 investment 10 years ago would be worth today.
Let's see how investments in these ASX 200 shares have fared during this time:
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NextDC Ltd (ASX: NXT)
The first ASX 200 share we are going to look at is NextDC. This data centre operator has been a great place to invest over the last decade. Thanks to strong demand for capacity in its centres due to the structural shift to the cloud, its revenue and operating earnings have been growing at an explosive rate.
This has led to its shares smashing the market since 2013 with an average return of 19.7% per annum. This means that a $20,000 investment in NextDC shares would have grown to be worth ~$121,000 today.
Northern Star Resources Ltd (ASX: NST)
Let's now take a look at Northern Star. Over the last 10 years, this gold miner has gone from a relative minnow targeting annual production of ~200,000 ounces into one of the largest players in the sector delivering 1,563,000 ounces in FY 2023.
As you might expect, this has done wonders for its shares, which have left the ASX 200 index for dust. Over the last 10 years, Northern Star's shares have generated an average return of 32.3% per annum. This incredible average return means that a $20,000 investment in 2013 would now be worth almost $330,000.
Overall, I believe that these ASX 200 shares demonstrate how successful buy and hold investing can be.
