I'm a big fan of buy and hold investing and believe it is one of the best ways to grow your wealth.
This is because it allows investors to take advantage of the power of compounding. This is what happens when you generate returns on top of returns.
To demonstrate just how successful this investment strategy can be with ASX 200 shares, I like to see how much a single $20,000 investment in certain shares 10 years ago would be worth today.
Let's now see how investments in these three shares have fared during this time:
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CAR Group Limited (ASX: CAR)
This auto listings company's shares have impressed over the last decade. Thanks to the Carsales owner's domination of the Australian market, its expansion overseas, and acquisitions, its shares have delivered market-beating returns for investors since 2014. During this time, the ASX 200 share has achieved an average return of 14.5% per annum. This means that if you had invested $20,000 into its shares, you would have seen your investment grow to approximately $77,500 today.
Mineral Resources Ltd (ASX: MIN)
This mining and mining services company has come a long way since 2014. Back in FY 2014, the company delivered revenue of $1.8 billion. This year, analysts are forecasting revenue almost triple this at $5.2 billion. This strong growth has put a rocket under the ASX 200 share over the last 10 years. So much so, that they have managed to deliver a return that is more than double the market return over the same period. Anyone lucky enough to have bought Mineral Resources' shares a decade ago, would have seen their investment compound by 21.5% per annum. This means that a $20,000 investment in its shares would have turned into a massive $140,000.
Webjet Ltd (ASX: WEB)
Another ASX 200 share that has smashed the market over the last decade is Webjet. It is the online travel company behind the eponymous Webjet brand and the business-to-business juggernaut WebBeds. Impressively, despite being brought to its knees during the pandemic and scrambling for a capital injection, Webjet's shares have still managed to create significant wealth for its shareholders since 2014. For example, over the last 10 years, the company has recorded an average total return of 16.8% per annum. This means that if you had invested $20,000 into its shares in 2014, you would have seen your investment grow to be worth a sizeable $94,500 today.
