When it comes to investing in ASX shares, it is tempting to believe that success lies in constant action — buying, selling, tweaking, reacting to every new piece of news.
But history tells a very different story.
Some of the biggest fortunes have been built not through frantic day trading, but by doing something much simpler.
Buying quality shares and holding them for the long term.
Here's why buy and hold investing with ASX shares could be your smartest move yet.
Time in the market with ASX shares
It is often said that time in the market beats timing the market. And it's true.
When you buy and hold, you allow time to do the heavy lifting.
You give businesses the chance to grow their profits, expand into new markets, and reward shareholders through rising dividends and share prices.
Just look at how some household ASX names have rewarded patient investors:
Commonwealth Bank of Australia (ASX: CBA) — up over 350% in the past 20 years, not including dividends.
CSL Ltd (ASX: CSL) — one of Australia's most remarkable success stories, turning early investors into millionaires. Its shares are up 650% over the two decades.
Wesfarmers Ltd (ASX: WES) — quietly delivering solid returns while building its Kmart and Bunnings empires. Its shares are up almost 200% since 2005. This doesn't include dividends nor any benefits from divestments such as Coles Group Ltd (ASX: COL), which saw shareholders receive one share in the supermarket giant for every Wesfarmers share they owned.
These gains didn't come from clever short-term moves. They came from staying invested and letting compounding work its magic.
Compounding
Compounding is an investor's best friend. It is what happens when you generate returns on top of returns.
Over the long term, the share market has generated an average return of around 10% per annum. There's no guarantee that it will deliver a return like this again in the future, but significant wealth could be accumulated if it does.
For example, an investment of $500 into ASX shares each month would turn into $360,000 in 20 years or $1 million after 30 years with an average 10% per annum return.
Avoiding the emotional rollercoaster
When you're constantly buying and selling, it's easy to get caught up in the daily noise of the market.
Bad headlines. Interest rate changes. Earnings misses. Political drama.
Trying to react to every twist and turn usually ends the same way: buying high and selling low.
But when you buy quality ASX shares and commit to holding them through thick and thin, you free yourself from the emotional rollercoaster. You stop obsessing over short-term noise and start focusing on the long-term story — the one that really matters.
What makes a great buy and hold ASX share?
Not every company is worthy of a permanent spot in your portfolio.
Investors may want to look for ASX shares with a strong competitive advantage. Does the company have something special that is hard for rivals to replicate?
Growing earnings. Are profits heading in the right direction year after year? Does it have a healthy balance sheet? Can the business survive tough times without taking on too much debt? If it ticks these boxes, chances are it has the makings of a strong buy and hold investment.
Foolish takeaway
Buy and hold investing isn't flashy. It doesn't make headlines.
But quietly, steadily, it builds real wealth — the kind that changes lives.
Find great businesses. Buy them at fair prices. Hold them for the long haul. Your future self will be glad you did.
