For investors who actively manage their portfolios, it can be difficult not to overreact to weekly or even daily swings in ASX shares.
Checking stock prices daily can trigger emotional decisions when, in reality, buying and holding for the long term is a proven pathway to healthy returns.
Quality investments not only recover from periods of volatility but also keep charging ahead.
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Investing for the long haul
For this exercise, I am focused on blue-chip stocks.
The reason?
Of course, I could retrospectively choose a penny stock that boomed and say, "You should have bought X stock before it took off."
But this is disingenuous, and difficult to predict.
Here at The Motley Fool, our philosophy is based on long-term, diversified investing.
It's kind of like my best mate's 1996 Toyota Corolla; there's nothing sexy about it, but it works.
Sometimes it's important to zoom out and look at just how successful you can be investing for the long term.
Rio Tinto Ltd (ASX: RIO)
Rio Tinto is one of the world's largest metals and mining corporations.
It is also one of Australia's largest companies by market capitalisation.
Mining is a significant part of the Australian and global economies, and companies like Rio Tinto have helped push the Australian economy forward in the last decade.
10 years ago, these ASX shares were trading for roughly $42 each.
Last week, Rio Tinto shares closed at just under $147.70 a piece.
That's good for an increase of more than 250%.
This means a $5,000 investment 10 years ago would today be worth approximately $17,600 based on the share price alone.
That's before taking into consideration the $7,000 in dividend payments you would have earned in passive income along the way.
This brings the total increase to more than 400% over the 10-year period.
Commonwealth Bank of Australia (ASX: CBA)
It's no surprise that Australia's largest bank, and largest listed company, has also been a steady investment over the last 10 years.
A decade ago, CBA shares were trading at just under $80 per share.
Today, these ASX shares are sitting at just over $161 per share.
This is good for a 100% return, doubling any investment made 10 years ago.
BetaShares NASDAQ 100 ETF (ASX: NDQ)
Turning our attention to a fundamental ASX ETF, this fund from Betashares offers the 100 largest non-financial companies listed on the Nasdaq market.
It represents the "new economy", so to speak, and includes large-cap US companies like Apple and Microsoft.
Since early 2016, it has risen roughly 425%.
This is despite falls of 20% for the fund during February 2020 and 16% from February to April this year.
This means an investor who aimed for the NASDAQ index 10 years ago has turned a hypothetical $5,000 investment into $26,250.
Foolish Takeaway
While past performance doesn't guarantee future returns, this exercise is just to illustrate that a traditional "non-sexy" portfolio of two of Australia's largest companies, and the NASDAQ 100, would have turned out to be an extremely profitable investment over the last 10 years.
These two companies and one ETF not only recovered from economic and global crises in the past, but came out the other side, proving a long-term view is a viable choice for investors.
