I'm a big fan of buy and hold investing and I think it's one of the best ways for investors to grow their wealth.
To show how successful it is, I sometimes like to choose a series of popular ASX shares to see how much a single investment of $ 20,000 is worth ten years ago.
This time I chose the four actions that are listed below:
The ResMed Inc. (ASX: RMD) The share price has been remarkably successful in the last decade thanks to the innovative products of the medical device company and the increase in the global demand for sleep treatment services. During this period, ResMed shares generated an average total return of 21.95% per annum. This means that anyone who invested $ 20,000 in the company's shares 10 years ago would see their investment grow in value to $ 145,500 today.
Due to the development of highly sought-after pokie machines, strong gains in market share and the recent emergence of its rapidly growing digital business, Aristocrat Leisure Limited (ASX: ALL) the shares were a great place to invest your money in the last decade. During this time the shares of the gaming technology company provided an average total return of 23.3% annually, which would have transformed an investment of $ 20,000 into $ 162,500.
The SEEK Limited (ASX: SEK) The share price has been significantly higher in the last 10 years. This was caused by the strong growth in profits achieved thanks to the move to online job lists from print media, to the leading position of the company in the sector and to its expansion in international markets. During the period the company's shares generated an average total return of 19.3% per year. This means that an investment of $ 20,000 would have grown to $ 116,800 over the period.
Finally, the TPG Telecom Ltd (ASX: TPM) The share price could fall by almost a third from its 52-week high, but still provided an incredible return for shareholders in the last decade. Thanks to its development from a challenging telco to an industry leader, TPG Telecom's shares generated an average total return of 32.2% per annum. This would have transformed a $ 20,000 investment into as much as $ 325,000 in just 10 years.
But then, what actions will offer returns like these over the next 10 years? My money would be on these high quality and buy-rated ASX shares.
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Motley Fool collaborator James Mickleboro owns shares in SEEK Limited. Motley Fool Australia has recommended ResMed Inc. and SEEK Limited. We Fools may not all have the same opinions, but we are all convinced that, considering a wide range of insights, we have become better investors. The Motley Fool has a disclosure policy. This article contains only general investment recommendations (with AFSL 400691). Authorized by Scott Phillips.
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