One of the simplest investment strategies that investors can use is the buy and hold strategy.
The idea behind the strategy is simply that investors buy high quality shares that have solid long term growth prospects and hold onto them for long periods of time.
Three quality shares that I think would be great options for buy and hold investors are as follows:
Appen Ltd (ASX: APX)
When looking for buy and hold options, I think it is important to find an industry that has strong growth potential. After which, I will then look for a company that has a leading position within it. With that in mind, I think Appen is a prime example of a great buy and hold option. It is the global leader in the development of high-quality, human annotated datasets for an artificial intelligence market forecast to grow materially over the next decade.
CSL Limited (ASX: CSL)
Another of my favourite buy and hold options is this global biotherapeutics giant. Thanks largely to the quality of its products and its high level of investment in research and development, the CSL share price has generated outsized returns for its shareholders for well over a decade. I remain confident that the company is well-positioned to carry on this strong form over the 2020s. As a result, I think it could be a fantastic addition to most portfolios.
Xero Limited (ASX: XRO)
A final buy and hold option to consider is Xero. It is a cloud-based business and accounting software provider which has been growing at an exceptionally strong rate over the last few years. Pleasingly, this continued to be the case in FY 2020, with Xero reporting very strong recurring revenue growth. This strong growth was driven by a combination of increased subscriber numbers, low churn levels, and higher average revenue per user. Looking ahead, due to its global growth opportunities and the quality and stickiness of its product, I expect more of the same in the years to come.
Where to invest $1,000 right now
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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Xero. The Motley Fool Australia owns shares of Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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