I’m a big fan of buy and hold investing and believe it is the best way for investors to grow their wealth.
To demonstrate how successful it can be, I like to pick out a number of popular ASX shares to see how much a single $20,000 investment 10 years ago would be worth today.
This time around I have picked out the three ASX shares that are listed below:
Aristocrat Leisure Limited (ASX: ALL)
This gaming technology company’s shares have been strong performers since 2011. During this time the company has carved out a leadership position in the poker machine market and has completed a couple of major earnings accretive acquisitions. The acquisitions of Plarium for US$500 million and Big Fish for $1.3 billion opened up the company to the rapidly growing mobile and social gaming markets and diversified its business. This proved to be especially important during the height of the pandemic when casinos close. The company’s success has led to its shares generating an average total return of 27.5% per annum over the last 10 years. This would have turned a $20,000 investment into $227,000.
Nanosonics Ltd (ASX: NAN)
The Nanosonics share price has been a market beater over the last decade. This has been thanks to the increasing demand for the infection control company’s trophon EPR disinfection system for ultrasound probes. Over the last 10 years the company has consistently grown its market share, which is good for two reasons. One is the unit sales it generates, the other is the growing recurring revenues it generates from the consumable products the trophon EPR system needs to function. This has underpinned strong revenue growth and an impressive average total return of 23.8% per annum since 2011. This means a $20,000 investment would now be worth $169,000.
NEXTDC Ltd (ASX: NXT)
Thanks to the shift to the cloud, a significant increase in demand for data centre services, and its growing network of centres across Australia, NEXTDC’s sales and earnings have been growing at a strong rate for a decade. This has led to its shares smashing the market over the last 10 years. During this time, the NEXTDC share price has provided investors with an average total return of 21.6% per annum. This would have turned a $20,000 investment into $141,000 in 2021.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
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.
*Returns as of June 30th
More reading
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- ASX 200 down 0.5%: Energy shares jump, big four banks fall, Zip climbs higher
- 2 ASX growth shares to buy in January
James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The post How to turn $20,000 into $225,000 in 10 years with ASX shares appeared first on The Motley Fool Australia.
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