Growth shares are not always comfortable to own. They can soar when sentiment is strong. They can fall sharply when investors become nervous about valuations, interest rates, or new technologies.
But over long periods, it is often growth companies that reshape industries and deliver the strongest returns.
That is why I still believe quality ASX growth shares deserve a place in a long-term portfolio.
Growth is not about hype
True growth investing is not about chasing whatever is trending.
It is about identifying businesses that are expanding their markets, reinvesting profits at high returns, and strengthening their competitive positions over time.
Take Xero Ltd (ASX: XRO). It continues to add subscribers globally and deepen its ecosystem of accounting and business tools. The opportunity is not just in signing up new customers, but in increasing revenue per user as more services are adopted.
Or consider NextDC Ltd (ASX: NXT). Demand for data centres is being driven by cloud computing, artificial intelligence, and digital transformation. While capital intensive, the long-term structural drivers behind digital infrastructure remain intact.
These are businesses riding enduring trends rather than short-lived fads.
Volatility is part of the journey
Growth shares often trade at higher valuations because investors are pricing in future earnings expansion.
When confidence wobbles, those valuations can compress quickly. That volatility can be uncomfortable. But it can also create opportunities for patient investors.
History shows that many of the market’s biggest winners experienced multiple 30% to 50% pullbacks along the way. Short-term weakness does not necessarily mean the long-term thesis is broken.
The key is distinguishing between temporary sentiment shifts and genuine structural deterioration.
The compounding effect
If a company can grow earnings at 15% to 20% per year for a decade, the impact is enormous.
Revenue doubles, then doubles again. Margins improve as scale builds and cash flow increases.
That is how businesses like ResMed Inc. (ASX: RMD) have created long-term shareholder value. Not through explosive single-year gains, but through sustained expansion backed by structural demand.
The long view
Growth investing requires patience.
It requires the willingness to hold through volatility and focus on business fundamentals rather than daily price movements.
For investors with a multi-year horizon, quality ASX growth shares can still be one of the most powerful ways to build wealth. The path will not always be smooth. But the destination can be worth it.
The post Why I’m still backing ASX growth shares for the long run appeared first on The Motley Fool Australia.
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More reading
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- Why ASX tech shares still deserve a place in your portfolio in 2026
- 3 ASX growth shares I’d back to beat the market over the next decade
Motley Fool contributor James Mickleboro has positions in Nextdc, ResMed, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed and Xero. The Motley Fool Australia has positions in and has recommended ResMed and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.