One of the simplest and potentially most effective ways of building your wealth is to invest with a long term view.
This is because buying and holding shares lets investors benefit fully from the power of compounding.
But which shares should you buy? I believe the three ASX shares listed below could generate strong returns for investors over the long term. Here’s why I would buy them today:
Altium Limited (ASX: ALU)
The first buy and hold option to look at is Altium. It is a printed circuit board (PCB) design software provider which I believe has significant potential. This is due to the growing demand for sophisticated electronic design automation software such as Altium Designer because of the Internet of Things boom. This year management is aiming to reach 50,000 software subscriptions. It then wants to double this to 100,000 by FY 2025. Given the quality of its product and favourable industry tailwinds, I believe Altium will achieve this.
Bubs Australia Ltd (ASX: BUB)
Another buy and hold option to consider is Bubs. It is a goat’s milk-focused infant formula and baby food company which has been growing at a strong rate over the last few years. Pleasingly, I believe this strong form can continue for some time to come. Especially given increasing demand in China and its supply agreements with Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) supermarkets. Another positive is that it has recently expanded its offering into cow’s milk infant formula. Given the size of this side of the infant formula market, it could be a big contributor to its future growth.
Nearmap Ltd (ASX: NEA)
A final buy and hold option to consider is Nearmap. It is a leading aerial imagery technology and location data company that allows businesses to instantly access high resolution aerial imagery and integrated geospatial tools. Last month Nearmap revealed that it is on course to achieve annualised contract value of $103 million to $107 million in FY 2020. This is still only a fraction of the global aerial imagery market, which is estimated to be worth US$10.1 billion. I believe its quality offering, which is being boosted by the release of an AI product, puts the company in a position to capture a growing slice of this market over the next decade.
And here are more top shares that could be long term market beaters…
One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.
Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks are screaming buys. And you can buy them now for less than $5 a share!
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More reading
- ASX shares I’d buy if this decline is a second COVID-19 crash
- Tech shares! Should we even invest in anything else?
- Have $1,000? You should pick one of these 8 ASX shares
- How the A2 Milk and Bubs share prices have performed during the pandemic
- 2 ASX shares I’d buy if the ASX crashes again
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 Altium, BUBS AUST FPO, and Nearmap Ltd. The Motley Fool Australia has recommended BUBS AUST FPO and Nearmap 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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