I’m a big fan of buy and hold investing and believe it is one of the best ways for investors to grow their wealth.

To demonstrate how successful it can be, every so often 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)

Aristocrat is a gaming technology company which has been a strong performer over the last decade. This is thanks largely to the popularity of its poker machines and the emergence of its lucrative and fast-growing digital business. Combined, they have underpinned strong earnings growth and market-beating returns for investors. Over the last 10 years its shares have generated an average total annual return of 21.9%. This would have turned a $20,000 investment into $145,000 today.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Thanks to its successful expansion throughout Australia and in several international markets, this pizza chain operator has been growing its earnings at a very strong rate over the last 10 years. This has led to Domino’s shares generating an average total return of 29.9% per annum over the period. Which means that a $20,000 investment in its shares in June 2010 would now be worth a cool $275,000. The good news for shareholders is that Domino’s is aiming to grow its store footprint materially over the next five years. I believe this could lead to further strong returns over the next decade.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

Despite losing almost a third of its value since hitting its high in December, this airport operator has still been a great place to invest over the last decade. Increasing international tourism from China and the United States and growing ancillary revenues have underpinned solid income and distribution growth since 2010. This has led to Sydney Airport’s shares beating the market with an average total return of 13.1% per annum over the period. This would have turned a $20,000 investment into $68,500 today.

More reading

• ASX 200 down 0.35%: UBS upgrades NAB and Westpac, Qantas soars again
• Why Kogan, NAB, Qantas, & Sydney Airport shares are racing higher
• These top ASX dividend shares could be perfect for income investors
• 3 large cap shares beating the ASX 200 this year
• 3 of the best ASX shares to buy with $3,000 right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited. 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.

The post How to turn $20,000 into $275,000 in 10 years with ASX 200 shares appeared first on Motley Fool Australia.

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It’s tempting to just hold cash when there’s market volatility rather than buying ASX shares.

That’s certainly been on my mind in 2020 as we saw the S&P/ASX 200 Index (ASX: XJO) quickly turn from record high into a bear market.

So, should we all really be holding cash and waiting for the market to fall further?

Time to buy ASX shares or hold more cash?

Let’s start with the good things about holding cash.

For one, it’s safer. Cash is about as safe an investment as they come which can be good if you’re nervous about the share market.

Another benefit of cash is that it provides a buffer while times are tough. Many Aussies are facing the prospect of low or no wages in the short-term which means cash may be king right now.

There’s also the chance to stockpile cash and buy ASX shares cheaply. Most of the big market crashes in recent years have taken 12-18 months to actually reach rock bottom.

Despite falling lower in February and March, the ASX 200 has rebounded strongly. This could mean there are further falls to come as economic data and corporate earnings deteriorate.

However, holding cash isn’t necessarily the ‘safe bet’ you might think.

Firstly, there’s the opportunity cost. If you sit on the sidelines, you might miss out on potential gains.

That’s been obvious from the recent ASX share market rebound. If you sold your holdings in mid-March, you might have had to buy back in at a higher price rather than just riding the wave.

Secondly, there’s plenty going on to support the share market right now. This includes the central banks lowering interest rates as well as continued government stimulus packages pumping money into the economy.

If ASX shares don’t crash as you expect, you could miss out on potential gains. Even if they do crash, you might still have been better off buying and holding for the long-term.

Foolish takeaway

It’s easy to become spooked and consider holding more cash when ASX share prices are volatile .

While cash isn’t itself a bad thing and can be good to have a safety buffer, it may not be wise to go all-in.

It’s important to remember your long-term time horizon and not panic-sell at the first sign of ASX share price falls.

If you’re really that worried about your short-term gains or losses, maybe you’re not ready to invest in shares.

Another option could be to hold defensive healthcare or energy shares, such as CSL Limited (ASX: CSL) or AGL Energy Limited (ASX: AGL), to ease some of of your nerves.

More reading

• Is 2020 a good time to get a credit card?
• Are Macquarie Group shares worth investing part of $3,000 into this June?
• What the 10 largest companies in the world have in common
• Why is it so hard to outperform the ASX 200 index?
• ASX 200 closes higher, banks keep rising

Ken Hall 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. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

The post Should you buy ASX shares or hold cash right now? appeared first on Motley Fool Australia.

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Do you have $3,000 to invest in shares this month? Below I’ll share my top three picks in BetaShares NASDAQ 100 ETF (ASX: NDQ), CSL Limited (ASX: CSL) and Macquarie Group Ltd (ASX: MQG) shares to either add to or help you start your share portfolio.

I believe that shares are a much better alternative to keeping your money in a savings account or term deposit. The interest earned there often doesn’t even cover inflation.

BetaShares NASDAQ shares

The NASDAQ 100 ETF is comprised of the 100 largest, non-financial businesses on the US NASDAQ exchange.

Australia’s tech sector is tiny compared to the US market. So, purchasing this exchange-traded fund (ETF) gives you instant diversification to a much larger tech market.

It is home to some of the world’s most successful businesses with a high proportion being larger companies. This includes tech giants Amazon, Facebook, Microsoft, Google, Netflix and Apple.

Many of these companies are world-leading brands, have strong positions in market niches and strong cash flow. 

A significant proportion has also seen share price growth over the past 5 years well above a 10% average per annum. I believe that many will continue to grow strongly over the next decade. This, I feel, is likely to lead to above-average returns for this ETF, well into the next decade.

CSL shares

CSL has become a global market leader in blood plasma research and disease treatment. It now reaches more than 60 countries.

Its strong growth over the past few years has been driven by high investment in research and development to create new products.

CSL has invested significantly in research and development over the last 5 years. This creates a pipeline of new products. In FY19 alone it invested $832 million.

I believe that CSL is well-positioned to deliver strong earnings growth over the next 5 to 10 years. This I feel, is likely to lead to continued strong share price growth.

Macquarie Group shares

Macquarie is a global financial services giant, headquartered in Australia, with a core focus on international investment banking.

I think it is a good option if you want to gain some exposure to the financial services sector. I also believe that it is a better option than our 4 big banks.

Its business model has evolved significantly over the last decade. Macquarie has now become a more balanced and diversified business. Whereas, in the past, it was too heavily focused on a small product set. For this reason, it got into trouble during the global financial crisis.

Macquarie also currently pays an attractive trailing annual dividend yield of 3.6%.

More reading

• What the 10 largest companies in the world have in common
• Why is it so hard to outperform the ASX 200 index?
• CSL share price lower despite COVID-19 vaccine news
• Brokers name 3 ASX shares to buy today
• 2 ASX growth shares I’d buy before Afterpay shares

Phil Harpur owns shares of CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS and Macquarie Group Limited. 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.

The post Are Macquarie Group shares worth investing part of $3,000 into this June? appeared first on Motley Fool Australia.

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