Buying high quality shares and holding them for long periods may not be an exciting get-rich-quick strategy, but it is a proven strategy that has the potential to generate significant wealth over the long term.
Some of the world’s richest people, such as legendary investor Warren Buffett, have used this strategy to build their fortunes and there is nothing to stop you from doing the same.
With that in mind, here are three shares that I think would be fantastic buy and hold options:
This New Zealand-based infant formula and fresh milk company has been one of the best performers on the ASX over the last five years. This strong form has been driven largely by the increasing demand for its a2-only infant formula products in the China market. The good news is that the company still only has a modest share of the key market, thus giving it plenty of room for growth in the coming years. Combined with its expanding fresh milk footprint and its sizeable cash balance that could be used for acquisitions, I believe it is well-placed for further strong growth over the next decade.
Another ASX 200 share that I think could generate strong returns for investors over the next 10 years is Altium. It is a printed circuit board (PCB) focused design software company which look perfectly positioned to benefit from the rapidly growing Internet of Things market. This market is expected to grow to be worth upwards of US$1.2 trillion in 2022. Given how integral PCBs are in the design process for IoT devices, Altium’s industry-leading software looks likely to be in demand with product designers and engineers for a long time to come.
A final buy and hold option to consider is CSL. Whilst its shares trade at a notable premium to the market average, they always have done. And yet despite this, they have consistently generated outsized returns for investors over the last decade. Pleasingly, I expect this to remain the case over the next 10 years thanks to the quality and growth prospects of its CSL Behring plasma therapy business and its Seqirus influenza vaccines business.
And here is a fourth share which could provide investors with the strongest returns of them all over the next 10 years.
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Returns as of 6/5/2020
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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. The Motley Fool Australia owns shares of A2 Milk and Altium. 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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