The share market will rise and fall every day.
If you try to time it, the only winner will be your broker.
However over the long term (10 years or more) the share market has proven to be the best way to growth your wealth.
According to Vanguard, Australian shares returned 11.7% per annum over the 30 years to June 30, 2014. That would've turned $10,000 into a whopping $278,615!
However for investors looking to double their money in just 10 years, a more modest return is required.
In fact an average return of just 7.2% per year, with profits reinvested, will be enough to double an investment in the next 10 years.
Whilst nothing in the share market is guaranteed, history tells us the market has a habit of growing stronger over the long term. So even if the market tanks tomorrow, chances are, it'll live to fight another day.
However by identifying great companies trading at good prices, legendary investors such as Warren Buffett and Peter Lynch have shown us we can do significantly better than average, if we play our cards right.
4 stocks to buy and hold for the next decade
1. M2 Group Ltd (ASX: MTU) is the owner of Dodo, Primus, Commander and Eftel telecommunications brands. Its share price has grown rapidly over the past 10 years on the back of a successful acquisition campaign. Now the group is focused on expanding its range of services into insurance, roadside assistance and more. It also offers a handsome dividend yield.
2. Ardent Leisure Group (ASX: AAD) is a diversified leisure and entertainment company which owns brands such as AMF and Kingpin bowling, Goodlife Health Clubs and theme parks such as Dreamworld. The group also has a growing Main Event business in the US. It has achieved a compounded annual total shareholder return of 12.9% over the past 10 years.
3. G8 Education Ltd (ASX: GEM) has, like M2 Group, pursued an aggressive acquisition campaign in recent years. Since 2010, its total number of childcare centres has ballooned from 88 to over 450. Although its future looks just as promising as the past, a recent setback in its share price has resulted in a great buying opportunity for both dividend yield and capital gains potential.
4. Slater & Gordon Limited (ASX: SGH) is Australia's leading law firm with over 25% of the personal litigation market in Australia. However its growth potential lies in the UK, a highly fragmented market where it controls just 5% of the market. Management expect to derive around 45% of revenues from the UK market in 2015.
