For the 20 years prior to December 31 2014, an investment in Australian shares provided investors with an average annual return of 8.7% according to data provided by the ASX.
I think that's a great return, especially when you consider that the global financial crisis is part of this timeframe.
If history repeats itself over the next two decades then Australian investors can become millionaires simply by investing $20,000 each year into the local share market.
With an average annual return of 8.7% a $20,000 initial investment with a further $20,000 invested each year for 20 years will be worth almost $1.1 million.
Who knows, you might even get there sooner if you pick some quality market-beating shares. Here are two which I think could do just that:
Altium Limited (ASX: ALU)
These days it seems that everything from your television to your fridge is connected to the internet. In order to connect to the internet these devices will almost always have a printed circuit board (PCB) inside them. As a PCB software provider I believe Altium is positioned perfectly for high levels of growth in the next decade. Management certainly agrees with this view. It expects to more than double revenue to US$200 million by 2020.
Mayne Pharma Group Ltd (ASX: MYX)
This pharmaceutical company may be going through a rough time right now as price-fixing allegations weigh heavily on its shares. But management has stated numerous times that any financial penalty imposed on it would not be material. I believe Mayne Pharma has enormous long-term growth potential thanks to its lucrative pipeline of drugs. For this reason I think investors should look beyond these concerns at the bigger picture and grab its shares whilst they are dirt cheap.
