It may not seem like a lot in the grand scheme of things, but if you can invest $10,000 in the share market each year for a long enough period of time, it has the potential to grow into something significant.
According to Fidelity, the local share market has provided an average annual return of 9.1% over the last 30 years.
If it does this again over the next 30 years and you invest $10,000 into the share market each year, after three decades your investment will have grown to be worth approximately $1.5 million.
While there is no guarantee that this will be the case over the next 30 years, I believe this level of return is possible if investors choose wisely.
Here's where I would consider investing that first $10,000:
a2 Milk Company Ltd (Australia) (ASX: A2M)
Although this fast-growing dairy company's shares look expensive on paper, it continues to deliver the level of growth I believe is required to justify the significant premium. For the first four months of FY 2018, a2 Milk has delivered a 68.9% increase in revenue and a 120.8% increase in EBITDA on the prior corresponding period. While its EBITDA growth is expected to moderate in the second-half as its marketing spend increases, I still expect infant formula sales in China to be the catalyst to another year of explosive growth.
Aristocrat Leisure Limited (ASX: ALL)
I think that this gaming technology company would be a great buy and hold investment option due to its fast-growing digital portfolio. Its digital business has not just seen the number of daily active users grow at a strong rate, but also the average daily revenue per user. This is a winning combination and is likely to improve further following the US$500 million acquisition of mobile game developer Plarium.
Nextdc Ltd (ASX: NXT)
With the majority of popular computer software now cloud-based, I believe this leading data centre operator is in a great position to deliver strong earnings growth for the foreseeable future. Testament to the quality of its data centres is the fact that NEXTDC counts many of the world's top cloud-services companies, enterprises, and government agencies amongst its growing customer base. These include the likes of Google and Amazon for their popular cloud-service products. Its shares may be expensive, but I expect them to justify this in the long-term as cloud computing continues its incredible rise.
