I continue to believe that one of the best ways to create wealth is to buy quality shares and hold them for the long term.
This is a strategy that has been used by legendary investor Warren Buffett. And you can't argue with his track record, can you?
With that in mind, here are three top S&P/ASX 200 Index (ASX: XJO) shares that I think would be quality buy and hold options:
Altium Limited (ASX: ALU)
I think Altium would be a great buy and hold option for investors. The printed circuit board (PCB) design software provider looks set to be a big winner from an Internet of Things (IoT) market which is forecast to grow from US$212 billion in 2019 to US$1.6 trillion in 2025. This is because almost all IoT devices have a PCB inside them. Given the meteoric rise of this market, demand for its award-winning PCB design software platform looks set to grow rapidly over the next decade and drive strong earnings growth as its scales.
REA Group Limited (ASX: REA)
This property listings company's shares have come under a lot of pressure over the last few weeks. This has been caused by concerns over the impact the coronavirus pandemic is having on the housing market. Whilst I don't believe these concerns are unwarranted and expects its performance in the near term to be impacted, I believe its long term outlook is as positive as ever. This could make it worth taking advantage of its recent share price weakness and investing in the company with a long term view.
Xero Limited (ASX: XRO)
A third buy and hold option for investors to consider is Xero. The leading provider of business and online accounting software has really caught the eye over the last few years. This is thanks to the growing popularity of its platform and the shift to online accounting. For example, in the first half of FY 2020, Xero delivered strong growth across all key metrics. Subscribers lifted 30% to 2,057,000, annualised monthly recurring revenue lifted 30% to NZ$764.1 million, EBITDA jumped 91% to NZ$65.9 million, and its total lifetime value of subscribers increased 37% to NZ$5.4 billion. The good news is that due to its massive market opportunity, I believe this solid growth can continue for some time to come.
