If you want to grow your wealth, then buy and hold investing with ASX shares could be the way to do it.
That's because the longer you hold onto ASX shares, the more you benefit from the power of compounding.
For example, if you were to invest $5,000 per year into ASX shares and generated a 10% per annum return, your portfolio would grow to be worth over $900,000 in 30 years.
But which ASX shares could be great options for that first $5,000 investment? Let's take a look at five ASX shares that could generate lasting wealth.
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5 ASX shares to buy for lasting wealth
Firstly, when picking ASX shares to buy and hold for the long term, you'll want to focus on quality and the sustainability of competitive advantages.
Companies like CSL Ltd (ASX: CSL) and ResMed Inc. (ASX: RMD) in the healthcare sector immediately spring to mind. Both companies are leaders in their field and have very bright long term growth outlooks.
The team at Morgans is very positive on both companies. It has an add rating and $315.40 price target on CSL's shares and an add rating and $32.82 price target on ResMed's shares.
A couple more ASX shares that could be destined to generate lasting wealth for their shareholders are in the tech sector. They are rapidly growing location technology company Life360 Inc (ASX: 360) and cloud accounting platform provider Xero Ltd (ASX: XRO).
Goldman Sachs is a big fan of both companies and has a buy rating and $14.20 price target on Life360 shares and a buy rating and $152.00 price target on Xero's shares.
A fifth and final ASX share for investors to consider as a buy and hold investment is Lovisa Holdings Ltd (ASX: LOV). It is a fashion jewellery retailer with a fast-growing global store network.
Morgans has been very impressed with the company's growth in recent years and believes this positive form can continue. In fact, last year, the broker spoke very positively about its long-term growth outlook. It said:
"LOV continues to impress us with the rate at which it opens new stores and expands into new markets. As we have said before, LOV may just prove to be one of the biggest success stories in Australian retail. LOV is showing every sign of becoming a global brand."
In light of the above, the broker recently put an add rating and $35.00 price target on the ASX share.
