The availability of low cost brokerage and market volatility during the pandemic appears to have led to a surge in day trading activity from investors around the globe.
This is certainly evident on social media platforms, particularly on Facebook in stock tipping groups.
While it is certainly true that you can make money trading shares, it is worth remembering that statistically it creates far more losers than winners.
What should you do?
As tempting as it is to trade shares, I believe the best way to build your wealth is to invest with a long term view. By buying and holding quality ASX shares, investors can take advantage of compounding.
But which shares should you buy and hold? Three top options that I would buy with a long term view are listed below. Here’s why I think they are quality options:
Appen is a leading developer of high-quality, human annotated datasets for the machine learning and artificial intelligence markets. These markets are expected to grow materially in the future, which can only be a good thing for Appen. Approximately 10% of spending in these markets is estimated to be made on the data labelling that it is an industry leader in. In light of this, I expect demand for its services to continue to grow in the coming years. This should support strong earnings growth over the 2020s.
Cochlear is a global developer, manufacturer, and distributor of cochlear implantable devices for the hearing impaired. I think it would be a great long term option due to the ageing populations tailwind. This is because as people age, their hearing will more often than not require some form of assistance. So, with the World Health Organization estimating that there will be almost three times more people over the age of 65 by 2050 than there were in 2010, demand for Cochlear’s industry-leading cochlear implantable devices looks likely to grow strongly over the next few decades.
A final option to consider buying is Kogan. It is Australia’s leading ecommerce company and our homegrown answer to Amazon. I think it would be a top option due to the ongoing shift to online shopping and its increasingly popular website. As of last year, just 10% of shopping was made online. I expect this percentage to grow materially over the next decade, particularly given the pandemic’s impact on consumer behaviour. Combined with potential earnings accretive acquisitions, I believe this positions Kogan well for long term growth.
These 3 stocks could be the next big movers in 2020
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
*Returns as of 6/8/2020
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and Kogan.com ltd. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.