The only thing sadder for me to see than someone who has never invested is to see someone try and get started with investing, make a mistake and give up in contempt.
Like any craft or skill, investing requires patience, repeated error correction and a long path of growth and learning to become accomplished.
The biggest mistakes I see new investors make is picking the wrong shares, so here are 2 ASX shares that I think would be perfect for anyone setting out to build a starter ASX portfolio.
Magellan High Conviction Trust (ASX: MHH)
This listed investment trust (LIT) is a new offering from Magellan but has already chalked up an 11% price gain since its October IPO of $1.50 per share. This LIT aims to invest in what Magellan calls ‘a concentrated portfolio of high-quality companies. These 8–12 companies are typically from the US and currently include Alphabet (Google), Apple, Microsoft and Visa, although the recent addition of Alibaba shows they can look beyond the States too.
Since you don’t actually have to do any of the real ‘investing’ with MHH, I think it makes it a great share for beginners to own in a starter portfolio. You are also getting exposure to some of the best companies that exist outside Australia, so there’s a great diversification benefit too.
Vanguard All-World ex-U.S. Shares Index ETF (ASX: VEU)
VEU is another managed investment, but this one takes the form of an exchange traded fund (ETF) rather than a LIT. ETFs are more passive investments, which typically follow an index rather than having a team picking stocks. With VEU, this index is the FTSE All World ex-US Index, which currently holds 3,380 stocks from all countries across the globe, excluding the US.
You’re getting everything from the UK-based Royal Dutch Shell and the Japanese Toyota to the Swiss giant Nestle and Chinese ecommerce giant Tencent with this ETF. This geographic diversification and wide range of globally dominant companies makes VEU a top investment for a beginner in my view.
These 2 investments would make great additions to a starter portfolio. Both outsource the actual investing decisions, which takes a lot of the pressure off and reduces the risk of silly mistakes.
The post 2 ASX shares for a starter portfolio appeared first on Motley Fool Australia.
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Motley Fool contributor Sebastian Bowen owns shares of Magellan High Conviction Trust. The Motley Fool Australia has no position in any of the stocks mentioned. 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.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019