If you’re looking to invest in shares for the first time then good job! Starting to invest is one of the best things you do can do for your long-term wealth.
But the question is, where are you supposed to start? There are thousands and thousands of shares that you can pick from.
Here are three ideas:
BetaShares NASDAQ 100 ETF (ASX: NDQ)
People often say that you should invest in what you know, but many of the things we use in our daily lives like our phones, Google, Facebook, Netflix and so on are owned by overseas businesses.
We can get exposure to all of these large US-based technology businesses with an investment in this NASDAQ exchange-traded fund (ETF) which invests in 100 of the largest businesses on the tech-heavy NASDAQ. An ETF is a way for us to buy exposure to many shares in a single investment.
Its largest positions include Apple, Microsoft, Amazon, Facebook, Alphabet, Intel, Adobe, Netflex, Paypal and so on.
Many of the world’s best businesses are within this ETF, which is why it has performed so strongly. Over the past three years it has generated returns (after fees) of 23.3% per annum. Not every 3-year period will look remotely as good as that, but I think it will continue to be a solid performer.
Vanguard Australian Share ETF (ASX: VAS)
I understand if you’d prefer to start with Australian ASX shares. An easy way to start with ASX shares is just to buy a piece of all of them with an ASX ETF. Vanguard is a world leader in low-cost ETFs, Vanguard doesn’t try to make a profit – it passes on ‘profit’ in the form of even lower fees.
This ETF invests in 300 of the ASX’s biggest businesses including the big ones like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and CSL Limited (ASX: CSL) as well as smaller ones such as Afterpay Touch Group Ltd (ASX: APT) and A2 Milk Company Ltd (ASX: A2M).
The ASX as a whole is not really known as a growth index, many of the biggest constituents are large dividend players.
This ETF will track the downs and the ups of the ASX share market as it slowly climbs higher over the long-term.
Webjet Limited (ASX: WEB)
Perhaps you want to begin with a share that could be a good candidate to beat the share market. I think Webjet could be that pick in 2020.
It’s a travel technology business that services both consumers and the business to business (‘B2B’) market. To beat the long-term average market return of 10% a year I think you need to pick businesses that can grow their profit by more than 10% a year for a long period. Webjet has been doing that and I think it could keep growing quickly over the next five years.
A business that is aiming for higher profit margins and global expansion is certainly one to watch. As a bonus, it could become a takeover target later this year if it stays around this price.
I think each of these shares could be good starting points for a beginner investor. If I were choosing for myself I’d go for Webjet this year because I think it has a very good chance of beating the market.
The post 3 ASX shares to buy for a beginner’s portfolio appeared first on Motley Fool Australia.
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and CSL Ltd. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Webjet 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.
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. 2020