Australia Markets open in 5 hrs 46 mins

How I would spend $20,000 on ASX shares this week

Sebastian Bowen
Best ASX share

Happy Monday! With the S&P/ASX200 (ASX: XJO) index opening higher this morning, it seems the share market has grasped the new week with an optimistic tone. After last week’s sell-off, it’s certainly a welcome change to have the index in the green today.

With this enthusiasm taken on board, here’s how I would spend $20,000 on ASX shares this week.

National Australia Bank Ltd (ASX: NAB)

NAB shares have been caught up in the AUSTRAC disaster that has engulfed Westpac Banking Corp (ASX: WBC) over the last week, with the bank losing nearly 4% off the top of its share price. Still, there is nothing out there linking Westpac’s misfortunes with NAB and so I think this dip might be a good buying opportunity.

With NAB’s new annual dividend of $1.72 per share, this bank is offering a starting yield of 6.55% (or 9.36% grossed-up). For this yield alone, I think NAB is a solid buy today, despite the ongoing pressures the banking sector is facing.

Pact Group Holdings Ltd (ASX: PGH)

Pact Group shares are up 9% today to $2.72 (at the time of writing), despite no official news coming out of the company. PGH shares have spent most of 2019 trending lower, not helped by a series of earnings downgrades that the company has been forced to endure.

However, these downgrades have primarily been caused by higher input costs, which I expect Pact will be able to pass on to its customers in time. Therefore, I think this stock was oversold, and now may be returning to a fair share price. Thus, today might be a good time for any value investors out there to pick up some Pact shares.

iShares S&P 500 ETF (ASX: IVV)

Another option worth considering today is this S&P 500 ETF. The S&P 500 index follows the largest 500 companies on the US markets, and with this ETF you are getting a small slice of each.

Warren Buffett himself advocates this particular index, calling it a piece of America, so who am I to argue. I also think it’s a great choice for the tiny fee IVV charges – just 0.04%.  With last week’s sell-off, adding to an index fund like IVV could be a prudent choice this week.

Foolish takeaway

With these 3 shares, I think we are getting some of the best deals the markets are offering as we start another week off. I’m tempted by NAB’s share price today, but IVV is  such an easy share for diversification, so I think that’s looking attractive too!

The post How I would spend $20,000 on ASX shares this week appeared first on Motley Fool Australia.

I would also consider some of these winners here! Our Top 3 Blue Chip Shares for 2020 – NOW AVAILABLE!

You’re invited! For a limited time, The Motley Fool Australia is giving away an urgent new investment report detailing our 3 TOP BLUE CHIP SHARES to own in 2019.

So if you like trustworthy, stable, high-performing companies that pay fat fully franked dividends – we’ve got you covered!

Stock #1 is a beloved old Australian company turning its attention to high-margin businesses... and rapidly returning cash to shareholders with its hefty dividend...

While Stock #2 is an online powerhouse that’s rapidly gaining market share all around the globe... poised for years (or even decades) of tremendous growth...

Even better, Stock #3 offers a whopping 6.5% grossed-up dividend! Which beats the rates on term deposits right out of the water – and offers the potential for capital gains, too.

You can discover all three shares inside our new report right now. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a LIMITED TIME ONLY!


More reading

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited and Pact Group Holdings Limited. The Motley Fool Australia owns shares of National Australia Bank Limited. 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