Given the S&P/ASX 200 (INDEXASX: XJO) seems to be having a rough start to the trading day today, it got me thinking as to how I would deploy extra capital into the share market – a first world problem if there ever was one.
Lower stock prices means more bang for each buck invested in ASX shares, so I always think buying into a falling market is better than chasing a rising one.
So here’s how I would spend $25,000 on ASX shares today.
Westpac Banking Corp (ASX: WBC)
Westpac shares are down again today and are now trading at levels we briefly saw in the depths of the 2018 correction (and before that, 2012). Although there’s no doubt this ASX bank is facing some serious challenges this year, WBC shares are offering a starting yield of 7.07% on current prices – which makes this yield almost too tempting to turn down in my view.
Remember the value of Westpac’s full franking as well! This pushes the company’s gross dividend yield up to 10.10%. If Westpac is able to ride out of its capital raising and impending fines without too much damage (and that’s a big if), I think investors who buy in today might just lock themselves in to a lucrative dividend for many years to come.
CSL Limited (ASX: CSL)
CSL shares have just finished off a stellar year, going from around $187 to $275. Although the company has again built on this high watermark and is going for $283.70 at the time of writing, it has pulled back somewhat from the all-time high of $287 that was hit just before Christmas.
CSL is a company that doesn’t often give pull-back opportunities out, so today might be a good time to start a CSL position if you’ve been eyeing this one off. Saying that, this share is hardly a value investor’s dream with its current price-to-earnings ratio of 46.7. Still, I’m certainly watching this one today.
iShares Core S&P/ASX 200 ETF (ASX: IOZ)
I always say that if you’ve got money to burn but the stock market is at record highs (which it is), an index fund is always a good choice over having too much cash. IOZ is your typical ‘bread-and-butter’ ASX ETF – investing in the top 200 Aussie companies on the market. Since you’re splitting your money 200 ways, there’s plenty of diversification to add some ballast to your portfolio.
The post Where I’d spend $25,000 on ASX shares today appeared first on Motley Fool Australia.
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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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. 2020