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Where I would invest $10,000 in ASX shares today

Sebastian Bowen
Child investing

It’s an interesting time in the share market these days – with interest rates at record lows and a seemingly sluggish economy, the stock market still seems hell-bent on reaching new record highs. It’s a time to be ‘optimistically cautious’ in my opinion, so here’s how I would deploy $10,000 into the ASX today.

South32 Limited (ASX: S32) – $3,000

South32 is one of the biggest bargains out there right now, in my opinion. Shares of this diversified miner have been forgotten about as money chases iron and gold miners and the price upswings in those commodities, but South32 remains a quality and diversified resource company that’s well worth consideration. South32 shares are nearing a 52-week low of $3.00 and are offering up a 4.66% dividend yield on current prices.

InvoCare Ltd (ASX: IVC) – $3,000

InvoCare is the largest funeral provider in Australia and also has a significant presence beyond our shores and has just announced a new acquisition this morning. I love InvoCare as a company because it has managed to carve itself a huge market share in an otherwise fractured and decentralised industry. Management has shown what it takes to reward shareholders and grow the business, long-term. Although InvoCare shares are looking expensive at the moment, often if you wait for the ‘right price’, you can be waiting forever, so maybe it’s worth opening a position anyway. You can always load up the truck if there is a dip down the road.

Afterpay Touch Group Ltd (ASX: APT) – $3,000

Afterpay is another fantastic company at an even more fantastic price. The market is currently valuing Afterpay at over $6 billion, even though it has yet to make a profit. Saying this, Amazon wasn’t profitable for years and sometimes you have to ‘risk it for the biscuit’. I’d be happy to take a punt with Afterpay, there’s no doubt its strong growth numbers and powerful brand have a lot going for them.

Cash – $1,000

With the market reaching record highs, now is a good time to start building up your cash position (in my opinion). Leaving at least 10% or your portfolio in cash would be prudent and allow you to take advantage of any market dips in the future, that history tells us is very likely.

Foolish takeaway

In this market environment, the two most important things to prioritise (in my view) are making sure you are only invested in high-quality companies and making sure you have some cash available.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended InvoCare 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