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Where I would invest $10,000 in the share market

James Mickleboro

Last week economists at Macquarie Group Ltd (ASX: MQG) were the latest to rule out a rate hike by the Reserve Bank of Australia in 2018 and 2019.

Along with economists at Westpac Banking Corp (ASX: WBC), Macquarie Bank now believes a rate hike will come in 2020 at the earliest.

This means the paltry interest rates on offer from savings accounts are likely to be here for a long time to come.

Because of this, if I had $10,000 sitting in a bank account I would consider putting it to work in the share market.

Three shares that tick a lot of boxes for me are listed below. Here’s why I might invest those funds in these shares:

Bellamy’s Australia Ltd (ASX: BAL)

This organic infant formula company’s shares have been very volatile of late as the bulls and bears battle it out for control. I think investors ought to look beyond these short term moves and focus on its strong long-term growth potential from the lucrative China market and the demand for its premium infant formula. Its shares are trading on an above-average price-to-earnings ratio, but I remain confident that it will deliver strong enough long-term growth to justify this.

BHP Billiton Limited (ASX: BHP)

If you’re not averse to having resources shares in your portfolio then I would suggest you take a look at this mining giant. Its shares may have been on a strong run over the last couple of years, but I don’t believe it is too late to invest. Just as long as President Trump’s trade threats don’t lead to a trade war that stifles economic growth. If the global economy doesn’t grow as expected, it could put pressure on commodity prices and BHP’s margins.

Dicker Data Ltd (ASX: DDR)

Investors looking for alternatives to living off the interest of savings accounts or term deposits might want to consider this computer software and hardware wholesale distributor. This year the company plans to increase its dividend to a fully franked 18 cents per share, which based on its last close price equates to a 6.1% yield. With its core business performing strongly and its exposure to the cloud market, I expect FY 2019 could be another year of dividend increases.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Dicker Data 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.