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Where should you invest your money in 2020?

James Mickleboro

When it comes to investing, there certainly are a lot of options for you to choose from.

Investors can put their money into property, term deposits, bonds, managed funds, and, of course, the share market.

Historically, the share market has been the asset class that has generated the strongest returns for investors.

According to the Vanguard 2018 index chart, Australian shares have been the best performing assets locally over the last 30 years. During this time they have generated an average annual return of 9.1%.

And barring a market meltdown between now and then end of the year, the local share market looks set to increase its average return following a stellar 11 and a half months in 2019.

What about 2020?

Whilst nobody can predict what will happen in 2020, I’m confident that shares will continue to perform strongly next year.

With interest rates at ultra low levels and likely to go lower and the US and China appearing to have averted a trade war, conditions look ripe for another year of bumper gains.

In light of this, I would be investing my money in the share market again in 2020.

But which shares should you buy?

Based on their current valuations and growth profiles, I think the following three shares are the ones that could outperform in 2020:

a2 Milk Company Ltd (ASX: A2M)

I feel this New Zealand-based fresh milk and infant formula company could be a solid performer in 2020. Demand for its infant formula continues to grow strongly, putting a2 Milk Company in a position to deliver bumper earnings growth over the medium term.

Appen Ltd (ASX: APX)

Appen is the global leader in the development of high-quality, human annotated datasets for the machine learning and artificial intelligence markets. Given how quickly these markets are growing, I expect demand for its services to remain very strong. And if its acquisitions deliver on their promise, Appen could surprise to the upside.

Webjet Limited (ASX: WEB)

Webjet is a leading online travel booking company. Due to the continued shift to online booking, its popular and diverse brands, and its focus on margin expansion, I feel Webjet is well-placed to deliver strong earnings growth in FY 2020 and for many years to come.

The post Where should you invest your money in 2020? appeared first on Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk and Appen Ltd. 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. 2019