It can be hard to know which ASX shares to buy when you’re just beginning. I mean, the S&P/ASX 200 Index (ASX: XJO) alone has roughly 200 shares to buy.
I think keeping things simple is the key when you’re first investing. That means you don’t need to bet on the “next Afterpay” or worry about someone that made millions in bitcoin.
Here are a few of my top ASX shares to purchase as a beginner looking to invest in ASX shares today.
3 ASX shares to buy for beginners
When times are uncertain like this, a few large-cap dividend shares can be just the ticket. Large-cap shares often have strong balance sheets, steadier earnings and less volatility compared to some of the smaller ASX shares.
I think it’s good to start by looking at BHP Group Ltd (ASX: BHP). BHP is among the largest ASX-listed shares on the market with a $149 billion market capitalisation. The group’s shares also have a handy 6.79% dividend yield and are trading at a price-to-earnings (P/E) ratio of 10.88. That means for every $10.88 you pay for BHP shares, you should see roughly $1 in company earnings.
BHP is a solid buy for almost any portfolio. The mining sector could have some tough times ahead but the technical environment looks alright to me. China’s increasing development and major Australian Government infrastructure investments are a couple of the tailwinds I can think of for BHP shares.
Another great share for beginners is Telstra Corporation Ltd (ASX: TLS). Telstra has been a staple of the average investment portfolio for decades and is yielding 3.30% right now. With more demand for mobile infrastructure and a shift towards working from home, I see Telstra’s business booming despite the NBN Co competition.
Finally, an Australian real estate investment trust (A-REIT) could be the way to go. A-REITs invest in a portfolio of property and you can then buy ASX shares in those funds for easy property exposure. That seems easier to me than saving for an investment property with strong dividend income and diversification benefits.
An A-REIT like Scentre Group (ASX: SCG) could be on the cheap side right now. Scentre shares are down more than 40% in 2020 but things are looking up for the Aussie economy. With an 8.73% dividend yield, Scentre could be a top ASX dividend share for beginners to buy today.
Foolish takeaway
While ASX dividend shares are great for any portfolio, there are inherent risks. Dividends are at the discretion of management and when times are tough, they may restrict these payments. That means you can’t bank on dividend income being steady forever.
When it comes to buying ASX shares as a beginner, slow and steady wins the race. Consistently putting away extra cash into a diverse range of high-quality companies is the way to build long-term wealth.
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More reading
- Top brokers name 3 ASX 200 shares to sell next week
- Top brokers name 3 ASX 200 shares to buy next week
- What to watch on the ASX 200 next week
- The ASX 200 blue chip shares I would buy with $5,000 after the market crash
- Top broker urging you to buy this ASX 200 retail stock next week
Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Scentre Group. 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.
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