If you’re a beginner investor, someone who has recently decided to begin your journey of wealth creation, congratulations!
Investing is (in my opinion anyway) one of the best things you can do with your time and money. But, investing can also be scary and financially dangerous. If you don’t know what you’re doing, or you try and master complex trading strategies straight out of the gate, it can lead to permanently losing you capital (which, from experience, is very painful).
So here are 2 ASX shares that I think would be great candidates for an investor who’s just starting out. They shouldn’t be where your investing journey ends, though. I think both of these ASX shares are a great foundation to build wealth from for a lifetime.
Coles Group Ltd (ASX: COL)
I’ve picked Cole because I think almost everyone in the country would be familiar with this company, how it works, how it attracts customers and how it makes money. Being able to understand the companies you own is a vital part of investing, and I think Coles is a great place to start learning as a newbie investor. It’s also a relatively ‘safe’ investment, in my view. Coles operates in a very defensive business that (in my view) faces very little prospects of being significantly disrupted or made redundant in the future (we all need to eat, after all).
Coles has also been moving to automate its supply chains and improve its home delivery options as well, which I think will lead to long-term value for shareholders. Coles also pays a robust and fully franked dividend, which on recent prices is worth a trailing 2.51% per annum.
Betashares Nasdaq 100 ETF (ASX: NDQ)
This investment isn’t an individual company, rather an exchange-traded fund (or ETF). ETFs work by holding a basket or collection of different companies all in one place. In Betashares’ case, the basket consists of the largest 100 companies on the United States’ Nasdaq exchange. And that’s why I think it’s a great choice for a beginner investor.
The Nasdaq is a modern rival to the old New York Stock Exchange and houses most of the newer, exciting tech companies. You would probably be familiar with its top 5 holdings, which in order, are: Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) and Facebook, Inc. Common Stock (NASDAQ: FB).
The other well-known companies within this ETF include Netflix Inc (NASDAQ: NFLX), Adobe Inc (NASDAQ: ADBE), Tesla Inc (NASDAQ: TSLA), and Paypal Holdings Inc (NASDAQ: PYPL).
Betashares also pay a healthy trailing dividend of 1.9%. Many Aussie investors don’t ever venture beyond the companies on the ASX for investing. But I think this ETF is a great way to invest in companies that actually dominate our lives. Plus, you can tell your friends you own shares in Tesla, Apple and Facebook, which is pretty cool!
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- Will Facebook stock surge to $300?
- These are the 4 cheapest ETFs on the ASX
- Add some diversity to your portfolio with these quality ETFs
- Where I would spend $2000 on ASX shares right now
- Here are 3 top ASX tech shares to buy with $5,000 today
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Facebook, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Facebook, Microsoft, Netflix, PayPal Holdings, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, BETANASDAQ ETF UNITS, Facebook, Netflix, and PayPal Holdings. 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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