If you’re new to investing and are wanting to invest $500 into the share market, I believe you should be thinking long term.
This is because brokerage costs (which are usually around ~$10 a trade) will eat into your profits if you are constantly buying and selling shares.
Also, if you invest with a long term view, you can benefit from the power of compounding.
With that in mind, here are two top ASX shares which I think could be great options for a $500 investment:
a2 Milk Company Ltd (ASX: A2M)
I think a2 Milk Company could be a good place to invest $500. It is one of the ANZ region’s leading dairy companies and sells fresh milk, infant formula, and milk powder. Over the last few years a2 Milk Company has been growing its earnings at a rapid rate. The good news is that I believe it is well-positioned to continue this positive form for some time to come.
This is thanks to the strong demand it continues to experience for its infant formula products in China, its expanding fresh milk footprint in North America, and its growing fresh milk market share in Australia. In addition to this, there is speculation that a2 Milk Company could be looking to put its sizeable cash balance to work with acquisitions or new product launches. This could give its growth a boost in the coming years.
Nearmap Ltd (ASX: NEA)
Another ASX share to consider investing $500 into is Nearmap. It is one of the leading aerial imagery technology and location data companies. At present the company has operations in the ANZ and North American markets and is generating sizeable recurring revenues from both regions.
And while its performance has been a bit shaky over the last 12 months due to customer churn (not competition related), I remain very confident in its long term growth prospects. This is due to the quality of its product suite and its strong position in a fragmented market worth an estimated $2.9 billion per year. Another positive is that Nearmap has the option to increase its addressable market by expanding into other territories, such as the UK, in the future.
5 stocks under $5
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
- a2 Milk and 1 other quality ASX 200 share to buy and hold beyond 2026
- Why I would buy and hold NEXTDC and these quality ASX growth shares
- Why I would buy Pushpay and these ASX growth shares in August
- 2 ASX tech shares to buy and hold beyond 2025
- These are the 10 most shorted shares on the ASX
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Nearmap 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 post Where to invest $500 into ASX shares immediately appeared first on Motley Fool Australia.
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