Beginners often enter the stock market and start looking for ASX shares to buy when we are in a bull market like right now. They think that no matter what people are buying, almost everything appears to be going up in value. I first started investing after the 1987 crash, but I got really active during the dot-com bubble. For some reason, I thought Fedexing dog food around the country would be a winning formula!
I believe that just as it did then, this bull run will come to an end and that eventually, all bubbles burst. So which shares should beginner investors consider buying in this volatile market? Should they bet on the shooting stars like Afterpay Ltd (ASX: APT)? Or maybe just hide out in bona fide blue chip shares like the Commonwealth Bank of Australia (ASX: CBA)? What is the best course of action?
First, take it easy
You’re not going to become a millionaire in a day or even a year. However, if you choose the right shares to buy, it’s possible you could become one in ten years – just not tomorrow.
On that note, I believe Domino’s Pizza Enterprises Ltd. (ASX: DMP) is one of the stand out performers of the year so far. The Domino’s share price has beaten the S&P/ASX 200 Index (INDEXASX: XJO) over the past five years. This year it is up by 22.6% year to date. In addition, from its low point on 19 March, the Domino’s share price has risen by over 50%.
With an average 28% price increase every year over the last ten years, I think this is a solid share with a lot of strong years of growth ahead of it.
Shares to buy for growth
I think Kogan.com Ltd (ASX: KGN) is another great ASX share for beginner investors to consider. Kogan is a highly successful eCommerce company and a great story of Australian entrepreneurialism at its best. Some investors are concerned about the impact of Amazon.com on the Kogan share price. However, I feel this is a misplaced concern. Kogan does a lot more than sell electronic devices and white goods online.
It also sells furniture and insurance, as well as mobile phone and internet plans. Not only that, but since Kogan also manufactures its own products, the company actually sells them on Amazon!
Kogan.com has increased its sales revenues by around 14%, on average, every year over the past three years. In a period of just four years, a purchase of Kogan shares has returned its investors more than 9 times their initial investment.
Foolish takeaway
I believe both Domino’s and Kogan shares represent solid, long-term buys for beginner investors. They are reasonably priced and offer investors a good chance of continued share price growth over time. Both companies have good track records of achievement and have proven they can survive throughout a crisis.
Our free report below has more ideas on some cheap shares for beginner investors.
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
- Has the Afterpay share price become too expensive to buy?
- Why A2 Milk, Afterpay, Mesoblast, and Temple & Webster are pushing higher
- Why Zip Co and these All Ords shares have doubled in 12 months
- Next phase of bull market could see ANZ Bank outperform Afterpay
- Is the Macquarie share price a solid buy today?
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Amazon and Domino’s Pizza Enterprises 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.
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