It’s a rare ASX share which can give investors both growth and income. But that’s exactly what we’re trying to find today. Normally, investors either stick with a ‘growth strategy’ or an ‘income strategy’ but with Magellan High Conviction Trust (ASX: MHH) and NIB Holdings Limited (ASX: NHF) shares, we’re looking for both. 

Why wouldn’t you want the benefits of a growing company and one that pays you income along the way? 

Magellan High Conviction Trust 

This Listed Investment Trust (LIT) from Magellan Financial Group Ltd (ASX: MFG) is geared for growth. It only invests in 8-12 companies that Magellan decides are the ‘best in the world’. Right now, this includes Alibaba, Alphabet, Microsoft and Visa.

I think this trust is a great long-term investment for both growth and income. It’s built to harness the potential of companies that compound earnings growth at market-beating levels. All of its holdings also operate in growth industries like e-commerce and cashless payments.

But there’s potential for income, too. MHH aims to pay a decent 3% distribution yield every year to its investors. You can either take this in cash or choose to reinvest it for a 5% discount – a nice perk. For its exposure to some of the best growth companies in the world as well as its shareholder-friendly dividend policy, I think MHH is a top buy today for both growth and income.

NIB Holdings 

NIB is the second-largest ASX-listed health insurance provider after Medibank Private Ltd (ASX: MPL). Even though NIB shares have recovered substantially since March, the NIB share price remains well below its 52-week high of $8.20 today. Thus, I think it could be a great time to pick up this company on current prices ($4.69 at the time of writing).

NIB has a long history of providing both growth and income for ASX investors. Its shares have almost quadrupled over the past decade and it has grown its dividend meaningfully over the same period. Right now, NIB is offering a trailing 4.81% dividend yield, fully franked.

The private health insurance industry is facing a few headwinds in the coming years, including expensive premiums and falling membership from young Australians. But the importance of this industry towards government expenditure on healthcare will give providers like NIB accommodative government policy which, in my view, will ensure its prosperity in the years ahead.

Thus, I think this ASX company is a good long-term buy today for both growth and potential income down the road.

More reading

• Top brokers name 3 ASX 200 shares to sell next week
• ASX 200 rises 0.8%, travel shares fly higher
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 investor in your 40s? 3 shares to buy now
• Ready to invest your first $1,000? Try these 2 ASX shares

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Magellan High Conviction Trust, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares) and Visa. The Motley Fool Australia has recommended Alphabet (A shares) and NIB Holdings 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.

The post NIB Holdings and 1 other ASX share which I would consider buying for growth and income appeared first on Motley Fool Australia.

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I think that 2020 has taught us some very interesting investing lessons so far.

The S&P/ASX 200 Index (ASX: XJO) has been on an incredible journey this year. Between the start of the year and the February 2020 peak the ASX 200 rose 7%. From that peak the ASX then dropped 36.5% to 23 March 2020. From that low it’s risen 35.2%. What a ride.

I believe there are a number investing lessons already this year:

Volatility can strike at any time

At the start of the year it seemed as though everything was lining up for a great year. Brexit uncertainty was passing. The trade war between the US and China seemed to be settling down. Australia’s property market seemed to be in a good position.

Who would have thought that the market would have dropped 35% by March 2020?

Sometimes there are uncertain events in investing that can suddenly pop up out of nowhere. That’s why I think it’s a good idea to always have a bit of cash on the side to take advantage of those opportunities.

Be greedy when others are fearful

This is certainly not a new lesson for some people, investing legend Warren Buffett has been telling us that for a long time.

But for many Australian investors, this is the first time that they’re seeing Australia in a recession. Plenty of people are fearful about what the economic effects of the coronavirus will be.

Share prices don’t magically drop on their own. There has to be genuine fear for a particular reason, such as a global pandemic. When you look at the share price graphs, it’s these selloffs that present the lowest share prices. So, you just have to be brave and greedy at times like this (or to be more precise, in March). You don’t know whether the market will drop 10%, 20%, 30% or more.

Investing is for the long-term

What’s happening in 2020 is some of the most challenging global circumstances in a century.

But it will pass. And governments and central banks have provided enormous support. 

The world moved on from the GFC. It recovered from the Spanish Flu. The earnings in FY20 and probably FY21 will be affected. But by FY22 things could be back to normal.

We need to be investing for the long-term with our hard-earned money. There will be future bumps along the way, we just need to be brave, stay invested and keep investing.

More reading

• Chief analyst expects Australian share market to continue rising, says ASX 200 could approach 6,600 in the weeks ahead
• Leading brokers name 3 ASX 200 shares to buy today
• Flight Centre share price and other ASX 200 travel shares look set to continue rising
• Will ASX 200 shares hit a record high in June?
• ASX 200 jumps 2.5%: Big four banks surge higher, CSL announces an acquisition

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 What 2020 has taught us about investing appeared first on Motley Fool Australia.

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