Author: therawinformant

So, you’ve decided to start an ASX share portfolio. Well done on taking the plunge! I hope that you find share investing as interesting and rewarding as I do.

In this article, I’ll take you through 3 of my top share picks to get you started. Each of these companies operates in different sectors, providing you with market diversification.

Keep in mind, it’s always a good idea to expand your portfolio over time to ensure you have sufficient market diversification and not too much portfolio weighting in any one share. Try to build up your portfolio to have at least 10 shares over time.

CSL Limited (ASX: CSL)

CSL has had a great run on the Australian ASX over the past 2 decades. It is now the second-largest company on the ASX, with a market capitalisation of over $130 billion.

This ASX share has become a global market leader in blood plasma research and disease treatment. It has a strong global product reach spanning more than 60 countries. CSL is also playing a vital role during the coronavirus pandemic.  This includes entering into a new agreement to accelerate the development of a COVID-19 vaccine candidate.

I am confident that CSL is well-positioned to continue to grow its revenue base strongly over the next decade. A strong new product development pipeline will drive this growth. 

Macquarie Group Ltd (ASX: MQG)  

Macquarie is a global financial services business with a focus on international investment banking. It is a true Australian success story, with a strong track record of profitability over the last few decades.

Macquarie has become a more balanced and diversified business rather than one heavily focused on a small core group of operations, over the past few years. This diversification is what really appeals to me over Australia’s big 4 banks – Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking GrpLtd (ASX: ANZ).

I believe this ASX share is a great choice for both growth and income. It currently pays a forward dividend yield of 3.7%, partially franked.

Transurban Group (ASX: TCL)

My third ASX share pick to get you started in Transurban. It is one of the world’s largest toll-road operators. It is also the largest operator of private toll-roads in Australia.

In fact, Transurban has a virtual monopoly on the toll roads of Australia’s 2 largest cities; Sydney and Melbourne. In addition, it also has a number of toll roads in Brisbane and in North America.

Transurban has typically been viewed as a strong defensive share from the perspective that it is unlikely to be impacted by economic downturns. The coronavirus pandemic has, of course, been a once-in-century exception to this… Although hit hard during the early phase of the pandemic, Transurban reported a progressive recent recovery in traffic on its toll networks across Australia.

I believe that Transurban remains well-placed to capitalise on a growing population in both Australia and the USA over the next decade.

More reading

• 2 ASX dividend shares with yields over 6%
• Here are the 10 shares that move global markets
• The latest ASX stocks to be downgraded by top brokers today
• Westpac share price lower after admitting to underpaying staff
• ASX 200 up 0.55%: Cochlear jumps on FDA approval, Adbri crushed on contract loss

Phil Harpur owns shares of CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of Transurban 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.

The post Looking to start a share portfolio? Here are 3 quality ASX shares to begin with appeared first on Motley Fool Australia.

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The stock market crash caused many shares to become undervalued across a wide range of sectors. While some of them have recovered to a large extent, there are still opportunities for long-term investors to generate high returns.

With monetary policy stimulus likely to lead to an improving economic outlook, and the stock market having a solid track record of recovery, now could be an opportune moment to buy high-quality businesses. Over the long run, it could even lead to you obtaining a seven-figure portfolio.

Cheap stocks after a market crash

The prospects for a number of industries continue to be uncertain after the market crash. For example, changing consumer trends could impact on the retail sector, while weaker demand for resources may cause challenging financial prospects for many oil and gas companies.

Therefore, there are still a number of stocks that appear to offer wide margins of safety. Certainly, many of them are not as cheap as they were a number of weeks ago during what was one of the fastest declines in the stock market’s history. But investors who are looking to use the stock market’s cyclicality to their advantage, in terms of buying at low prices and selling at higher prices, appear to have a number of opportunities available.

Economic recovery

The market crash suggested that many investors are downbeat about the economy’s near-term outlook. While this may prove to be correct, in the long run the world economy has a solid track record of delivering positive growth following its recessions.

For example, it recovered to post strong growth following the global financial crisis. There were times during that downturn when it felt as though economic growth would never return. The same prospects may be felt by some investors in the coming months, but with major fiscal and monetary policy stimulus a successful economic recovery seems highly likely.

Economic growth is likely to produce increasingly favourable operating conditions for most sectors. This could boost their earnings growth rates and lead to higher stock prices in the coming years.

Relative appeal

The market crash may have dissuaded some investors from buying equities in the near term. They may currently favour less risky assets, such as bonds and cash, in order to preserve the value of their portfolios.

However, over the long run investor sentiment towards stocks is likely to improve. The return prospects available from other mainstream assets could prove to be highly disappointing due to low interest rates that may now be present for a number of years.

This lack of relative appeal may lead to rising stock prices over the coming years that lifts the value of your portfolio. Through buying shares today while they are undervalued, you could generate high returns that increase your chances of making a million.

More reading

• 10 more top broker ASX share picks for FY21
• Looking to start a share portfolio? Here are 3 quality ASX shares to begin with
• How I’d invest after the worst stock market crash in 10 years
• The 3 reasons why I’d build a dividend share portfolio right now
• Stock market crash round 2: why more buying opportunities could be ahead

Motley Fool contributor Peter Stephens 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 3 reasons why it’s not too late to make a million after the 2020 stock market crash appeared first on Motley Fool Australia.

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The recent market crash brought to an end a global bull market that had lasted in excess of ten years. While it is likely to have caused significant paper losses for many investors, it presents a buying opportunity for those individuals who have a long time horizon.

Through purchasing a diverse range of businesses with solid fundamentals, you can capitalise on the stock market’s future growth potential. It recovered from its previous crash in 2008/09 to produce new record highs, and is likely to do likewise over the coming years.

Recovering from a market crash

The recent market crash caught almost all investors by surprise. However, it is not without precedent, since the global stock market has experienced several sudden downturns in its history.

A common theme among them is that the stock market has always produced a rally that leads to new record highs. Certainly, that may seem unlikely in the recent aftermath of the 2020 market crash. However, the same could have been said during the global financial crisis and during any other previous downturn.

Investors who have the self-discipline to buy undervalued stocks after a market crash can generate high returns in the long run. In fact, market downturns often offer the best value opportunities due to weak investor sentiment.

A diverse range of sectors

After the recent market crash, it is unclear which sectors will produce strong growth in the coming years. Sectors such as retail, travel and leisure, mining, energy and many others face trading conditions that are exceptionally difficult to accurately predict at the present time. They may experience a fast return to pre-coronavirus operating conditions, but may equally have limited opportunities for growth.

Therefore, investing across a broad range of sectors could be an effective means of benefitting from the stock market’s recovery while limiting overall risk. Due to weak investor sentiment, many industries that offer long-term growth potential contain companies with wide margins of safety. Through holding a variety of them, you can reduce your reliance on a small number of businesses for your returns in what may prove to be an unpredictable investing environment.

Solid finances

Buying companies with solid finances after a market crash may also prove to be a sound move. They may be better able to cope with a period of economic weakness than their peers, and could even expand their market position at the expense of rivals that have less robust finances.

Through identifying businesses with large cash balances, access to banking facilities and debt levels that are serviceable even with reduced revenue in the short run, you can build a stronger portfolio that has less overall risk. It may also produce higher returns as you invest in companies that could have a higher chance of prospering in what may prove to be a period of weaker global economic growth.

More reading

• The 3 reasons why I’d build a dividend share portfolio right now
• Stock market crash round 2: why more buying opportunities could be ahead
• 2 ASX dividend shares with yields over 6%
• 2 dirt-cheap ASX shares to buy next week
• ASX 200 closes 0.4% higher, Cochlear share price up 6%

Motley Fool contributor Peter Stephens 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 How I’d invest after the worst stock market crash in 10 years appeared first on Motley Fool Australia.

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