ASX uranium stock Nexgen Energy (Canada) CDI (ASX: NXG) may play a major part in the forecast significant growth of nuclear power. Leading fund manager L1 is a fan of this business, despite a recent dip in the price of the commodity.

Uranium prices fell back from 15-year highs recently following stronger-than-expected 2024 production guidance from a big player in the sector, Cameco, and potential US sanctions on Russian nuclear fuel exports not going ahead.

Why L1 is so excited by this ASX uranium stock

The fund manager believes the uranium market still has positive fundamental supply and demand tailwinds over the medium to long term.

NexGen is preparing to develop the world’s largest uranium deposit, Arrow, located in the Saskatchewan region of Canada.

Once up and running, this resource would be a “major, new, strategic Western source” of supply that can address the anticipated market deficit.

L1 said Arrow had the potential to generate more than C$2 billion of cash flow annually at the current uranium spot prices. This was “highly attractive” due to NexGen’s market capitalisation of C$5.8 billion.

In the company’s base case, at $50 per pound of the resource, the company suggests it could make C$1.04 billion of average annual after-tax net cash flow. Under this situation, the company was expected to make an after-tax internal rate of return of 52.4%.

Latest update

The NexGen share price is sometimes affected by the progress updates that the ASX uranium stock reveals.

On 9 November 2023, the company announced it had received ministerial environmental assessment approval under The Environmental Assessment Act of Saskatchewan to proceed with the development of the project.

During 2023, NexGen further advanced the front-end engineering and design for the Rook I Project / Arrow deposit while continuing to progress the project through the critical path detailed engineering procurement phases.

NexGen share price snapshot

The NexGen share price has more than doubled in the past 12 months.

The post This ASX uranium stock could potentially make $2 billion in annual profit appeared first on The Motley Fool Australia.

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More reading

• 4 ASX ETFs for smart investors
• There’s an ‘opportunity brewing’ with this ASX 200 share
• 3 ASX dividend shares to buy with ~5% yields for an income boost
• The most profound lesson from Lovisa’s results. What could it mean?
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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There are a great number of exchange-traded funds (ETFs) for investors to choose from, but which ones could be top buys in March?

Let’s take a look at four options for smart investors to look at this month:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ASX ETF to look at is the BetaShares Asia Technology Tigers ETF. It could be a top option if you’re feeling bullish on the long-term outlook of the Asian economy. That’s because this popular ETF provides investors with easy access to the biggest and best companies in the region. This includes Tencent and Alibaba.

BetaShares Global Cybersecurity ETF (ASX: HACK)

The BetaShares Global Cybersecurity ETF could be another ASX ETF to buy. It gives investors access to a global cybersecurity sector that is forecast to grow materially over the next decade due to the rising threat of cybercrime. Among the companies included in the fund are Accenture, Cisco, and Palo Alto Networks.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Another ASX ETF to look at is the BetaShares NASDAQ 100 ETF. It gives investors easy access to 100 of the largest non-financial shares on the famous NASDAQ index. These are the absolute titans of our age. This includes many of the world’s largest tech companies such as Apple, Microsoft, and Nvidia.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Finally, the Vanguard MSCI Index International Shares ETF could be a good option for investors that are looking to diversify a portfolio. That’s because this popular ASX ETF provides easy access to approximately 1,500 of the world’s largest listed companies (excluding Australia). Among its holdings are companies from a range of countries including the the US, Japan, the UK, France, Canada, and the Netherlands.

The post 4 ASX ETFs for smart investors appeared first on The Motley Fool Australia.

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• 2 fantastic ASX ETFs to buy for global investing in March
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• 3 excellent ASX ETFs to buy in March

Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Accenture Plc, Apple, BetaShares Global Cybersecurity ETF, BetaShares Nasdaq 100 ETF, Cisco Systems, Microsoft, Nvidia, and Palo Alto Networks. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alibaba Group and has recommended the following options: long January 2025 $290 calls on Accenture Plc, long January 2026 $395 calls on Microsoft, short January 2025 $310 calls on Accenture Plc, and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF and BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Apple, Betashares Capital – Asia Technology Tigers Etf, Nvidia, and Vanguard Msci Index International Shares ETF. 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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Broker Wilsons has named S&P/ASX 200 Index (ASX: XJO) share Breville Group Ltd (ASX: BRG) an opportunity as it goes through a cyclical recovery.

Breville was founded in 1932 in Sydney and now sells kitchen products in more than 70 countries around the world.

It owns a number of brands including Breville, Sage, Lelit, Baratza, ChefSteps and Beanz.com (a coffee subscription and delivery).

Why Wilsons added Breville shares to the portfolio

There are five factors that make Breville a “high-quality cyclical, according to Wilsons.

First is a high-quality management team, with CEO Jim Clayton driving a successful growth strategy.

Second is its resilience – it has managed to grow earnings over the last two years, despite the difficult economic conditions and distortions after COVID-19.

Third is its consistency of margins. The business has maintained its profit margins over this cycle, “demonstrating the levers Breville has at its disposal”.

Fourth is its balance sheet, Wilsons said the ASX 200 share is expected to be in a net cash position at the end of FY24, reducing the net interest expense and also providing “dry powder” for the next few years.

Wilsons suggests the balance sheet improvement is underappreciated, with effective inventory management and a subsequent reduction in net debt.

Finally, the broker said that Breville had a strong return on invested capital (ROIC) of 20%.

Why the ASX 200 share could grow earnings

Wilsons points to new product launches as a profit driver, with its sustained investment in research and development ensuring a healthy pipeline of “exciting new releases” catering to diverse geographic preferences, and expanding product categories, fuelling future growth.

The business has entered a number of new markets, establishing “a strong presence” in the United States, Europe and Asia Pacific. Since FY19, it has entered 17 new countries. Management has said it’s halfway through its expansion, with anticipated completion within eight to ten years. There is also the possibility of expanding in China and India.

The broker also suggested the profit margins can keep growing thanks to economies of scale through global expansion.

Wilsons says the Breville share price valuation is “reasonable” because earnings are expected to grow by approximately 13% per annum between FY24 and FY26.

The post There’s an ‘opportunity brewing’ with this ASX 200 share appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Monday
• Here’s how the ASX 200 market sectors stacked up this week
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• Why is this ASX 200 share rising at nearly quadruple the rate of its peers?
• Is this surging ASX 200 stock an under-the-radar buy?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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If you’re scouting for some new ASX dividend shares to buy, then it could be worth considering the three listed below.

Here’s why analysts think these high-yield shares are in the buy zone:

Rio Tinto Ltd (ASX: RIO)

The first ASX dividend share that could be a buy is Rio Tinto.

It is one of the largest miners in the world and the owner of a high-quality portfolio of operations across multiple commodities.

The team at Goldman Sachs is positive on the miner and recently put a buy rating and $138.30 price target on its shares.

As for dividends, the broker is expected fully franked dividends per share of US$4.39 (A$6.62) in FY 2024 and then US$4.61 (A$6.96) in FY 2025. Based on the latest Rio Tinto share price of $119.89, this will mean yields of approximately 5.5% and 5.8%, respectively.

Telstra Corporation Ltd (ASX: TLS)

Goldman Sachs also think that Telstra could be an ASX dividend share to buy right now.

It has a buy rating and $4.55 price target on Telstra’s shares.

In respect to income, the broker is forecasting fully franked dividends of 18 cents per share in FY 2024 and 19 cents per share in FY 2025. Based on the current Telstra share price of $3.83, this equates to yields of 4.7% and 5%, respectively.

Universal Store Holdings Ltd (ASX: UNI)

Another ASX dividend share that has been named as a buy is Universal Store.

It is the youth fashion retailer behind the Universal Store, Perfect Stranger, and Thrills brands.

Bell Potter is a fan and currently has an add rating and $5.65 price target on its shares.

As for income, the broker expects fully franked dividends per share of 24 cents in FY 2024 and then 31 cents in FY 2025. Based on the current Universal Store share price of $4.61, this will mean yields of 5.2% and 6.7%, respectively.

The post 3 ASX dividend shares to buy with ~5% yields for an income boost appeared first on The Motley Fool Australia.

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• Long-term investing: 3 top ASX stocks you can buy for under $20 a share
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• Why Camplify, Platinum, Rio Tinto, and Woodside shares are dropping today
• Why is the Rio Tinto share price tumbling into the red?

Motley Fool contributor James Mickleboro has positions in Universal Store. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Telstra Group. 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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In the past four months, the Lovisa Holdings Ltd (ASX: LOV) share price has soared by more than 60%. A majority of that gain was sparked by reporting season, with an impressive FY24 first-half result.

There were a number of pleasing metrics in the result, including net profit after tax (NPAT) growth of 12% to $54.5 million and 31% growth of the dividend per share to 50 cents.

For me, there was a particularly good theme that came through.

Scalability of the business

Lovisa has grown its store network considerably over the last several years, and the good store growth continued in the first half of FY24 – it added another 53 net new stores, with seven new stores in Australia, 12 new stores in France and 17 new stores in the USA.

The company isn’t just growing its store count for the sake of it. Lovisa’s products seem to have global appeal because it’s growing in numerous markets. It has recently entered a number of markets including Hong Kong, Taiwan, China, Vietnam, Namibia, Botswana, Spain, Italy, Hungary, Romania, Canada and Mexico.

It seems it’s nowhere near done growing.

This store growth is translating into sales. Lovisa’s revenue grew by 18.2% to $373 million in HY24.

The company reported some profitability metrics rose faster than revenue – it’s a great sign of scalability. Gross profit increased 18.9% to $301.1 million and earnings before interest, tax, depreciation and amortisation (EBITDA) grew 23.5% to $128.4 million.

Net profit after tax didn’t grow as strongly because of the adjustment of higher debt costs.

Pleasingly, the company advised that in the first seven weeks of the second half of FY24, comparable store sales were up 0.3%, while total sales were up 19.6%, with both of those growth measures stronger than the FY24 first half.

The comparable store sales growth shows the growing store network isn’t cannibalising sales.

Lovisa must invest some money upfront to enter a new country and open new stores, and then the revenue (and profit) flows in the subsequent months and year (or two). Lovisa could report good growth in the next 12 months, even if it stopped opening new stores today.

The business is delivering good operating leverage, as we can see with the growth of EBITDA faster than revenue.

With the store network’s huge potential growth in the coming years, very positive foundations are being built for solid profit increases over the rest of the 2030s, which can support Lovisa shares and dividends.

Lovisa share price valuation

The estimate on Commsec suggests Lovisa could generate earnings per share (EPS) of $1.167 in FY26 and potentially pay a (partially franked) dividend yield of 3.2%. That would put Lovisa shares at 27x FY26’s estimated earnings.

The post The most profound lesson from Lovisa’s results. What could it mean? appeared first on The Motley Fool Australia.

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• Why Coles, Liontown, Lovisa, and Wildcat shares are dropping today

Motley Fool contributor Tristan Harrison has positions in Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia has recommended Lovisa. 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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On Friday, the S&P/ASX 200 Index (ASX: XJO) ended the week at a record high close. The benchmark index rose 1.1% to 7,847 points.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to tumble

The Australian share market looks set to fall on Monday following a pullback on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 47 points or 0.6% lower. On Friday on Wall Street, the Dow Jones was down 0.2%, the S&P 500 fell 0.65%, and the Nasdaq dropped 1.15%.

Oil prices pullback

ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a poor start to the week after oil prices dropped on Friday night. According to Bloomberg, the WTI crude oil price was down 1.2% to US$78.01 a barrel and the Brent crude oil price was down 1.1% to US$82.08 a barrel. This follows the release of weak economic data out of China.

Telix shares named as a buy

The Telix Pharmaceuticals Ltd (ASX: TLX) share price could be good value according to analysts at Bell Potter. This morning, the broker has retained its buy rating on the radiopharmaceuticals company’s shares with an improved price target of $14.50. Bell Potter believes that its latest acquisition of ARTMS can drive margin expansion.

Gold price hits new high

ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a great start to the week after the gold price stormed to a new high on Friday. According to CNBC, the spot gold price was up 0.95% to US$2,185.5 an ounce. The release of strong US jobs data supported rate cut hopes.

Shares going ex-dividend

A number of ASX 200 shares are going ex-dividend this morning and could trade lower. This includes coal miner Coronado Global Resources Inc (ASX: CRN) biotech giant CSL Ltd (ASX: CSL), hospital operator Ramsay Health Care Ltd (ASX: RHC), and media company Seven Group Holdings Ltd (ASX: SVH).

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has positions in CSL, Telix Pharmaceuticals, and Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Telix Pharmaceuticals. The Motley Fool Australia has recommended CSL and Telix Pharmaceuticals. 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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If you are investing with a long-term horizon in mind, there are a whole bunch of shares that are going for cheaper than $20 to buy right now.

Let’s take a look at three examples of top ASX stocks going for cheap:

Heading in one direction: up

Life360 Inc (ASX: 360) is a Californian software maker that’s listed in the Australian share market.

The share price is around the high $11s at the moment, so meets our sub-$20 cheaper criteria.

Its smartphone app, which is one of the most popular in both the iPhone and Android app stores, is used by families to keep track of the locations of children and assist with emergencies.

Since the business decided a couple of years ago to reform from a profligate startup to a cash-generating machine, it hasn’t looked back.

The Life360 share price is up an astounding 370% since June 2022, and almost 60% just this year.

And I reckon this trajectory can continue in the years to come.

This top ASX stock proved me wrong

I am not too proud to admit that I wrote off Aussie Broadband Ltd (ASX: ABB) a year ago.

Since that article, the shares have rocketed 43% as it’s made some savvy corporate moves.

My concern back then was that taking market share off larger telcos with far deeper pockets could only get so far in a highly commoditised market like the NBN.

But in the past six months Aussie Broadband has shown a hunger to boost this organic growth with accretive acquisitions.

At the moment, it’s trying to buy fellow small NBN provider Superloop Ltd (ASX: SLC).

Each bolt-on like this enhances Aussie’s economies of scale, allowing it to take the fight to the likes of Telstra Group Ltd (ASX: TLS) and TPG Telecom Ltd (ASX: TPG).

The analysts at QVG Capital are bullish on Aussie Broadband, and loved what it had to say during last month’s reporting season.

“What was unexpected was the strength of the outlook,” they said in a memo to clients.

“Upgraded guidance, rapid customer growth and a positive margin outlook meant FY25 earnings expectations needed to be raised.”

Look past the immediate cost blowout

MA Financial Group Ltd (ASX: MAF) is not one that I’ve historically been interested in, but I have noticed recently that many fund managers are hot for it.

The share price took a 26% tumble last month after it reported its results, which is not encouraging.

But multiple analysts say the business is heading in the right direction.

“Pleasingly, net flows into the asset management business remained robust, and the Finsure business continues to take market share,” the Celeste Funds team said in a memo to clients.

“MA Money is forecast to break even in 2H24 while the Corporate Advisory & Equities business endured a difficult year but should rebound as capital markets reopen.”

The cost blowout seen in the latest report was the result of investment into their technology platform, the Celeste analysts added.

This could be a dark horse as a top ASX stock for the coming years. 

CMC Invest currently shows all three analysts covering MA Financial rating it as a strong buy.

The post Long-term investing: 3 top ASX stocks you can buy for under $20 a share appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• Top ASX passive income shares to buy in March 2024
• 3 key numbers for the Telstra share price that I think are being overlooked
• Here are the top 10 ASX 200 shares today
• 13 ASX 200 shares with ex-dividend dates next week

Motley Fool contributor Tony Yoo has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband and Life360. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Aussie Broadband and Ma Financial Group. 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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At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Pilbara Minerals Ltd (ASX: PLS) continues to be the most shorted ASX shares after its short interest increased week on week to 21.3%. Short sellers have been closing positions in the lithium industry but are not letting up on this miner.
• Syrah Resources Ltd (ASX: SYR) has short interest of 16.5%, which is down week on week again. Weak graphite prices have been weighing on this miner’s performance.
• IDP Education Ltd (ASX: IEL) has 10.6% of its shares held short, which is up week on week. Regulatory changes have been weighing on this language testing and student placement company’s shares.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest increase strongly to 9.8%. Short sellers have been loading up on the travel agent’s shares since the release of its half-year results.
• Deep Yellow Limited (ASX: DYL) has seen its short interest ease slightly to 9.7%. Short sellers don’t appear confident that uranium prices will be as strong as the market is predicting.
• Genesis Minerals Ltd (ASX: GMD) has seen its short interest rise to 9.5%. Short sellers are going after the gold miner despite the gold price hitting record highs last week. This may be due to concerns over integration risks from its recent acquisition spree.
• Australian Clinical Labs Ltd (ASX: ACL) has entered the top ten with short interest of 8.8%. A very poor performance so far in FY 2024 (80% profit decline) appears to have attracted short sellers.
• Core Lithium Ltd (ASX: CXO) has short interest of 8.3%, which is down sharply week on week. Short sellers have been lessening their exposure to the lithium industry following a rebound in Chinese prices.
• Liontown Resources Ltd (ASX: LTR) is back in the top ten with short interest of 8%. Short sellers may have concerns over the development of the Kathleen Valley Lithium Project.
• Weebit Nano Ltd (ASX: WBT) has short interest of 7.8%, which is down slightly week on week. Valuation and revenue generation concerns are likely to be behind this.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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• Down 19% this year! Is now the moment to buy Core Lithium stock?
• Supercharge your porfolio with these buy-rated ASX growth shares
• Why these 3 ASX 200 shares grabbed the Motley Fool’s headlines this record-breaking week
• 3 ASX 200 shares that could rise 20% to 50%
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Idp Education. The Motley Fool Australia has recommended Flight Centre Travel Group and Idp Education. 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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With the stock market so buoyant over the past few months, bargains are becoming harder to spot.

However, popular lithium stock Core Lithium Ltd (ASX: CXO) is now down more than 18.5% this year. If you go back 12 months, it’s been a painful 77% dive.

So is this a cheapie just staring at you in the face?

An endless winter for the lithium industry

It’s been a rough year-and-a-half for all stocks related to lithium.

The global prices for the commodity have dived more than 80% as Western consumers lock their wallets after brutal interest rate rises, and the Chinese do the same from shocks in their real estate industry.

So it’s no wonder a pure-play producer like Core Lithium has seen its valuation shrink 87% since November 2022.

In the long run, the experts agree that lithium will be in hot demand from all the batteries that need to be made for the electrification of fossil fuel engines.

So when the turnaround comes in the lithium market, it will 

But when the turnaround will come for the lithium industry is up for debate.

Only last week, a negative production update from electric car maker Tesla inc (NASDAQ: TSLA) sent Core Lithium shares spiralling down 14% in just 24 hours.

Core Lithium is a miner that’s not mining

The other headwind for Core Lithium is that it was forced to stop mining.

Perhaps its larger rivals have the economies of scale to keep going, but in January, the financial equation became unviable for Core to produce.

This is absolutely the right decision to make so that the business is not bleeding cash. But it does give Core Lithium a bleak outlook.

Those who invest for a living are avoiding the miner like the plague.

According to CMC Invest, none of the eight analysts covering Core Lithium are rating it as a buy. Six are recommending investors to sell.

So the answer to the question is that now is probably not the time to buy Core Lithium shares. 

Either something in the business or the lithium market will have to change for investors to gain more confidence in its future.

The post Down 19% this year! Is now the moment to buy Core Lithium stock? appeared first on The Motley Fool Australia.

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More reading

• Could the big short of ASX lithium stocks be nearing its end?
• Why is the Core Lithium share price down 14% in two days?
• Why are ASX lithium shares like Pilbara Minerals crashing on Tuesday?
• Why the 2024 outlook for these rebounding ASX 200 lithium shares looks ‘better than market expectations’
• Guess which 4 shares are being dumped from the ASX 200 index

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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With the ongoing cost of living crisis, it can be hard to scrape together excess cash to invest in the stock market. After all, buying ASX shares can seem indulgent when there are bills to pay, mouths to feed and a roof to maintain.

But if you’ve got a spare $500 this March, putting it into the share market is a great move in my view. As with many things, the first step with investing is often the hardest. I can guarantee that the second $500 you invest in ASX shares is a lot easier to part with than the first. The third, easier still.

But the big decision remains: which ASX share does one spend their first $500 on? And it is probably going to be just one share, as $500 is the minimum parcel value one can directly buy on the ASX.

Here’s what I’d do – speaking as someone who once struggled with this choice.

How to spend your first $500 on ASX shares this March

I would invest in a broad-market index fund or a diversified listed investment company (LIC).

One of the biggest risk factors for your first investment is picking a speculative stock in the hope that it will rocket in value. Speculative investing is a practice that is best left to professional investors. For someone starting out, boring is better.

I would also shy away from buying an individual company at all with your first $500. Even seemingly blue-chip shares can present more risk for a first-time investor than an investment that covers the whole market.

So instead, I would recommend an investment along the lines of the Vanguard Australian Shares Index ETF (ASX: VAS), the iShares Core S&P/ASX 200 ETF (ASX: IOZ), the Australian Foundation Investment Co Ltd (ASX: AFI) or Argo Investments Ltd (ASX: ARG).

The first two investments are both exchange-traded funds (ETFs) and index funds. This means that they hold every ASX share within an index. In VAS’ case, this is the S&P/ASX 300 Index (ASX: XKO), and in IOZ’s, the S&P/ASX 200 Index (ASX: XJO). These indexes track the largest 300 and 200 shares on the market respectively.

That means each fund holds everything from Commonwealth Bank of Australia (ASX: CBA), Woolworths Group Ltd (ASX: WOW) and Telstra Group Ltd (ASX: TLS) to JB Hi-Fi Ltd (ASX: JBH), Harvey Norman Holdings Limited (ASX: HVN) and Xero Ltd (ASX: XRO).

What are the benefits of these investments for a first-time investor?

In this way, your $500 investment is spread out over hundreds of companies, rather than just being in one specific business. This enhances your diversification while removing the risk of your investment going to zero almost completely.

The listed investment companies AFIC and Argo function very similarly. They don’t blindly track what these indexes are doing and have active managers looking after your money instead. But they still spread out your investment over a huge portfolio of diverse ASX shares.

I think a $500 investment in any one of these four options is a prudent way to dip your toes into the world of investing this March. They are simple investments that all have long track records of delivering meaningful returns to their stakeholders. In hindsight, I certainly wish my first purchase of ASX shares had been one of these.

The post With a spare $500, here’s how I’d start buying ASX shares this March appeared first on The Motley Fool Australia.

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More reading

• 5 ASX shares to buy for an effortless path to financial freedom
• Buy these ASX ETFs for easy passive income
• 3 reasons to buy another ASX ETF over the Vanguard Australian Shares Index ETF (VAS)
• 3 excellent ASX ETFs to buy in March
• 14% in 4 months: How has the Vanguard Australian Shares ETF (VAS) managed it?

Motley Fool contributor Sebastian Bowen has positions in Telstra Group and Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Harvey Norman, Telstra Group, and Xero. The Motley Fool Australia has recommended Jb Hi-Fi. 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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