Do you have $10,000 to invest? I’d pick the ASX shares I’m going to reveal in this article.

Choosing where to put your hard-earned money can be a difficult task. Particularly with how volatile the share market has been in recent months due to COVID-19.

Here are my picks:

Share 1: PM Capital Global Opportunities Fund Ltd (ASX: PGF) – $2,500

This ASX share is a listed investment company (LIC) which focuses on overseas shares. I think there’s merit in finding LICs which are trading at large discounts to their net tangible assets (NTA) per share but have a relatively large dividend yield.

I think PM Capital Global Opportunities Fund is good value because it’s probably trading at around a 20% discount to the NTA at the end of last week. The weekly NTA update will be released tomorrow. This is a large discount in the LIC sector. 

Some of the LIC’s current holdings are: Cairn Homes, Bank of America, Visa, MGM China, KKR & Co, Siemens and Freeport-McMoRan Copper.

The ASX share has been steadily increasing the dividend over the past few years. Since 2017 the annual dividend has grown annually by 0.2 cents per share. In FY20 the annual dividend seems set to increase to 4 cents per share, up from 3.8 cents per share in FY19. At the current PM Capital Global Opportunities Fund share price it has a projected FY20 grossed-up dividend yield of 6.2%.

Share 2: Bubs Australia Ltd (ASX: BUB) – $3,500

Bubs is one of my main ASX growth share ideas at the moment. The goat milk product business is seeing large demand for its infant formula range.

The business has been growing quarterly revenue at a very good rate for a while now. But the quarter to 31 March 2020 was truly impressive. Bubs’ quarterly revenue of $19.7 million was a 67% increase year on year and a 36% increase compared to the previous quarter. Bubs’ infant formula revenue jumped 137% and Chinese revenue rose by 104%.

I really like what Bubs has achieved over the past couple of years, particularly with securing its supply chain and expanding its distribution footprint.

Good news continues to flow from the ASX share. It recently announced its (cow-based) grass fed infant formula will be sold in 482 Coles Group Limited (ASX: COL) supermarkets. In that same announcement it said that Baby Bunting Group Limited (ASX: BBN) would start selling Bubs’ range of products in 52 stores from May 2020.

I think Bubs is definitely one to watch over the next five years. I’d be happy to buy shares at the current Bubs share price.

Share 3: WCM Global Growth Ltd (ASX: WQG) – $4,000

Many of the best shares in the world are not listed on the ASX. Indeed, the ASX only makes up 2% of the global share market. I think it could be a mistake to miss out on the other 98% of the world.

ASX share WCM Global Growth is another LIC which also targets global shares. It looks for shares with an expanding economic moat, measured by a rising return on invested capital (ROIC). Businesses with a large but static (or declining) moat won’t make the cut.

WCM, a Californian based asset management firm, also looks for a good corporate culture that will enable that share’s economic moat to keep growing.

The ASX share’s investment portfolio has been a strong performer. Over the past two years, after management fees and performance fees, WCM’s portfolio has returned an average of 23.1% per annum, outperforming its global benchmark by 13.5% per annum.

Some of its top holdings at the end of May 2020 include Shopify, Stryker Corp, MercadoLibre, Visa and Crown Castle International.

A useful bonus is that the ASX share recently started paying a dividend. At the current WCM Global Growth share price it offers a dividend yield of 3.1%. It’s currently trading at a 10% discount to the NTA at 26 June 2020.

Foolish takeaway

I think all three of these ASX shares could outperform the local market over the short-term and particularly the long-term. I believe Bubs has great growth potential. The two global LICs are invested in good shares and are valued at attractive discounts to their NTAs.

More reading

• My ASX share of the week
• 3 of the best ASX growth shares to buy for the 2020s
• 3 exciting ASX growth shares to buy with $3,000 today
• These are 2 quality ASX shares to buy with $2,000
• Why I’d buy and hold a2 Milk shares until 2025

Motley Fool contributor Tristan Harrison owns shares of PM Capital Global Opportunities Fund Ltd. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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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The Afterpay Ltd (ASX: APT) share price has been garnering a lot of attention lately. It could be because this share climbed to yet another new record high last week of $70. It could be because this company’s share price has appreciated more than 700% since its March lows. Or it just could be that Afterpay, with its ‘new way to pay’, is a natural to the spotlight.

But now Afterpay has conquered a $70 price tag, an ~$18 billion market capitalisation and (as it looks likely) membership of the ASX 20 club, some investors are wondering ‘where to from here?’ Or perhaps more opportunistically, ‘how high can Afterpay shares climb?’

As Afterpay is a relatively new company with a relatively new product idea in buy now, pay later (BNPL), it is the sort of company that can be difficult to value and chart a growth trajectory for. But I want to start at the finish line by looking at the largest payments company in the world: Visa Inc. (NYSE: V).

You probably know Visa from its almost universal presence on the credit and debit cards that most people have in their wallet or on their phone.

But don’t let Visa’s tiny logo on your card fool you. This is a gargantuan company with a truly global reach. It’s currently valued at US$416.5 billion (A$598 billion), which is more than 4½ times the size of Commonwealth Bank of Australia (ASX: CBA). Visa makes money by clipping the ticket of every transaction that goes through its payment network. Think about how many people are tapping their Visa cards every day in Australia alone, take it to the world stage, and you get some idea of this company’s dominance.

Is Afterpay the new Visa?

So is this Afterpay’s endgame? To rival Visa, Mastercard and American Express in terms of global presence and market dominance? I’m sure Afterpay would like to think so. But is the runway there for this company?

Well, it’s hard to say. If Afterpay can get to the point where every shop in the world asks you ‘how would you like to pay, cash, card or Afterpay?’, then it will have made it. But how far off is this?

In Australia, not far in my view. Yes, it does have to contend locally with rivals like Zip Co Ltd (ASX: Z1P) and Openpay Group Ltd (ASX: OPY). But I think retailers in this country are at a point where they almost have to offer customers an option to ‘Afterpay it’. And signs are looking good for the US and UK markets too. In fact, Afterpay recently announced that it now has more than a million UK-based active users. And that’s after just a year in the market. Things are even better in the US, where Afterpay is enjoying widespread enthusiasm and more than 5 million active customers.

Foolish takeaway

I still think there is at least a little froth in the current Afterpay share price, and I don’t think things are as rosy as the market is assuming for this company. Remember, Afterpay has yet to turn a profit. But if the company continues to grow on its current trajectory, paying $18 billion for the ‘next Visa’ would seem pretty cheap.

I’m not investing in Afterpay at these levels, but in not doing so, I acknowledge that I might be on the wrong side of history here.

More reading

• ASX 200 falls 0.7%, Qantas and Afterpay make a partnership
• 2 ASX shares I would buy for growth and income
• Afterpay share price pushes higher on Qantas partnership
• ASX 200 edges higher: Afterpay and Qantas join forces, big four banks push higher
• These were the 5 best performing ASX shares last week

Sebastian Bowen owns shares of American Express, Mastercard, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Mastercard and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Mastercard. 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 Are Afterpay shares the next Visa? appeared first on Motley Fool Australia.

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If you are looking to expand your ASX share portfolio, I believe the following 2 ASX shares are worthy of consideration. Both operate in the Australian retail market, however both have very different business models. While JB Hi-Fi Limited (ASX: JBH) has a business model largely centred on its brick-and-mortar stores, Kogan.com Ltd (ASX: KGN) is a pure online retailer.

Both shares have been big performers recently and are well placed to grow strongly over the next 5 years, in my view.

JB Hi-Fi

Market-leading electronics retailer JB Hi-Fi has continued to perform strongly, despite the challenges of the coronavirus crisis.

The retailer reported strong revenue growth during 2H20 so far in both its JB Hi-Fi Australia and The Good Guys store chains. In particular, the demand for technology products for remote working, learning and communication have been strong throughout the coronavirus crisis. Its New Zealand stores were impacted by COVID-19 closures. However, New Zealand sales only accounted for $0.22 billion of a total of $7.86 billion of sales during this period.

The company estimates its total net profit after tax for FY2020 is expected to be in the range of $300 million to $305 million. That’s a very impressive increase of 20% to 22% on the prior corresponding period, if it can be achieved.

Despite a strong rally in its share price since late March, I believe that this ASX share is well placed to perform strongly over the next decade. The company is highly skilled at what it does and has excellent product selection. Over the years, JB Hi-Fi has diversified into tech accessories, mobile phones, computers, as well as goods such as fridges and washing machines. JB Hi-Fi also continues to grow its online offering to complement its brick-and-mortar channel.

Kogan

Online retailer Kogan has been one of the star performers on the S&P/ASX 200 Index (ASX: XJO) in recent months. Its share price has risen from $3.92 in mid-March to now be trading at $15.55.

Specialist online retailers such as Kogan have seen a surge in sales due to COVID-19 lockdown restrictions. In a market update in early June, Kogan revealed that for April and May its gross sales climbed by more than 100% on the prior corresponding period.

I think this ASX share is well placed to tap into the growing adoption of online shopping over the next decade. This will be driven by the increasing popularity of its Kogan-branded products. In particular, its fast-growing Kogan Marketplace has been a star performer over the past 12 months.

Additionally, the company has expanded into a broad range of verticals, including internet, mobile, energy and credit cards. This has diversified its business model and broadened its future growth opportunities.

More reading

• 2 ASX shares I would buy for growth and income
• 2 five-star ASX shares for strong long-term growth
• The most popular US shares that Aussies are buying includes a few surprising names
• Are ASX 200 retail shares like JB Hi-Fi overvalued?
• Is the Ramsay Health Care share price a buy?

Phil Harpur owns shares of Kogan.com ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com 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 Kogan and 1 other ASX share to buy and hold beyond 2025 appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) dropped by 0.7% today to 6,015 points today.

The big news of the day was that the border between Victoria and New South Wales will be shut by midnight tomorrow. Melbourne residents will be cut off first and then the whole Victorian state by 11:59pm on Tuesday, though Victorians will be free to return to Victoria. There were another 127 new cases reported today, including 16 from the locked down public housing towers. Permits will be allowed for people in border towns.

Afterpay Ltd (ASX: APT) and Qantas Airways Limited (ASX: QAN) form a partnership

Australia’s biggest buy now, pay later provider and the country’s biggest airline have formed a partnership.

The new partnership will allow Qantas frequent flyers to earn Qantas points on Afterpay’s buy now, pay later platform. The partnership between the two ASX shares will launch later this week.

Qantas frequent flyers can earn up to 5,000 Qantas points when they link their membership number to their Afterpay account.

Qantas loyalty CEO Olivia Wirth said earning points with Afterpay would be a huge advantage to the program’s large portion of frequent buyers, who maximise their points earned on everyday spending.

Ms Wirth said: “Financial services is one of the most popular ways to earn points in the program, it’s the quickest and easiest way to build your points balance. With our 13 million members all having different spending habits and financial preferences, it’s great to be able to offer more options and more rewards.”

Anthony Eisen, CEO and co-founder of ASX 200 business Afterpay said partnering with one of Australia’s largest and most recognised loyalty programs would provide significant upside for Afterpay customers.

Mr Eisen said: “We are always looking for ways to add value for our customers and this partnership between two iconic Australian brands is a great way to reward them for shopping with Afterpay. Now our customers can earn Qantas points on their purchases at no additional cost, just by using Afterpay as they normally would.”

Event Hospitality and Entertainment Ltd (ASX: EVT) refinances its debt

The company announced today that it has been successful in refinancing its debt. Its debt facilities have been increased by $205 million to $750 million, resulting in available cash and undrawn debt of approximately $320 million.

The majority of cinemas in Australia and New Zealand are now open. There is going to be a restricted opening of the Thredbo winter season from 22 June 2020. The majority of hotels have remained open throughout the COVID-19 shutdown with a number of initiatives implemented to mitigate the impact of the coronavirus.

The ASX share is in the process of divesting sites to allow for the completion of the sale of CineStar. It has also implemented a number of actions to substantially reduce operating costs at a corporate level.

The Event share price dropped 2% today.

WAM Leaders Ltd (ASX: WLE) grows its dividend

WAM Leaders has given some insight into its FY20 result today. The company focuses on shares within the ASX 200.

WAM Leaders’ board has declared a fully franked final dividend of 3.25 cents per share, bringing the FY20 full year dividend to 6.5 cents per share. The FY20 annual dividend is 15% bigger than the FY19 total.

The listed investment company (LIC) stated that its investment portfolio had significantly outperformed during FY20. In the 12 months to 30 June 2020 the investment portfolio outperformed the S&P/ASX Accumulation Index by 10.4% with a positive return of 2.7%. The benchmark fell 7.7%.

Biggest movers of the day

At the positive end of the ASX 200 the Mesoblast Limited (ASX: MSB) share price rose by 11.3% and the oOh!Media Ltd (ASX: OML) share price went up 9.3%.

At the red end of the ASX the Adbri Ltd (ASX: ABC) share price dropped another 6.8% and the Bega Cheese Ltd (ASX: BGA) share price fell 6.4%.

More reading

• Are Afterpay shares the next Visa?
• 2 ASX shares I would buy for growth and income
• The most popular US shares that Aussies are buying includes a few surprising names
• ASX dividend share WAM Leaders announces a great FY20 dividend
• Why the Mesoblast share price is leading the ASX 200 on Monday

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended oOh!Media 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.

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If you are asked ‘do you invest in ASX shares?’, and you answer yes, the next question usually goes something along these lines: ‘are you a growth, value or dividend investor?’

Yes, we share market enthusiasts tend to pigeonhole every investor’s personal strategy into one camp or another, even though most strategies are unique in their own way.

So it’s in this light that I want to talk about 2 ASX shares that I think could fit neatly into a growth investor‘s portfolio, but just as happily in an income-focused strategy. In my eyes, if ticking one box is good, then ticking both must be better!

Why I would buy Altium Limited (ASX: ALU) shares for growth and income

Altium has a reputation as one of the hottest growth shares on the ASX. This printed circuit board software designer is one of the A’s in the WAAAX club and has a future-facing product offering and business model. And Altium has the growth numbers to back it up, too. It is on track for its 50,000 customer target and has been growing revenue and earnings at a double-digit clip over the past few years.

But what many investors don’t realise about Altium is its track record of dividend growth. Altium shares already offer a starting yield of 1.1% today. But this company has been growing its dividend at breakneck speed over the past 5 years. Back in 2015, Altium paid out 16 cents per share in dividends. Over the past 12 months, the company has returned 38 cents per share in dividends. Put simply, I like where this is going and I think Altium has plenty of both capital and income growth left in its tank.

Why I would add Vanguard Australian Shares Index ETF (ASX: VAS)

A vanilla, plain-Jane index fund like VAS is often underestimated by growth and income investors alike. But I think the ASX 300 (which VAS tracks) offers both. Getting exposure to the top 300 public companies in Australia means buying everything from CSL Limited (ASX: CSL) and Commonwealth Bank of Australia (ASX: CBA) to Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P). In other words, it’s a mix of growth and income shares.

Because the ASX 20 has the most weighting in the index, this ETF does have a tilt towards income over growth – exemplified by VAS’s trailing dividend yield of 4.23%. But I like this index because it throws in another 100 small-cap, growth companies on top of the S&P/ASX 200 Index (ASX: XJO). Some small companies grow into large companies – growth that an index fund like VAS can capture well. As such, I think any ASX investor would be well-served by having this fund as a foundation of a portfolio.

More reading

• Are Afterpay shares the next Visa?
• Kogan and 1 other ASX share to buy and hold beyond 2025
• ASX 200 falls 0.7%, Qantas and Afterpay make a partnership
• 2 five-star ASX shares for strong long-term growth
• The most popular US shares that Aussies are buying includes a few surprising names

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium, CSL Ltd., and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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Whether this is your first time investing in ASX shares, or you are looking to top up your current ASX share portfolio, I believe the following 2 ASX shares are worthy of consideration.

These 2 options are very different types of investments, however, I think both are well positioned for strong returns over the next decade.

Telstra Corporation Ltd (ASX: TLS)

As Australia’s largest telecommunications provider, Telstra has played a crucial role in the country’s telecommunications landscape for many decades.

Telstra previously had a very dominant market position as it owned the national fixed line network for broadband and voice. It was therefore was able to control the price it charged to other telcos that purchased wholesale services from its network. This provided Telstra with high margins and high company profits. However, in the new era of the National Broadband Network, Telstra is now on a level playing field with competitors such as Optus, TPG Telecom Ltd (ASX: TPM) and Vocus Group Ltd (ASX: VOC).

Despite this, I still believe that Telstra is well positioned for long-term growth and strong shareholder returns. It currently has a market leadership position in the rollout of 5G mobile services in Australia. In fact, it has been a world leader in 5G trials over the past few years. In addition, under Telstra’s T22 strategy, the telco is now evolving into a much leaner and efficient telecommunications provider. This is positioning it well for strong growth over the next decade.

Vanguard MSCI Index International Shares ETF (ASX: VGS).

This recommendation isn’t an individual company, but rather is an exchange traded fund (ETF).

ETFs hold a collection of different companies under one investment umbrella, similar to traditional managed share funds. However, the difference between an ETF and a traditional managed fund is ETFs are traded on a stock exchange. This makes them much easier for investors to access, and they typically have much lower expenses.

Vanguard MSCI Index International Shares ETF (ASX: VGS) tracks the return of the MSCI World ex-Australia Index, which includes over 1,500 of the world’s largest companies in major developed countries. The top 5 current listings are all tech giants including Apple Inc, Microsoft and Amazon and Facebook. All of these companies have seen strong growth over the past 3 years.

The ASX is heavily weighted to industry segments such as banking and financial services, industrials and retail. These industries are very mature and in my view they don’t have the same long growth potential as industries such as technology. Vanguard MSCI Index International Shares ETF is weighted towards the technology sector, which in my opinion means it is well placed to outperform the S&P/ASX 200 Index (ASX: XJO) over the long term.

More reading

• Kogan and 1 other ASX share to buy and hold beyond 2025
• 2 ASX shares I would buy for growth and income
• The most popular US shares that Aussies are buying includes a few surprising names
• Is the Ramsay Health Care share price a buy?
• Why the Mesoblast share price is leading the ASX 200 on Monday

Motley Fool contributor Phil Harpur owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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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At the weekend I wrote about how successful $20,000 investments in a number of popular ASX shares had been over the last 10 years. You can read about those investments here.

But that was then, what about the next decade?

Listed below are three ASX shares that I believe could provide market-beating returns for investors throughout the 2020s. Here’s why I would invest $20,000 into them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

I think investors ought to consider putting $20,000 into the BetaShares Asia Technology Tigers ETF. This exchange trade fund gives investors exposure to some of the most exciting technology companies in the Asian market. These include search engine company Baidu, ecommerce stars Alibaba and JD.com, electronics giant Samsung, and WeChat owner Tencent Holdings. These companies are revolutionising the lives of billions of people in the region and look particularly well-placed for growth in the future. In light of this, I believe there’s a strong probability the BetaShares Asia Technology Tigers ETF will outperform the ASX 200 by a decent margin throughout the 2020s.

Cochlear Limited (ASX: COH)

I think Cochlear shares would also be a great place to invest $20,000. It is a global developer, manufacturer, and distributor of cochlear implantable devices for the hearing impaired. I think Cochlear would be a great long term option due to the ageing populations tailwind. This is because as people age, their hearing will more often than not fade and require some form of assistance. So, with the World Health Organization estimating that there will be almost three times more people over the age of 65 by 2050 than there were in 2010, demand for Cochlear’s industry-leading cochlear implantable devices looks likely to grow strongly over the next few decades.

SEEK Limited (ASX: SEK)

A final ASX share to consider investing $20,000 into is this job listings company. I believe the SEEK share price could generate very strong returns for investors over the 2020s. This is thanks to the strength of its core ANZ business, its investment in growth opportunities, and its fast-growing Chinese operations. Combined, I expect them to drive strong earnings growth over the period. And while FY 2020 will be a disappointing year because of the pandemic, I believe it is worth dealing with the short term pain for the potential long term gains.

More reading

• Cochlear and these ASX 200 shares could be fantastic buy and hold investments
• ASX 200 closes 0.4% higher, Cochlear share price up 6%
• Fund managers have been buying these ASX 200 shares
• ASX 200 up 0.55%: Cochlear jumps on FDA approval, Adbri crushed on contract loss
• Cochlear share price charges higher on US FDA update

James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended Cochlear Ltd. and SEEK 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 Where to invest $20,000 into ASX shares for market-beating returns appeared first on Motley Fool Australia.

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From time to time, I like to draw from the wisdom of the great Warren Buffett in order to start my week off right. Warren Buffett — chair and CEO of Berkshire Hathaway Inc. (NYSE: BRK.A)(NYSE: BRK.B) — is often regarded as one of, if not the, best investors of all time. Even though he turns 90 years old this year, Buffett is still a font of wisdom and good investing practice. And we are lucky enough that he is more than happy to pass on his knowledge to all aspiring investors who want to learn from him.

Luckily, our Fool colleagues over in the United States have compiled a comprehensive list of Buffett’s best quotes. So here are 3 that I think are relevant as we start a new week.

“The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.”

I love this quote as it perfectly encapsulates one of the greatest follies growth investors often make. People often mistake a company’s ‘first mover’ status in a new growth area as permanent dominance. If this were so, then it would be Nokia and Blackberry that would control the smartphone market today, rather than Apple, Alphabet and Samsung. So don’t mistake a company’s initial innovation for a sign of permanent success.

Of course, sometimes the first mover manages to retain their edge — just look at how Afterpay Ltd (ASX: APT) shares have performed in recent weeks. But equally common is a company that sparks a trend being unable to follow this through. For every Afterpay, there are 3 Kodaks and BlackBerrys. As such, I think all growth investors should pay attention to this one.

“Buy a stock the way you would buy a house. Understand and like it such that you’d be content to own it in the absence of any market.”

This is a doozy. Buffett here perfectly nails why buying a share because ‘you hope it goes up’ isn’t the right way to go about things. We have seen growing signs in this market today that many investors (especially newer share market converts) are playing a ‘chase the winner’ strategy.

Shares like Afterpay, Zip Co Ltd (ASX: Z1P) and Openpay Group Ltd (ASX: OPY) have delivered triple-digit gains to investors over just the past 3 or so months. This (in my view) has the same mental effect of winning a high-stakes game of roulette for newer investors – after one win, you just want more. These investors may be better of just following Buffett’s advice here and buy for the long-term.

“The best chance to deploy capital is when things are going down.”

This one may sound obvious, but too many investors don’t follow it at all. Too often, a market panic or crash (like we saw in March) scares investors into pulling out their shares from the market when it’s too late — cementing ugly losses of capital.

The best time to sell shares is usually just before a crash when the market tends to get a little carried away. Making sure you have a small-but-potent cash pile ready to go if things turn south is a prudent way to have a ‘foot in both camps’ in my view.

More reading

• Has Warren Buffett lost his magic?
• 3 Warren Buffett quotes to start your week off right
• How to be like Warren Buffett and not lose money investing in ASX 200 shares

Sebastian Bowen 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 Berkshire Hathaway (B shares) and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short September 2020 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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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Whether or not the Reserve Bank will cut rates to zero on Tuesday is difficult to say. But one thing I feel is almost certain, is that interest rates will not be going higher for some time to come.

In light of this, I think ASX dividend shares will continue to be the best place to invest your money for income.

With that in mind, here are two ASX dividend shares that I would buy today:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

The ANZ share price has been out of form in 2020 and is currently trading over 33% lower than its 52-week high. While a decline is not completely unwarranted, I feel the extent of its decline has been overdone. This has left ANZ’s shares trading at around 13x estimated FY 2021 earnings and 0.9x FY 2021 book value. Which I feel is a very attractive level to buy in at.

This is especially the case for income investors, given my expectation that the bank will pay a partially franked dividend of $1.05 per share in FY 2021. If this forecast proves accurate, it will mean that ANZ’s shares provide investors with a very generous 5.5% yield next year.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

If you don’t have enough funds to invest across an adequately diverse group of shares, then the Vanguard Australian Shares High Yield ETF could be worth considering. This is because this exchange traded fund gives investors exposure to a group of high yielding ASX dividend shares through a single investment.

These includes the likes of ANZ and the rest of the big four banks, Telstra Corporation Ltd (ASX: TLS), and mining giants such as BHP Group Ltd (ASX: BHP). At present I estimate that its units provide a FY 2021 dividend yield in the region of 4.3%.

More reading

• ASX 200 Weekly Wrap: Afterpay, Tech push ASX 200 back above 6,000
• Is the ANZ, APA or CSL share price a strong buy?
• Looking to start a share portfolio? Here are 3 quality ASX shares to begin with
• ASX bank shares have experienced a horrible financial year
• 2 biggest areas of risk for ASX bank stocks that are being overlooked

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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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