One positive outcome I have seen out of the market turmoil on the S&P/ASX 200 Index (ASX: XJO) in 2020 so far has been the renewed interest in the share market from some first-time investors keen to take the plunge.

Investing is a hard game to master, but one that is equally rewarding if you have the patience and develop the right temperament. Whilst you are sharpening your game, I always think it’s best to go for investments that aren’t just one single company at first.

So with that in mind, here are two ASX shares I think would make a great choice for a first-time investor.

iShares Global Consumer Staples ETF (ASX: IXI)

This exchange-traded fund (ETF) works by holding a basket of underlying shares within one investing vehicle. In this way, you can reduce your risk by spreading your capital across many different companies. IXI holds only companies that are in the ‘consumer staples’ space. Consumer staples are the goods and services defined as ‘needs’ rather than ‘wants’. Think food, drinks and household essentials.

As such, the companies that make them are usually regarded as ‘safe’ investments as demand for their products is unlikely to ever go away. IXI’s top holdings include names like Nestle, Coca-Cola, Clorox and Unilever. As you can see, these companies hail from all over the world and not just Australia. This makes this ETF a great stock to hold for diversification in my view, and I think it would form a great foundation for the starter portfolio of a first-time investor.

Magellan Global Trust (ASX: MGG)

Magellan Global Trust is a listed investment trust (LIT), which works in a similar fashion to an ETF in that it holds a basket of shares rather than just one company. However, the main difference is that Magellan Global Trust has an active management team which aims to select a group of diverse companies which it believes are the best in the world.

Currently, these include Starbucks, Tencent, Alphabet (Google), Mastercard, Pepsico and Microsoft.

Magellan Global has a strong history of using this philosophy to generate market-beating returns for its investors. Since 2017, it has managed 12% per annum on average, which isn’t bad considering the massive crash in global share markets we have seen in 2020.

Again, the calibre, as well as the diverse range and global reach of these companies, makes Magellan Global Trust a great first share to build up from, in my view.

More reading

• ASX 200 finishes up 1.4%, gold miner share prices surge
• The next ASX sector in a post COVID-19 earnings upgrade cycle
• These 4 ASX shares are at 52-week highs. Time to invest?
• Brokers name 3 ASX 200 shares to buy today
• Why the best performing ASX stock might have more room to run higher

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), Starbucks, Coca-Cola, Mastercard, and PepsiCo. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares) and Mastercard. The Motley Fool Australia owns shares of iShares Global Consumer Staples ETF. The Motley Fool Australia has recommended Alphabet (A shares) and 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.

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The S&P/ASX 200 Index (ASX: XJO) ended the day 1.4% higher to 5,405 points as the share prices of gold miners surged.

China continues to ramp up the pressure on Australia with different commodities according to media reporting.

Here are some of the biggest ASX 200 headlines from the day.

Gold miners jump

As volatility starts ramp up again investors are looking for safe havens like ASX 200 gold miners. The biggest gainers were:

The Silver Lake Resources Limited. (ASX: SLR) share price grew almost 9%.

Gold Road Resources Ltd (ASX: GOR) saw its share price rise over 7%.

Saracen Mineral Holdings Limited (ASX: SAR) experienced a 7% share price rise.

The Resolute Mining Limited (ASX: RSG) share price went up 6.9%.

Boral Limited (ASX: BLD) 

The ASX 200 construction business today announced that it has increased and extended its debt financing facilities with a new US private placement note issue of US$200 million, approvals for new two-year bank loan facilities of $365 million and approvals to extend $665 million of the existing $750 million.

Boral’s operations are still permitted and encouraged to continue, though there have been limitations in some locations. The company reported that revenue and volumes were down with lower profit margins.

The Boral share price finished 2.3% lower, it was one of the worst performers within the ASX 200 today.

Investors send the Xero Limited (ASX: XRO) share price down further

After a sizeable drop yesterday in reaction to the ASX 200 cloud accounting software company’s FY20 report, the Xero share price fell another 5.6% today.

Xero reported that free cash flow increased by 320% to NZ$27.1 million. Net profit after tax (NPAT) came in at $3.3 million, an improvement from the NZ$27.1 million loss in FY19. As free cash flow grows it should mean investors are more willing to pay for a higher Xero share price over time.

Whilst Xero reported solid growth numbers in FY20, the early trading in FY21 has showed that Xero is being affected too. The uncertainty is why Xero was unable to provide much guidance for FY21.

Returns as of 6/5/2020

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Xero. 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.

More reading

• 2 ASX shares for a first-time investor
• The next ASX sector in a post COVID-19 earnings upgrade cycle
• These 4 ASX shares are at 52-week highs. Time to invest?
• Brokers name 3 ASX 200 shares to buy today
• Why Boral, Corporate Travel Management, United Malt, & Xero are dropping lower

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China has been a huge avenue for growth for many ASX shares over the past decade or two. The country’s burgeoning middle-class has been fertile ground for many ASX companies to expand into, selling ‘Brand Australia’ products that have proved highly popular for millions of Chinese customers.

But with geopolitical tensions on the rise in recent weeks, could this avenue be shut off?

According to reporting in the Australian Financial Review (AFR), China is turning the screws on Australian foreign policy, angered by moves from the Morrison government to support an independent international inquiry into the origins of the outbreak of the coronavirus pandemic.

As reported by the AFR, China has sounded out replacing Australian barley and beef exports with those from the USA and Russia in retaliation.

So what if these tensions escalate? There’s a lot of very successful Australian exporters that would euphemistically be put in a right pickle.

Some ASX shares that might be in the firing line

Take Treasury Wine Estates Ltd (ASX: TWE). Treasury has put a lot of time and effort into building a market for its quality Aussie wines in China. Its high-quality and high-margin brands like Penfolds have proven a hit for the Chinese middle-class – so much so that Treasury generated around 40% of its earnings in Asia during FY19.

Australian dairy has also proved very popular in China. The A2 Milk Company Ltd (ASX: A2M) and Bubs Australia Ltd (ASX: BUB) have been exploiting this to ruthless effect, particularly in the infant formula market. This partly explains why the a2 Milk share price has ballooned by 3,700% over the past 5 years and Bubs by over 1,400%. We could see this unwind if China really wants to play hardball with the Australian government.

There’s also the iron ore exporters Fortescue Metals Group Limited (ASX: FMG), Rio Tinto Limited (ASX: RIO) and BHP Group Ltd (ASX: BHP). China’s demand for our iron ore is famously insatiable and helped us get out of the quagmire of the GFC last decade. BHP also exports thermal and metallurgical coal to China. I think it’s unlikely, but if China really wanted to send a message, this would hit where it hurts.

What can we take from these risks?

I think the best lesson to draw from these events and their possibilities is how unpredictable investing can be. Most companies are influenced by how much money they can make, but other factors (like geopolitics, in this instance) can also have a tangible effect on your investments. The best investors try and make contingencies for the worst possible outcomes. It’s not a bad way to go, judging by the things we are seeing play out on the international stage in 2020.

More reading

• Brokers name 3 ASX 200 shares to buy today
• Get paid huge amounts of cash to own these ASX dividend shares
• Broker tips 10 ASX 200 shares for a post-coronavirus recovery
• 4 top ASX 200 shares for blue chip investors
• Goldman Sachs names 5 reasons iron ore prices won’t crash

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 BUBS AUST FPO. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended BUBS AUST 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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Listed medical and diagnostic facilities operators are outperforming the market today as the floodgates to elective surgeries are swung open.

The Ramsay Health Care Limited Fully Paid Ord. Shrs (ASX: RHC) share price and Sonic Healthcare Limited (ASX: SHL) share price jumped 2.7% each in the last hour of trade to $63.80 and $27.09, respectively.

The Healius Ltd (ASX: HLS) is trailing behind with a 1.9% increase to $2.40, but that’s still ahead of the 1.3% gain by the S&P/ASX 200 Index (Index:^AXJO).

Consensus earnings upgrade candidates

These companies could see a big boost to earnings as the Australian Financial Review reported on the upcoming “hidden wave” or elective surgeries and tests.

The federal government announced that it was loosening restrictions on elective surgeries as the country appears to have the COVID-19 pandemic under control.

The clampdown on non-life-threatening procedures was to ensure that our hospital system had the capacity to cope with the potential spike in emergency coronavirus patients.

Pent-up demand to hit

The warnings and response from the government to COVID-19 had another unintended consequence. Australians started putting off regular check-ups as they were worried about clogging up our health system and putting themselves in close proximity with possible COVID-19 patients.

The big drop in attendances and elective surgeries pressured the earnings of private hospitals and clinics, while falling demand for diagnostic tests (other than for coronavirus) impacted on Sonic.

However, that’s about to change and shares in Ramsay, Sonic and Healius could regain the lost ground from February.

Six-month backlog

Pent-up demand from deferred medical checks and minor procedures are likely to force medical facilities to operate overtime over many months.

The six-week clampdown on elective surgeries created a backlog of nearly 400,000 cases, according to consultant surgeon and senior lecturer at the University of Newcastle, NSW, Dr Peter Pockney.

He co-authored a major study on the return of elective surgery in 190 countries and he was reported in the AFR as saying that “it would take 22 weeks to clear if hospitals increase the number of surgeries performed each week by 20 per cent compared to pre-pandemic activity”.

Counting the costs

Elective surgeries are only one side of the problem. Australians have also put off cancer screening. The AFR also quoted the chief executive of Cancer Council Australia, Professor Sanchia Aranda, estimating that one in 10 people may have delayed checks during the lockdown.

If these delays lasted for six months, Professor Aranda believes 7,000 cancers will be picked up later. The later a cancer is detected, the higher the chance of death.

The only potential problem I see now is the waiting time to get in to see your doctor.

Not taking drastic action on COVID-19 costs lives, but acting aggressively to contain the pandemic is likely to be just as, if not more costly.

More reading

• These 4 ASX shares are at 52-week highs. Time to invest?
• Brokers name 3 ASX 200 shares to buy today
• Why the best performing ASX stock might have more room to run higher
• ASX 200 up 0.8%: Big four banks push higher but Xero tumbles lower
• Want to invest like Warren Buffett? Buy and hold these ASX 200 shares

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited and Sonic Healthcare 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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The Graincorp Ltd (ASX: GNC) share price was up as much as 10.9% today after the grain operator announced an after-tax half-year profit of $388 million. It marked a return to profitability for the company which recorded a net loss after tax of $59 million in H1FY19. 

The result reflects a significant repositioning of GrainCorp’s portfolio. During the half year ended 31 March, GrainCorp sold the Australian Bulk Liquid Terminals business and demerged United Malt Group Ltd (ASX: UMG). 

What does GrainCorp do?

GrainCorp is a food ingredients and agribusiness providing services to the grain industry. It is involved in storage and logistics, marketing and processing of grains and oilseeds. Activities are focused on 4 main grains – wheat, barley, canola, and sorghum. 

GrainCorp operates globally, managing grain pools and the import, export, and marketing of grain. It also processes and crushes oilseeds and provides edible oils. The malt business, which produced malt products and brewing inputs, was demerged in March 2020. 

Business performance 

In the half year ending 31 March 2020, each of GrainCorp’s business segments was up substantially on the prior corresponding period. The Agribusiness segment performed well, notwithstanding a third year of drought in Australia. 

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was $183 million in the March half and underlying net profit after tax (NPAT) was $55 million. Both were a substantial improvement on the prior period.

While COVID-19 presents challenges, food and agriculture are considered an essential service. GrainCorp plays a role in supporting the food and grain supply chain. Market conditions have improved considerably, with widespread rainfall across eastern Australia providing hope for a larger crop later this year. GrainCorp is well progressed in harvest readiness, including recruitment and training of seasonal workers. 

The company revised its capital structure during the half year to ensure minimal core debt. At the end of March, GrainCorp had zero core net debt. Its 10% minority stake in United Malt was valued at $112 million, providing additional financial flexibility. 

Outlook

GrainCorp is planning for higher grain exports in 2H20 with expectations of a higher crop in FY21. Favourable soil conditions across large parts of eastern Australia has supported widespread planting for the FY21 crop. Oilseed crush margins are expected to remain favourable in the second half due to prevailing canola and meal values. 

More reading

• Why Boral, Corporate Travel Management, United Malt, & Xero are dropping lower
• Why the best performing ASX stock might have more room to run higher
• ASX 200 up 0.8%: Big four banks push higher but Xero tumbles lower
• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Why Breville, Graincorp, Mesoblast, & Newcrest shares are charging higher

Motley Fool contributor Kate O’Brien 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.

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As a big fan of buy and hold investing, I’ve been looking at how investments in many popular shares have fared if you’d bought in at their IPOs.

I recently looked at payments company Afterpay Ltd (ASX: APT) and biotech giant CSL Limited (ASX: CSL). If you’re interested in seeing how they’ve fared, you can read here and here.

Today I thought I would look at another market darling, electronic design software company Altium Limited (ASX: ALU).

While Altium might seem like it has appeared out of nowhere over the last few years, its IPO was actually a lot further back than you would imagine.

The Altium IPO.

On August 4 1999, Altium, then known as Protel Systems, completed its IPO and its shares were listed on the Australian Stock Exchange. The company raised $30 million at $2.00 per share, with the funds being used to assist in financing its growth strategies.

This means that if you invested $10,000 in Altium at its IPO, you would have ended up with 5,000 shares.

It hasn’t been a smooth ride for the company and its shareholders since the IPO to say the least. In fact, no doubt many early investors gave up on the company and sold off their shares after a series of missteps eventually led to its shares falling as low as 9 cents in 2011.

But those investors that were patient have certainly been rewarded. Thanks to the emergence of the Internet of Things (connected devices) and its award-winning printed circuit board design software, Altium’s shares have not looked back since hitting that low.

Prior to the coronavirus crash, the company’s shares were trading at an all-time high of $42.76. Whereas, today they are changing hands for $35.00. This means that those 5,000 shares you picked up at the IPO are now worth a cool $175,000.

But given its strong long term growth potential, I wouldn’t be selling these shares any time soon. As I mentioned earlier here, I think Altium’s shares could easily double in value again over the next decade.

More reading

• Double your money with these high quality ASX shares
• 3 top ASX 200 shares every investor should buy
• Top brokers name 3 ASX 200 shares to buy right now
• Is the Altium share price a buy?
• ASX 200 drops over 1% at the market close

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO and Altium. 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 Australian tech sector is still relatively immature compared to the much larger US tech market. However, a broad range of interesting ASX tech shares is now emerging.

Here are 2 ASX tech shares that I think have strong long-term growth potential, and both of which have a fast-growing international focus.

Bravura Solutions Ltd (ASX: BVS)

Bravura is a locally-based fintech company that provides mission-critical enterprise software solutions to both the wealth management and funds administration industry.

The company has 2 operating segments: wealth management and funds administration. These divisions are supported by software solutions for a range of financial products such as superannuation, life insurance, investment products, and portfolio administration.

Bravura’s portfolio of offerings has been further diversified by 2 recent acquisitions in late 2019: financial planning services software provider Midwinter and software company FinoComp. Midwinter’s tools enable financial advisers to provide more comprehensive face-to-face consultations, while FinoComp adds further software functionality to Bravura’s extensive product range and provides more cross-selling opportunities.

Recurring revenue is high due to the long-term nature of Bravura’s client contracts. In 1H20, recurring revenue increased significantly by 17% to 78% of total revenue, as a growing number of new clients broadened their use of functionality. This high level of recurring revenue provides more predictable future earnings growth and cash flow expectations.

Bravura has also pleasingly not seen a material drop-off in demand during the coronavirus pandemic. The company recently confirmed that its earnings guidance for FY 2020 remains unchanged, expecting net profit after tax growth in the mid-teens excluding the benefits of the 2 recent acquisitions.

I believe Bravura is well-positioned to continue to achieve above-average market growth for a number of years to come, driven by its broadening product set and market-leading position.

Nearmap Ltd (ASX: NEA)

Nearmap is a fast-growing Australian aerial imagery and specialist location data company. It provides geospatial map technology for enterprise and government customers across Australia, New Zealand, the US, and Canada.

The company has seen a downward trend in its share price since mid-2019 due to a number of issues including the loss of a major contract. However, the company now appears to have essentially sorted those issues out and looks to be on track with its expansion plans.

According to a market update in late April, the company pleasingly revealed that its regular sales and activities hadn’t been significantly impacted by the coronavirus crisis.

Nearmap continues to deploy cost management initiatives in order to maintain a strong balance sheet and maximise flexibility without the need to raise additional capital. This includes a 30% reduction in operating and capital costs, and it has the goal of becoming cash flow breakeven by the end of FY 2020. Importantly, this cost reduction is not expected to impact its product expansion strategies.

With regard to its FY 2020 guidance, Nearmap appears to be still on track to obtain annualised contract value in the range of $102 million to $110 million in FY 2020.

More reading

• 30% off: 3 ASX 200 shares to buy on the cheap
• Got $3,000 to invest? Here are 2 fantastic ASX 200 shares to buy right now
• 5 top ASX shares to buy and hold for a decade
• These mid cap ASX shares could be long term market beaters
• How to build your first ASX share portfolio

Phil Harpur owns shares of Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Bravura Solutions Ltd. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia has recommended Bravura Solutions 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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When you’re young and first start investing you might focus more on growth shares that offer strong potential returns like Afterpay Ltd (ASX: APT) or Zip Co Ltd (ASX: Z1P).

This is because if things don’t go to plan with these investments, you have plenty of time to recover from your losses.

But as you enter retirement, I feel the prudent thing to do is to limit these investments to just a very small part of your portfolio and focus on shares that offer income and capital preservation.

With that in mind, two shares which I think are great for retirees right now are as follows:

Goodman Group (ASX: GMG)

I think Goodman Group could be a good option for retirees. It is an integrated commercial and industrial property group which owns, develops and manages industrial real estate in 17 countries. This includes warehouses, large scale logistics facilities, and business and office parks.

Goodman Group has made some very smart investments over the last decade. This was particularly the case with its decision to gain exposure to the structural tailwinds of the ecommerce market. It has direct relationships with some of the biggest operators such as Amazon and Walmart. Given how quickly online shopping is growing, these assets are likely to be in demand for a long time to come and should underpin solid earnings and distribution growth over the next decade.

Telstra Corporation Ltd (ASX: TLS)

Telstra is the undisputed leader in the telco sector with a massive 18.5 million retail mobile services and 3.7 million retail bundle and data services. While the last few years have been difficult for the company because of the NBN rollout, it is making very strong progress with its T22 strategy. Based on its half year update, the company is well on its way to simplifying its business, cutting costs materially, and carving out a leadership position in 5G.

And with FY 2021 expected to be the peak year of the NBN headwind, I feel that a return to growth is on the card in the near future. In the meantime, I’m optimistic that its dividend is sustainable at 16 cents per share and no further dividend cuts are necessary. If this proves accurate, then Telstra’s shares offer a generous fully franked forward 5% dividend yield at present.

More reading

• 4 top ASX 200 shares for blue chip investors
• Why I’d buy and hold Telstra shares for a decade
• Does 5G’s potential make the Telstra share price a long-term buy?
• 3 blue chip ASX dividend shares to buy right now
• Why high yield dividend shares can be detrimental to your wealth

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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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