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The Mesoblast Limited (ASX: MSB) share price has been garnering a lot of attention recently. But here’s why I would buy today’s CSL Limited (ASX: CSL) share price over Mesoblast.

The Mesoblast share price has surged more than 126% in 2020. By contrast, the CSL share price remains relatively flat for the year. Despite the disparity in share price performance, I think that CSL provides greater potential for long-term investors.

CSL and COVID-19

In my opinion, CSL is one of the highest quality companies listed on the ASX. The company has assured shareholders that it’s in a strong capital position and also reaffirmed its profit guidance for FY20.

CSL is also part of Australia’s solution to developing a vaccine for  coronavirus. The federal government has backed the biotech giant to make enough vaccines for the entire Australian population.

In addition to manufacturing a potential vaccine, CSL has also been working on other possible therapies for COVID-19 by collecting plasma from recovered patients.

Why is the CSL share price flat for 2020?

CSL’s muted share price action could reflect portfolio rotation among investors. As companies with greater risk profiles like Mesoblast gain momentum, investors could be selling their shares in blue chips like CSL.

In addition, there are some concerns about a decline in plasma collection volumes. In a trading update released in early April, CSL acknowledged that plasma collection volumes are expected to be impacted by the pandemic. 

As an offshore earner, the CSL share price could also be impacted by a rising Australian dollar.

Is Mesoblast just flavour of the month?

There has been a trend during the pandemic of cash hungry companies promoting potential treatments for COVID-19 and raising capital to fund research trials.

Mesoblast made headlines in April after it announced promising results for its Remestemcel-L (Ryonsil) treatment for COVID-19.

In a previous article, I highlighted that there are two important catalysts affecting the Mesoblast share price. The most recent was the Oncologic Drugs Advisory Committee (ODAC) voting in favour of Mesoblast’s Ryoncil therapy.  

Approval from ODAC is a key step in Mesoblast gaining full approval from the United States Food and Drug Administration (FDA). However, the FDA is yet to make a decision which it is scheduled to do on 30 September.

Which should you buy?

Depending on your appetite for risk and investment goals, you may have a different take on which company to invest in.

In my opinion, CSL is a proven performer over the long term. But a prudent strategy could be to wait until CSL reports its full-year results next week before deciding to buy shares.

Despite the euphoria surrounding the Mesoblast share price, I think that many investors need to factor in the risk that the company’s clinical trials fail to reach their endpoint. Even if Mesoblast gains approval from the FDA, the company still needs to manufacture its products at a cost-effective price.

More reading

• 2 important investing lessons you might have forgotten
• Why I would buy CSL and these ASX 200 blue chip ASX shares
• 2 easy ASX shares for a beginner to buy today
• Why Baby Bunting, Evolution, Mesoblast, & Xero shares are zooming higher
• ASX 200 up 0.3%: NAB Q3 update, Mesoblast rockets, Newcrest guidance disappoints

Nikhil Gangaram 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 has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why I’d buy today’s CSL share price over Mesoblast appeared first on Motley Fool Australia.

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The Legend Mining Limited (ASX: LEG) share price is up 14.81% at the time of writing to 16 cents after the company announced positive intersections at its Mawson site.

What was in the announcement?

The company announced that a diamond drill hole at its Mawson site had intersected a total of 24.65 metres of nickel copper sulphides across two intervals. This included 9.3 metres of heavy disseminated to net-textured sulphide from 132.2 metres to 141.5 metres, along with 15.35 metres of net-textured, heavy disseminated and semi massive sulphide from 219.1 metres to 234.45 metres.

Legend Managing Director, Mr Mark Wilson, commented on the result, stating:

The observations from this step out hole are an exciting development in the Mawson story. Geologically we have now intersected significant mineralisation several hundred metres to the east north-east of our previous discovery and our geophysical advice is that we probably have not hit the best part of this conductor.

“Our proven systematic methodology of DHTEM and structural logging of this hole on completion will provide the data for the design of the next diamond holes in this immediate vicinity. Meanwhile, the diamond, RC and aircore programmes are ongoing at Mawson and regionally within the Rockford Project.

About the Legend Mining share price

Legend Mining is a minerals exploration company with a primary focus on its Rockford project in Western Australia’s Fraser Range where the company is exploring for copper and nickel. Well known mining entrepreneur Mark Creasy is a major shareholder in the company.

In July, Legend Mining announced that drilling at its Mawson site had revealed assays including 5 metres at 1.63% nickel, 1.29% copper and 0.09% cobalt from 141 metres.

The company had cash at 30 June of $26,591,000, up from $9,551,000 at the end of the previous quarter.

In June, Legend Mining was added to the All Ordinaries Index (ASX: XAO), which is made up of the largest 500 companies by market capitalisation listed on the ASX.

Legend Mining raised $20 million in June via a placement to existing major shareholders, institutional and sophisticated investors. The issue price was 14 cents per share.

Legend Mining shares are up 416.13% from their 52-week low of 3.1 cents. The Legend Mining share price has returned 100% since the beginning of the year and is up 433.33% since this time last year.

More reading

• Why I would buy Woolworths and this ASX share for a retirement portfolio
• Why I’d buy today’s CSL share price over Mesoblast
• Top broker tips the Breville share price to rise beyond $30
• Wage growth is plummeting – here are 3 ASX dividend shares to start a second income
• 2 ASX growth shares to buy with $2,000

Motley Fool contributor Chris Chitty 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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The Breville Group Ltd (ASX: BRG) share price has been a positive performer on Friday.

In afternoon trade the appliance manufacturer’s shares are up 2% to $25.50.

This means the Breville share price is now up an impressive 44% since the start of the year.

Is it too late to buy Breville shares?

The good news for investors is that it may not be too late to jump on the Breville train.

According to a note out of Goldman Sachs, its analysts have just upgraded the company’s shares to a buy rating with a $30.35 price target.

This price target implies potential upside of over 19% from the current level.

Why did Goldman Sachs upgrade its shares?

The broker made the move after the release of Breville’s full year results earlier this week.

Breville reported a 25% increase in revenue to $952.2 million and a 26% lift in EBITDA to $122.2 million. Both figures were comfortably ahead of Goldman’s expectations for FY 2020.

Pleasingly, Goldman Sachs doesn’t expect its growth to stop any time soon. This is thanks to its international expansion plans.

Its analysts commented: “BRG continues to extend its runway for growth as it expands into new geographies (Italy, Portugal and Mexico were confirmed for FY21).”

“Our analysis shows that if BRG were to achieve 50% of the relative market penetration it has in the ANZ market in North American and European markets, we estimate its EBIT [earnings before interest and tax] potential could be 78% higher than our current FY23E EBIT forecast, and if BRG achieved 100% of the relative market penetration of ANZ, its EBIT potential could be 217% higher.”

Goldman sees this this optionality as highly attractive. For now, the broker is forecasting EBIT of $130.6 million in FY 2021, $156.2 million in FY 2022, and $179.4 million in FY 2023. This compares to FY 2020’s EBIT of $122.2 million.

Should you invest?

I agree with the broker on Breville and feel it could be a great long term option for investors in the retail sector along with Accent Group Ltd (ASX: AX1) and Kogan.com Ltd (ASX: KGN).

More reading

• Brokers just downgraded the Telstra share price and these other ASX 200 stocks
• Why AGL, Breville, CBA, & Telstra shares are dropping lower today
• Breville share price on watch as dividends climb 10.8% higher
• These record breaking ASX stocks just got downgraded by top brokers
• ASX reporting season reveals some upside surprises

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 Kogan.com ltd. The Motley Fool Australia has recommended Accent Group and 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.

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Wages are growing at their slowest rate in 22 years as coronavirus takes its toll on employee pay levels. Over the year to 30 June 2020, wages increased just 1.8%, the slowest pace since records began in 1997. The private sector saw a steeper decline in wage growth driven by large wage reductions across higher paid jobs. Economists say worse may be yet to come with downward pressure on wages growth to continue given the collapse in employment and depressed economic environment. If your next pay rise is looking less and less likely, take a look at these 3 ASX dividend shares which could give you a second income stream. 

3 ASX dividend shares for extra income

AGL Energy Limited (ASX: AGL)

This ASX dividend share’s revenues are underpinned by demand for energy, something that is unlikely to diminish. This was reflected in the company’s FY20 results, which showed stability during a period of significant upheaval. Underlying profit after tax was $816 million, in line with guidance of $780 – $860 million. AGL’s dividend policy targets a payout ratio of 75% of underlying profits after tax. A final dividend of 51 cents per share, 80% franked, was declared. Total dividends for FY20 were 98 cents per share. The Aussie energy giant is currently yielding over 7%, with the AGL share price trading 27% below its 2020 high. 

Harvey Norman Holdings Limited (ASX: HVN)

Harvey Norman has seen an increase in sales as a result of the pandemic as consumers spending more time at home redirect discretionary income from travel to the home environment. Despite store closures prompted by lockdowns, total sales for Australian franchisees were up 17.5% in the second half to early June. Having cancelled its interim dividend of 12 cents per share in April due to the uncertainty around the impacts of the pandemic, Harvey Norman subsequently declared a special dividend of 6 cents per share in June. The share price has risen recently in anticipation of higher sales over the full year, but the current Harvey Norman share price still provides a dividend yield of 5.15%. 

Fortescue Metals Group Limited (ASX: FMG) 

Fortescue is one of Australia’s largest iron ore producers, and has benefitted from recent strong demand for the metal. In the June quarter, the miner reported record shipments of 47.3 million tonnes of iron ore. This gave full year shipments of 178.2 million tonnes, exceeding the top end of guidance. This ASX dividend share targets a payout ratio of 50% to 80% of net profits and paid an interim dividend of 76 cents per share, up from 30 cents per share in 1H19. Although the Fortescue share price is near its high for the year, the company still offers a dividend yield of 5.56% at the time of writing.  

More reading

• AGL share price fall a warning for the LNG sector
• Metcash share price and these ASX stocks just got upgraded by leading brokers
• Why AGL, Breville, CBA, & Telstra shares are dropping lower today
• ASX down 0.55%: Telstra maintains its dividend, Treasury Wine shoots higher, AMP’s special dividend
• These high yield ASX dividend shares will help you smash low interest rates

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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If you’re looking to invest $2,000 evenly across a couple of growth shares, then you might want to take a look at the ones listed below.

Combined, I believe these ASX growth shares could turn those funds into something much larger over the next decade. Here’s why I think they are in the buy zone:

Aristocrat Leisure Limited (ASX: ALL)

I think this gaming technology company could be a great long term option. Although the pandemic has hit the company hard and it is experiencing declines in land-based unit sales and revenues generated from its daily fee model, I believe it is worth sticking with Aristocrat. This is thanks to its Digital segment, which has flourished during lockdowns and casino closures.

For example, during the first half of FY 2020, Aristocrat’s revenue increased 7% to $2.25 billion. This was driven by a 6% decrease in Land-based revenues and a 19% increase in Digital revenue. I’m optimistic that when conditions return to normal and both sides of the business are pulling together, the company’s growth will accelerate.

Bravura Solutions Ltd (ASX: BVS)

Another ASX growth share to consider buying is Bravura Solutions. It is a leading provider of software products and services to the wealth management and funds administration industries. It offers a number of quality products such as the world class Sonata wealth management platform, the Rufus transfer agency solution, the Garradin back office solution, and the recently acquired Midwinter financial planning software. The latter gives Bravura a new avenue for growth in an industry benefiting from structural tailwinds.

Combined I believe these quality products leave the company well-positioned in a very lucrative market. This could lead to the company delivering above-average earnings growth over the 2020s and make the Bravura share price a market beater over the period.

More reading

• 3 exciting ASX growth shares to buy with $3,000
• Leading brokers name 3 ASX shares to buy today
• Are you a growth investor? Then take a look at these exciting ASX shares
• 2 exciting ASX growth shares that could beat the market in the 2020s
• 3 top ASX tech shares to buy right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and 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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Investing is a tricky game to become accomplished at, let alone master. Even the best investors in the world like Warren Buffett speak of being constant learners. Much like the wonderful powers of compound interest, proficiency in investing builds on your past successes as well as your mistakes (or lack of repeating them). Thus, I’ve found that harking back to the basics can often give your returns a boost.

So, here are 2 investing lessons that I think many investors have forgotten about during an unprecedented year in the markets.

Investing lesson 1) Winners often keep winning

This is a popular concept here at the Fool. Usually, if a company is doing something right (that might cause its share price to rise), it will keep at it. Too often, investors sell out of a top-performing company in order to ‘take profits off the table’. Whilst it’s true that no one goes broke taking a profit, it’s also true that winners often keep on winning.

As a past victim of this phenomenon (I sold CSL Limited (ASX: CSL) shares at $180 after doubling my money), I can tell you about the lost benefits of not sticking with a winner firsthand. So if you have a company that’s doing everything right, you don’t want to cut yourself loose chasing a hollow gain.

Think about how silly someone who sold out of Xero Limited (ASX: XRO) at $20 would feel today. Or Afterpay Ltd (ASX: APT) at $12. Or Amazon.com at $100. If you have a winner, don’t kill the goose if it keeps laying the golden eggs.

Investing lesson 2) Using debt is often a bad idea

Proponents of gearing and leverage (other names for investing with borrowed money) will tell you its the best thing they’ve ever done. But the reality is that investing with debt is a high-risk strategy – and one that could see you go back to square one very easily. Remember, borrowing to invest can magnify your gains in a bull market, which can be intoxicating. But it can also magnify your losses if things go south. And in these uncertain times, I think making a leveraged bet that the share market will continue to rise uninterrupted in the coming months and years is a big call.

Keep in mind that if you have a margin loan, it can always be called in by your lender, especially during a share market crash. Having to sell your shares at the bottom of a market cycle can undo years of progress. You don’t want to end up where you were 5, 20 or 20 years ago, just because you took on too much debt.

More reading

• Why I would buy CSL and these ASX 200 blue chip ASX shares
• 2 easy ASX shares for a beginner to buy today
• Why Baby Bunting, Evolution, Mesoblast, & Xero shares are zooming higher
• Mesoblast share price on watch after US regulatory approval
• Should you invest in Splitit 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 CSL Ltd. and Xero. 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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The Waypoint REIT Ltd (ASX: WPR) share price is up by 3.98% today following a market update. The company has upgraded its 2020 financial year guidance for distributable earnings growth over the 2019 financial year from 3–3.75% to 4–4.25%.

Waypoint reported its US Private Placement (USPP) has been priced with US$178 million (AU$245 million) of notes to be issued, split across 7, 10- and 12-year tranches with a weighted average maturity of 9.2 years.

Waypoint will use the USPP proceeds to pay down a combination of term and revolving credit facilities. The transaction is expected to be funded on 29 October 2020

Hadyn Stephens, CEO of VER Manager (which manages the Waypoint REIT), said:

With the USPP transaction now priced, we are very pleased to be able to upgrade our FY20 guidance. We look forward to sharing further details on our half year performance and outlook at our half year results presentation on 20 August 2020.

Kerri Leech, CFO of VER Manager, added:

Following Moody’s assignment of a Baa1 credit rating in December 2019, we are pleased to have executed on our strategy of extending our debt maturity to more closely align to the weighted average lease expiry of our portfolio and diversifying our debt platform, particularly in the current economic environment.

What does Waypoint REIT do?

Waypoint REIT (formerly Viva Energy REIT Ltd) is Australia’s largest listed real estate investment trust (REIT) with a market cap of $2 billion. It owns a portfolio of service stations around Australia, with more than 400 Shell-branded service station properties around Australia. Waypoint REIT’s properties are typically operated by Coles Group Ltd (ASX: COL) as Coles Express service stations.

Buying shares in a company like Waypoint REIT provides investors with exposure to commercial property without the complications that come with direct property ownership.

Waypoint REIT shares first listed in 2016. Since then it has grown to sit comfortably within the S&P/ASX 200 Index (ASX: XJO).

How has the Waypoint REIT share price performed?

With a portfolio of service stations, the Waypoint REIT share price took a hard hit from the lockdowns and state border closings put in place to eliminate the spread of COVID-19.

From 6 March to 19 June, Waypoint shares fell 28%. The share price has since gained 29%. Year-to-date, the Waypoint REIT share price is almost back to where it started, down just 1.8% despite the huge hit to travel and petrol use.

More reading

• Why I would buy CSL and these ASX 200 blue chip ASX shares
• Why today is a great day to add to your ASX share portfolio
• Brokers just downgraded the Telstra share price and these other ASX 200 stocks
• ASX 200 up 0.3%: NAB Q3 update, Mesoblast rockets, Newcrest guidance disappoints
• How investing in ASX shares could help you grow $10,000 into $100,000

Motley Fool contributor Bernd Struben 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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If you’re looking to add a few ASX 200 blue chip shares to your portfolio in August, then the three listed below could be worth considering.

I believe these blue chips could generate solid returns for investors over the next few years. Here’s why I would buy them:

CSL Limited (ASX: CSL)

The first blue chip I would buy is this global biotherapeutics company. I think it has the potential to provide investors with strong returns over the next decade, especially after recent weakness in the CSL share price. This has been caused by concerns over plasma collections during the pandemic and the impact this could have on its FY 2021 results. However, I’m optimistic this will be offset by other sides of the business, such as flu vaccine sales. In light of this, I think investors should focus on the long term, which remains very positive. This is due to its leading therapies and lucrative research and development pipeline.

Goodman Group (ASX: GMG)

Another blue chip ASX 200 share to consider buying is Goodman Group. It is an integrated commercial and industrial property group with a high quality portfolio of assets. It remains my favourite option in the property sector due to its exposure to industries benefiting from structural tailwinds such as ecommerce. These assets are likely to be in demand for many years to come, which I believe leaves it well-positioned for solid long term growth.

REA Group Limited (ASX: REA)

A final option to consider buying is this property listings company. Times have been hard to REA Group over the last few years, but thanks to its high quality business model, it has still managed to deliver strong profits. And although the tough trading conditions are likely to remain for at least the next couple of quarters, I wouldn’t let that put you off investing. I expect REA Group’s growth to accelerate materially once things return to normal. Especially given its leadership position, growing global operations, new revenue streams, potential price increases, and cost cutting.

More reading

• 2 important investing lessons you might have forgotten
• Waypoint REIT share price gets a boost from financial guidance upgrade
• 2 easy ASX shares for a beginner to buy today
• Why today is a great day to add to your ASX share portfolio
• Brokers name 3 ASX shares to buy right now

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 has recommended REA Group 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 Hills Ltd (ASX: HIL) share price soared by as much as 13% earlier today, after the company released a market update.  

At the time of writing, the Hills share price has pulled back to 16 cents per share, up 1.29% on yesterday’s close.

What did Hills announce?

Hills provided shareholders with a market update earlier today.

The company noted that it expected to report a loss for FY20 in the range of $6 million to $7 million. Hills cited one-off costs of $7 million to $8 million in FX adjustments, redundancies and inventory provisions for the result.

In addition, Hills noted that the company has significantly improved its balanced sheet and is well positioned to emerge stronger. The company noted that net debt for FY20 is expected to be below $9 million, down from $28.4 million the year prior.

The update also highlighted that the company’s core markets have shown relative resilience through the COVID-19 pandemic, with solid trading in July. Management from Hills cited the company’s improved balance sheet and assured investors that the business will emerge from the pandemic in a competitive position.

In the update Hills noted that its ongoing cost reduction program and Job Keeper payments have allowed the company to retain employees during the pandemic.

Hills also noted that these estimations are unaudited, with more details expected with the release of the company’s FY20 results.

More on Hills 

Hills is an Australian-owned company that consists of 2 businesses.

Hills Health Solutions provides nurse call solutions, patient engagement and wifi networks in hospitals and aged care facilities throughout Australia and New Zealand. The company’s second business is Hills Distribution, which provides integrated security and IT services to consumers.

According to its trading update today, Hills has been able to reduce its net debt after divesting from its non-core businesses. The divestment in 2019 has allowed the company to focus on its healthcare and distribution businesses.

In addition, Hills has looked to limit the damage of the COVID-19 pandemic by asking its staff to take pay cuts. In April, the company saw staff on the lowest salaries experience a 10% cut, whilst a 35% cut was given to those on the highest salaries.

Foolish takeaway

The Hills Limited share price is currently trading 1.29% higher for the day at 16 cents. Shares in the company have been sold down after hitting an intra-day high of 18 cents.

More reading

• Top broker tips the Breville share price to rise beyond $30
• Wage growth is plummeting – here are 3 ASX dividend shares to start a second income
• 2 ASX growth shares to buy with $2,000
• 2 important investing lessons you might have forgotten
• Waypoint REIT share price gets a boost from financial guidance upgrade

Motley Fool contributor Nikhil Gangaram 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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Starting your investing journey as a beginner can be difficult. You might have high expectations, perhaps after seeing a social media post about buying expensive cars with a month of day-trading profits. You might have heard how the whole thing is a giant casino, primed to rob the ordinary investor. Some investors do view the share market through these kinds of lenses, but it’s rarer than popular culture would have you believe.

I always think the best way to start investing is by selecting passive, managed investments that outsource the hard work for you. That way, you can begin to see the immediate benefits of holding a growth asset, without becoming disillusioned that your mate’s stock pick hasn’t doubled up by now. So here are 2 easy ASX shares that I think any aspiring investor can start out with today.

Magellan High Conviction Trust (ASX: MHH)

This investment is a listed investment trust (LIT), which basically means it’s a fund that invests in other shares for you. In this case, Magellan High Conviction Trust looks to hold around 8–12 ‘of the world’s best companies’. It primarily focuses on the US share market. Some of its recent holdings including Alphabet (owner of Google), Tencent Holdings, Facebook and Microsoft.

The flexibility of this LIT’s mandate, as well as its focus on the ‘best of the best’, makes this investment a great one for a beginner investor in my view. Its targeted 3% annual cash distribution is also a plus.

Australian Foundation Investment Co Ltd (ASX: AFI)

AFIC (as it’s easily known) is an old soul of the ASX, having been around since 1928. It’s a listed investment company (LIC), which is similar to a LIT, but with a slightly different legal structure. But it shares an LIT’s ability to act as an investor on your behalf buy buying and selling other shares.

AFIC has a reputation for conservative, long-term investing, particularly through ASX blue-chip shares. You’ll find most of the famous ASX blue chips in AFIC’s portfolio, including CSL Limited (ASX: CSL), Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP).

AFIC may not be the kind of high-risk investment that has the potential to make you rich overnight. But this is precisely why it’s a top choice for a beginner in my view. AFIC is also known for its robust, fully franked dividends. On current prices, you can expect a trailing dividend yield of 3.8% from this company.

Foolish takeaway

In my view, either (or both) of these shares would make perfect investments for a beginner. AFIC is a domestically-focused company, whereas the Magellan High Conviction Trust looks overseas for its investments, so choose your preference!

More reading

• 2 important investing lessons you might have forgotten
• Why I would buy CSL and these ASX 200 blue chip ASX shares
• Mesoblast share price on watch after US regulatory approval
• Forget CBA and buy these quality ASX dividend shares
• Why the rise of electric vehicles could benefit ASX mining shares

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Facebook, and Magellan High Conviction Trust. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares) and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended Alphabet (A shares) and Facebook. 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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