Investors have no shortage of shares to invest in.

Sure, there mightn’t be as many public businesses in Australia as there are in the United States or Europe, but there are still nearly 2,200 shares listed on the ASX.

While it’s nice to have optionality as an investor, however, it can also be difficult to know where to start looking for new ideas.

Stocks to avoid

First, you can forget about all the mining exploration businesses which are speculative, at very best. There are plenty of others with market values so small, and shares so illiquid, that you’d have a tough time buying as well.

It’s likely that you’re also familiar with certain industries based on your own career and experiences. Perhaps you’ve worked in retail, for example, and are aware of the changes that are impacting businesses such as Myer Holdings Limited (ASX: MYR), making you inclined to avoid them.

Other industries that have struggled in recent years include mining and mining services, while airlines typically make for bad investments as well.

Stocks to buy

Thus, there are plenty of ways to narrow down your search for new investment ideas. Sticking with companies you know or are familiar with is also smart, which helps to focus your search even further.

Reading through broker reports and upgrades are another way to get new ideas, together with reading through company updates on the ASX website.

Of course, there is no sure-fire way to find new winning investment ideas: some you will stumble upon by chance while others can take days or even weeks of research.

For an idea of what many other investors have been investing in recently, Al Bentley, CEO and founder of Simply Wall St, recently noted on the ASX website the top 10 shares Australian users have invested in over the last three months. Not surprisingly, many of them are names that most Australians are very familiar with…

Company Market Cap ($billion) Recent Share Price
Commonwealth Bank of Australia (ASX: CBA) 134.1 $78.41
Northern Star Resources Ltd (ASX: NST) 2.91 $4.84
Telstra Corporation Ltd (ASX: TLS) 68.98 $5.65
a2 Milk Company Ltd (Australia) (ASX: A2M) 1.48 $1.92
Metals X Limited (ASX: MLX) 1.03 $1.745
Woolworths Limited (ASX: WOW) 29.6 $23.20
Bellamy’s Australia Ltd (ASX: BAL) $1.31 $13.60
Australia and New Zealand Banking Group (ASX: ANZ) 76.79 $26.44
Flight Centre Travel Group Ltd (ASX: FLT) 3.36 $33.32
BHP Billiton Limited (ASX: BHP) 109.54 $20.59

Data provided by S&P Global Market Intelligence

The shares in that list can be found in the Simply Wall Street portfolio. Of course, just because these shares are popular among other investors doesn’t automatically make them a buy. In fact, following the investing crowd too much can result in sub-par returns in the long-run – especially when you buy in later than most others.

That said, however, I do particularly like a2 Milk and Bellamy’s, which both produce infant formula and stand to benefit from growing demand both in Australia and in China.

Telstra Corporation is another great business and one that dividend investors ought to take a closer look at, while Flight Centre could also be a business worth your attention.

The banks, on the other hand, I’d be inclined to avoid. Although their shares have retreated in price since the highs they achieved in 2015, they are still facing a number of headwinds which could drag their shares (and dividends) lower over the coming years.

Same goes for the miners. BHP and Northern Star Resources have surged in price in recent months, but both rely on higher resource prices – especially iron ore, petroleum and, in Northern Star Resources’ case, gold.

The ASX is littered with shares that have the potential to generate significant gains for investors, but also its fair share of those which could destroy your wealth. Click here now, or read on below, for a free report highlighting three shares we think you should avoid today, and one which could be a great buy...

Free Report: 3 Rotten Shares to Sell, and 1 to Buy Today

After a double-digit rally for the ASX since 2016 lows, investors should be on high alert. You'll find a full rundown below of 3 shares we think you should avoid today plus one top pick worth buying, even if the market turns south and the RBA keeps rates at an "emergency low." Simply click here to uncover these stocks.

HOT OFF THE PRESSES: Motley Fool’s #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.

Motley Fool contributor Ryan Newman owns shares of Bellamy's Australia. The Motley Fool Australia owns shares of A2 Milk and Bellamy's Australia. 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 Bruce Jackson.