Choosing which shares to buy can be one of the most difficult decisions of investing. There are so many choices and so many good reasons to buy different shares. It might feel overwhelming not knowing what to buy, you might want a bit of all of them!
There are companies that you can buy that own lots of companies themselves. These companies are called listed investment companies (LICs) and I think they're a great place to start for uncertain investors.
However, even if you've decided you want to buy LICs, you still have to choose which one. Below are three choices that I think would make a great start:
Australian United Investment Company Limited (ASX: AUI)
This LIC has been operating since 1953, which makes it one of the oldest LICs on the ASX. Having a long-term, stable business to look after your money can be reassuring.
It focuses on investing in Australia's biggest 'blue chips' which has made it very reliable. Its top five holdings are: Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group (ASX: ANZ), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd. (ASX: NAB) and Wesfarmers Ltd (ASX: WES).
This conservative investment approach has meant that the dividend has been maintained or grown every year since 1992. It's currently trading with a grossed-up dividend yield of 6.03%.
WAM Leaders Ltd (ASX: WLE)
WAM Leaders is a listed investment company run by Geoff Wilson and his team. Unlike the other WAM LICs, this one focuses mostly on ASX200 businesses.
This LIC will likely be much more active in its share dealing than most other big LICs and won't necessarily always have the biggest blue chips as its top holdings.
If WAM Leaders can perform well with the stability of owning Australia's biggest 200 businesses then it will be a very pleasing LIC to own.
This LIC is quite new, so it hasn't built up the profit reserves needed to pay the large dividends that the other WAM LICs do. However, it has just started paying a dividend of one cent per share half yearly. This equates to a grossed-up dividend yield of 2.5% and management expect to increase the dividend to a higher yield like WAM Capital Limited's (ASX: WAM) 8.53% over time.
Clime Capital Limited (ASX: CAM)
Clime Capital Limited is an interesting LIC, as it recently changed its strategy to start investing overseas as well as in Australia.
Some of its largest holdings that are around 3% (or more) of its portfolio are: Australia and New Zealand Banking Group, Seek Limited (ASX: SEK), Crown Resorts Ltd (ASX: CWN), Henderson Group plc (ASX: HGG), Nick Scali Limited (ASX: NCK), Speedcast International Ltd (ASX: SDA) and Collins Foods Limited (ASX: CKF).
Clime has been a great dividend payer for shareholders, it's maintained or grown its dividend every year since 2007 and could keep doing so thanks to its global investment choices. It's currently trading with a grossed-up dividend yield of 7.58%.
Foolish takeaway
I think all three of these relatively unknown LICs would make good investment options and could give you good diversification and income. I think WAM Leaders and Clime will create the best investment performance, but Australian United will be the most reliable through recessions.
If none of these three appeal, perhaps these three great growing blue chips will be more to your investing taste.
