Invest in what a two-year-old knows best with Blackmores Limited (ASX: BKL) shares, a2 Milk Company Ltd (Australia) (ASX: A2M) shares and Freedoms Foods Group Ltd (ASX: FNP) shares.
Why invest like a two-year-old?
Let's be honest with each other, two-year-olds have it all figured out. Eat. Play. Sleep. Repeat. It doesn't get much better than that — the simple life.
Eat. Play. Sleep. Repeat. It doesn't get much better than that — the simple life.
It doesn't get much better than that — the simple life.
Although the professionals would love you to believe that investing is somehow extremely complicated, it's actually very simple.
Peter Lynch is one of the greatest investors of all time, generating a 29% per year return for 13 years. He grew his investment fund from $18 million to $14 billion in that time.
Importantly, he believed ordinary folks like you and me had an advantage over the professionals because we can go into a store and see what products work and what doesn't.
One of my favourite quotes from Lynch is this:
"If you're prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won't get bored."
Here's another one:
"The simpler it is, the better I like it."
And:
"All the math you need in the stock market you get in the fourth grade."
But let's not forget this one:
"Owning stocks is like having children — don't get involved with more than you can handle."
3 ASX shares to match
Investing for your children's future is important. One way many of us do that from a young age is by buying nutritious foods and drinks. Any mother or father will tell you, that's not always cheap. At least, for the good brands.
1. a2 milk: a2 milk makes dairy products containing only the a2 protein, which is supposed to be good for tummy health. In addition to its popular milk, it has infant formula, yoghurts and ice cream. Despite rival Bellamy's Australia Ltd (ASX: BAL), falling to its knees, a2 has powered ahead.
2. Blackmores: Like a2 milk, Blackmores creates products made from 'good for you' ingredients mixed with some healthy marketing. Blackmores have recently expanded into infant formulas but their bread and butter, so to speak, is in vitamins. Both Blackmores and a2 milk are targeting the huge Chinese market.
3. Freedom Foods: Freedom Foods is a diversified foods business, creating everything from gluten, vegan and organic bars to allergy friendly kid snacks. Anyone with an allergy can attest that these products don't come cheap, but they are good quality.
Foolish Takeaway
You don't need a PhD in financial mathematics to be a successful investor. Chances are if you are buying a2 milk's infant formula by the boatload and your friends are buying it by the kilogram, others are too! Of course, don't go in all guns blazing, putting your life savings in just one share. Buy a diversified a portfolio of shares in companies that you understand. Then hold on.
