The world's greatest investor Warren Buffett once said: "Investing is simple, but it's not easy."
Buffett couldn't have been more right. Many people buy shares in the expectation that it will bring vast wealth after just a few hours of work – how many jobs do you know that make you that rich, that quickly?
People with this get rich quick approach unfortunately have it wrong. The share market shouldn't be viewed as a lottery machine; rather it should be seen as a vehicle to buy into profitable, growing businesses to generate a decent return on your savings.
Once an investor has the right mindset he or she is then ready to set about the "simple" task of identifying good investments. There are lots of reasons this task isn't "easy", but if I was given $10,000 today, here are three stocks I'd be looking to buy.
- Shine Corporate Ltd (ASX: SHJ) is a recently listed legal services firm. Its peer Slater & Gordon Limited (ASX: SGH) has been a superb performer gaining over 200% in the past five years. The opportunities for Shine to similarly benefit from consolidating the legal industry provide significant scope for growth. The business also has defensive characteristics.
- Virtus Health Ltd (ASX: VRT) is a leading provider of IVF services in Australia and now also has operations in Ireland and Singapore. Like fellow health sector providers such as Ramsay Health Care Limited (ASX: RHC), Virtus is positioned to grow earnings thanks to rising global health care spending and growth by acquisition opportunities.
- iiNet Limited (ASX: IIN) is a growing second tier telecommunications provider. While Telstra Corporation Ltd (ASX: TLS) is the lumbering giant of the industry, iiNet is nimble and can cherry pick profitable segments of the market. With demand for telco and particularly data services continuing to increase at a fast rate, iiNet is well positioned to benefit.
