You'd be mistaken to believe all share market investors have hundreds of thousands of dollars invested. In fact, according to a survey conducted by Suncorp Group Ltd (ASX: SUN) in late 2013, one-third of baby boomers have less than $100,000 in their retirement nest egg.
Yes, that's right, I said one-third!
If there ever was a time for investors, young and old, to begin investing in the stock market. It is now.
Sure, you may lose money on some stocks. But over the long term you'll be richer for it.
That's why I think if you've got 10 (or more) years until retirement and have more than $500 you won't need in the near future, you too should consider getting started.
With that in mind, if I had $20,000 to start investing again, I'd buy the following three S&P/ASX200 Index (INDEXASX: XJO) stocks…
- Rio Tinto Limited (ASX: RIO) has great long-term exposure to rising commodity prices in my opinion. Shares in Rio currently trade cheap as a result of constant write-offs, depressed commodity prices and a recent history of poor earnings. However, I believe Rio has turned a corner and it will significantly benefit from an upswing in aluminium, coal and uranium prices. Cost reductions, increased dividends and a falling capex spend should uphold earnings in the near term.
- Computershare Limited (ASX: CPU) is a dominant share registry services company with operations in over 20 countries. Its customers include prominent local and international businesses such as Woolworths Limited (ASX: WOW) and BHP Billiton Limited (ASX: BHP). Given its global dominance, it has a huge customer base which will enable its management to leverage further growth. This, in addition to its modest dividend yield, gives me confidence it'll outperform the market in the long run.
- Slater & Gordon Limited (ASX: SGH) is Australia's leading personal injury law firm. It recently reported a great set of full-year results which reinforced its decision to expand into the larger UK market. Although short-term gains appear fully-priced into the stock, the longer-term outlook for Slater & Gordon remains extremely bright, in my opinion.
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If I had $20,000 today, I would buy each of these businesses. Sure, their share prices could drop in the short-to-medium term, so instead of seeing this as a bad thing, always keep some of your funds in cash to capitalise on the lower prices Mr Market is willing to offer you.
