Your instant 5 share diversified portfolio

For potential investors considering entering the stock market, maintaining a well-diversified portfolio is a must. However, when you’re new, it can be difficult to find enough well priced quality companies to fill up your portfolio, let alone know how to analyse them.

With that in mind, I’ve compiled a list of five stocks I’d gladly recommend to new (and experienced!) investors.

  1. Rio Tinto Limited (ASX: RIO) is out of favour with the market at the moment, given its reliance on iron ore. However, Rio is the lowest cost producer in the world, affording it huge cash flows and a strong advantage over its smaller competitors.
  2. Computershare Limited (ASX: CPU) is the perfect ultra-long-term stock with significant competitive advantages and a tidy dividend to boot. With a huge customer base and dominance in a number of global markets, I think it’s a great buy for risk-averse investors given the shares are reasonably priced.
  3. Cover-More Group Ltd (ASX: CVO) is a great company because it’s great at what it does: travel insurance. It recently reported a strong set of results and is firmly on my buy list. To complement its growth, it has a modest but handy 1.6% fully franked dividend.
  4. Resmed Inc. (CHESS) (ASX: RMD) is a dual-listed healthcare stock with exposure to global markets. It develops and manufactures products for individuals with respiratory issues such as sleep apnoea.
  5. Yellow Brick Road Holdings Ltd (ASX: YBR) is a junior diversified financial company with experienced management and an eye for customer satisfaction. Although not yet profitable, the long-term upside for the company is very appealing.

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I have exposure to a number of these companies but will likely buy more shares in each of them in coming months. However, our top analyst, Scott Phillips, recently identified one cheap but growing ASX stock with a 6.7% grossed-up dividend yield which I think is a STANDOUT buy today. If you're interested in knowing its name, just click on the link below, enter your email address and we'll send you the FREE report on his top dividend stock idea for 2014 - 2015!

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Motley Fool Contributor Owen Raszkiewicz owns shares in Yellow Brick Road Holdings Ltd, is long Jun 2016 $4.75 Warrants in Computershare Limited and Dec 2017 $47.71 Warrants in Rio Tinto. The Motley Fool owns shares in Computershare.

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