3 companies young investors should start buying today

Balance risk and reward with companies like Xero FPO NZX (ASX:XRO) and ResMed Inc. (CHESS) (ASX:RMD).

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you're in your twenties (or even your thirties) it's likely you're just starting out on your investment journey with decades ahead of you to grow and compound your wealth.

That's incredibly exciting!

Time is a huge asset to have on your side, so even if you're starting off with a small amount to invest, starting early, investing regularly and leaning from any mistakes will help drive you towards your goals.

Buying units in an exchange traded index tracking fund can be an excellent way to start. These funds have a great history of outperforming actively managed investment funds and reduce the firm specific risk, which comes with owing individual companies.

However there is still something special about owning a piece of a company directly, especially being able to walk in the door as if you part-own the place. If you're comfortable taking on the extra risk, here are three companies to consider buying today.

1. XERO FPO NZX (ASX: XRO)

Xero sells cloud accounting services to small and medium businesses. It's a relatively young company and is not yet producing a profit which adds risk, but Xero is growing revenue at an exceptional pace and is expanding globally.

The growth story could take years to play out, so it pairs well with investors with time on their side.

2. ResMed Inc. (CHESS) (ASX: RMD)

ResMed manufactures breathing assistance products and should benefit from the trend of aging populations over the next decade.

The company has consistently grown earnings per share over the last 10 years and although a reasonably mature business it has only moderate debt and a good return-on-equity (ROE), which could produce considerable wealth in the years to come.

3. Orion Health Group Ltd (ASX: OHE)

Orion Health blends exposure to tech and healthcare, providing software that links differing healthcare systems to each other. This greases the flow of data and patient healthcare records. These systems optimise healthcare information flows and save hospitals and governments hundreds of thousands of dollars annually.

Orion has grown revenues at an average compounded rate of 25% for the last seven years and although the company does not yet report a profit. It has a major advantage in the field as a first mover.

Motley Fool contributor Regan Pearson owns shares of Xero. The Motley Fool Australia owns shares of Xero. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »