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3 shares for a beginner’s portfolio

It’s hard to know where to start in the share market when there are literally thousands of options.

However, the important step is just to start doing it and let time do its thing to compound returns.

One of the easiest ways to get youngsters interested in shares is to invest in what they know or they understand. Here are three options that fit the bill:

Vanguard Australian Share ETF (ASX: VAS)

Vanguard runs many funds that have very low fees. The less you’re charged in fees the more you have for your investment.

One of the funds that Vanguard runs focuses on the Australian share market. If you buy into this fund then you get a small piece of every large share like Commonwealth Bank of Australia (ASX: CBA), Telstra Corporation Ltd (ASX: TLS), BHP Billiton Limited (ASX: BHP) and Wesfarmers Limited (ASX: WES).

This fund is a good and easy way to get strong diversification with a big dividend from one share.

Greencross Limited (ASX: GXL)

Greencross is the pet giant of Australia, it owns Greencross vets and Petbarns. It has a clever strategy of co-locating a vet inside a Petbarn, which is a good way of boosting revenue and saving on costs.

The pet industry is a defensive sector in my opinion because of the lengths we are happy to go to making sure our furry children are well taken care of, no matter the cost.

Greencross’ share price has fallen significantly over the past two years, making today’s price quite attractive.

Greencross is trading at 13x FY18’s estimated earnings with a grossed-up dividend yield of 5.11%.

Amaysim Australia Ltd (ASX: AYS)

Everyone understands how important phones are to us these days. Low-cost phone providers are having a lot of success attracting customers with their big data plans.

Amaysim is one of the most successful in the low-cost space and is now expanding by offering NBN plans and energy with its acquisition of Click Energy.

It’s currently trading at 34x FY17’s earnings with a grossed-up dividend yield of 6.57%.

Foolish takeaway

All three shares could provide new investors with solid capital growth and income over the coming years and I’d be very happy to add all of them to my portfolio.

5 stocks under $5

We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.

And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

*Extreme Opportunities returns as of June 5th 2020

Motley Fool contributor Tristan Harrison owns shares of Greencross Limited. The Motley Fool Australia owns shares of Greencross Limited, Telstra Limited, and Wesfarmers Limited. 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.

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