MENU

Where I would invest $20,000 in the share market

With many of Australia’s leading economists predicting that the Reserve Bank will keep rates on hold at the record low of 1.5% until late next year at the earliest, it’s quite likely that the paltry interest rates on offer with savings accounts are here to stay.

In light of this, if I had $20,000 sitting in a savings account I would put it to work in the share market.

Three shares which I would consider investing this money in are listed below. Here’s why I think they are worth considering:

BWX Ltd (ASX: BWX)

Although the company’s name may not be well-known, no doubt most readers will be well aware of its popular Sukin skincare range. Thanks to the international expansion of the Sukin brand and a number of earnings accretive acquisitions, I expect EBITDA growth to be around 50% in FY 2018. While this level of growth is likely to slow over the following years, I still believe the company is capable of above-average earnings growth for the next decade. This could make it a great buy and hold investment option.

Nextdc Ltd (ASX: NXT)

With more and more businesses shifting to cloud-based software and storage, I believe this leading data centre operator is in a great position to deliver strong earnings growth for the foreseeable future. Especially with NEXTDC planning to open three new state of the art data centres this year. This will boost overall capacity greatly, cement its market-leading position, and help it capture the incredible demand for data centre services.

Telstra Corporation Ltd (ASX: TLS)

Although this telco giant’s shares could yet sink lower, I believe the negative news flow is out of the way now and its shares could soon find their feet and start to rebound higher. In FY 2018 the telco giant plans to pay a 22 cents per share dividend, which equates to a fully franked yield of 6.4% at the current share price. While there are concerns that this dividend could come under pressure in the future, I remain confident that the Internet of Things market could help Telstra offset some of the post-NBN rollout earnings gap.

Finally, here are three more top shares that could be great investments in 2018.

The Disruptors: 3 Revolutionary Aussie Companies to Back for 2018

We're living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.

That's why at The Motley Fool we've been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Cochlear or REA Group.

We've found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of BWX Limited and Telstra 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.