I believe that diversification is important to achieve satisfactory returns in the short-term and the long-term.
Diversification doesn't just mean spreading your money among Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and Telstra Corporation Ltd (ASX: TLS).
I think it's important that investors spread their money across different industries and different businesses that have good growth prospects.
Here are three I think fit the bill:
BetaShares Global Agriculture ETF (ASX: FOOD)
I'm a big believer in the future of food as an investment idea. The companies producing the food are increasingly using automation to improve the efficiency of the food production and the global population is increasing too, which requires more food output.
This index provides investors with exposure to some of the biggest food-related companies in the world, like tractor company Deere & Co. I will add this ETF to my portfolio at some point in the future.
Macquarie Group Ltd (ASX: MQG)
Macquarie may be Australia's fifth largest bank, but it offers a completely different earnings profile. It earns a majority of its money overseas, not in Australia. Plus, the investment bank has shifted its focus to less-cyclical businesses like asset management.
I think the bank is wisely targeting the growth of infrastructure development and renewable energy, which should produce solid returns over the next decade.
Macquarie is trading at 14x FY19's estimated earnings.
Domain Holdings Australia Limited (ASX: DHG)
Australia is addicted to property. It's probably a good idea to get exposure to this huge asset class, but you can do that without actually owning a property. Domain owns the second largest property portal site in Australia.
Domain should be able to charge more for property advertisements over time because the cost of the ad is such a small portion of the marketing budget, yet it's a very important part of selling the property.
Domain is trading at 29x FY19's estimated earnings.
Foolish takeaway
I am actively looking to buy all three of these shares, although I'll probably wait to buy Macquarie and Domain until Australia has an economic dip because both of those businesses will likely suffer more than some others in my portfolio.
