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Where I would invest $5,000 in the share market

It’s no secret that the outlook for rate rises in Australia is looking rather subdued right now.

In fact, according to the latest Westpac Banking Corporation (ASX: WBC) Weekly report, its economics team expects the Reserve Bank of Australia to keep rates on hold at the record low of 1.5% until at least March 2020.

So if you’re lucky enough to have $5,000 gathering dust in a savings account I would consider putting it to work in the share market.

After all, the Australian share market provided a return of 8% in FY 2018, which is vastly superior to anything that savings accounts provided.

With that in mind, here is how I would invest $5,000 in the share market today:

BHP Billiton Limited (ASX: BHP)

While there are concerns that President Trump’s war of words could ultimately lead to a global trade war, I’m optimistic that this will be avoided and the global economy’s growth will not be inhibited. If this proves to be the case then I expect demand for commodities will remain strong, putting BHP in a position to enjoy high prices and deliver bumper profits. This could make it a great option for investors looking to gain exposure to the resources sector.

Blackmores Limited (ASX: BKL)

This health supplements company has fallen out of favour with investors this year after its performance was impacted by supply issues. However, at the end of the third quarter management was confident that this was only a short-term headwind and that its business would return to normal in the now completed fourth quarter. Last month CEO Richard Henfrey bought shares through an on-market trade, which could be a sign that things have indeed improved.

Corporate Travel Management Ltd (ASX: CTD)

I think this corporate travel services provider could be a great option for investors despite its sizeable share price gain over the last 12 months. Thanks to the growing demand for its services and the opportunities it has to grow through acquisitions in a fragmented market, I expect Corporate Travel Management to deliver solid earnings growth for the foreseeable future. This should go some way to justifying the lofty earnings multiple its shares trade at today. However, as with all growth shares, it is worth remembering that a failure to achieve the high expectations of the market could lead to a severe share price decline.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Blackmores Limited and Corporate Travel Management 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 Scott Phillips.

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