Where I would invest $5,000 in the ASX

While $5,000 may not seem like a life-changing sum of money to invest in the share market, if you do it on an annual basis over a long enough period it has the potential to grow significantly.

For example, the Australian share market has provided an average annual return of 9.8% over the last 30 years according to Fidelity.

If the local share market did the same again over the next 30 years and you invested $5,000 into it each year, in three decades your investments would have grown to be worth almost $870,000.

With that in mind, here are three shares I would consider investing that first $5,000 into:

Blackmores Limited (ASX: BKL)

Although its performance has been a little inconsistent over the last couple of years, I believe the long-term outlook for Blackmores is extremely positive. Especially given the health supplements company’s exposure to the growing Asian middle class market. For the first nine months of FY 2018 Blackmores generated sales of $102 million in China, up 21% on the prior corresponding period despite the impact of supply challenges. Similar growth was experienced from its businesses in other Asian markets.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

This pizza chain operator’s shares have been incredibly volatile over the last 12 months due to concerns that it may fall short of expectations again in FY 2018. While this volatility may be hard to take, I believe it is worth being patient, ignoring short term movements, and focusing more on the long-term. With the company aiming to more than double its store network over the next seven years and widen its margins considerably, I believe there is significant long-term upside for its shares that makes Domino’s a great buy and hold candidate.

Helloworld Travel Ltd (ASX: HLO)

Another top buy and hold investment option could be this travel company which I think it is one of the most attractively priced shares in a fast-growing industry. At under 18x estimated full-year earnings, Helloworld looks to be great value considering it grew net profit before tax by 39% in the first half. With its medium term growth outlook looking very positive and the company having opportunities to grow through acquisitions, Helloworld could have a bright future ahead of it.

And for the next $5,000 I would be looking at one of these top shares that have been beating the market.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. The Motley Fool Australia owns shares of Helloworld Limited. The Motley Fool Australia has recommended Domino's Pizza Enterprises 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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