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

While $5,000 might not sound like it could be a life-changing amount of money to invest, if you can afford to invest this sum of money on an annual basis for an extended period it certainly could be.

According to Fidelity, the local share market has provided an average annual return of 9.8% over the last three decades.

This means that if you had invested $5,000 each year over the last 30 years it would have grown to be worth just short of $875,000 today. Two years later, if the returns stayed the same, this figure would have made you a millionaire with a small fortune of approximately $1,065,000.

While there is no guarantee that the market will provide the same level of return over the next three decades, I’m optimistic that it will.

With that in mind, here are two shares which I think could provide market-beating returns over the long term:

CSL Limited (ASX: CSL)

CSL is a global biotech company which I believe is one of the best buy and hold investment options on the Australian market. This high-quality company has been a consistently strong performer over the long term and shows no signs of breaking the trend in the near future. During August the company reported its full year results and posted a 15% increase in revenue to US$7.6 billion and a 29% jump in net profit after tax to US$1.73 billion. Management appears confident that its positive performance will continue in FY 2019 and has provided guidance of net profit after tax in the range of US$1,880 million to US$1,950 million.

Xero Limited (ASX: XRO)

Xero is an accounting software company growing at an impressively strong rate thanks to the increasing popularity of its high-quality product. At the last count there were 1.4 million users of its software, putting the company on an annualised monthly recurring revenue (AMRR) of $484.4 million. These subscriber numbers could be given a major lift if it can successfully penetrate the massive U.S. market. While progress has been slower than many had expected, I believe in time it will carve out a meaningful slice of the lucrative market. I think Xero is a standout pick in the industry and a far better option than rivals MYOB Group Ltd (ASX: MYO) and Reckon Limited (ASX: RKN).

Looking for more shares to invest that $5,000 into? Then don't miss out on these blue chip stars.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Xero. 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.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!