With the ASX up more than 10% since the lows of December 2018, now could be a good time to buy ASX shares.
The US Federal Reserve seemingly signalling that it is much closer to the neutral interest rate means less hikes in the short-term. This makes the share market seem more attractive, which is one of the reasons why I'd consider buying the below four ASX shares with $10,000:
Challenger Ltd (ASX: CGF)
Financials business Challenger is one of the ASX shares most connected to interest rate moves. Not only does it have a huge balance sheet that is affected by interest rates, but demand for its main product – annuities – could also change depending what interest rates do.
The Challenger share price has fallen significantly in recent months, which hopefully means that longer-term returns will be amplified due to the lower starting share price.
According to demographic projections, the number of people over 65 is expected to grow by more than 40% over the next decade. Changes to franking credits and negative gearing could also increase the attractiveness of Challenger. The rising superannuation pool of money should be a good tailwind too.
It's currently trading with a grossed-up dividend yield of 6.4%.
Costa Group Holdings Ltd (ASX: CGC)
Costa is one of the largest food-producing businesses in Australia with its avocado, tomato, citrus, mushroom and berry segments.
There are several long-term factors that make me confident about Costa including changing food habits, increasing international demand for Australian produce, a growing population and significant expansion plans.
However, in the shorter-term, Costa said again today that calendar year 2019 profit is likely to grow by "at least" 30% and it also said that during February it experienced solid price recovery.
It's trading with a grossed-up dividend yield of 3.5%.
Vanguard FTSE Asia Ex Japan Shares Index ETF (ASX: VAE)
Both China and India are very large long-term opportunities if the economic growth of the countries flows through to the listed businesses in those countries, as well as to the citizens.
Just think how much economic value has been added to the US over the past 40 years, which benefited its businesses enormously. Many 'middle class' service businesses in Asia could grow significantly such as transportation, tourism, insurance and so on.
Not only is this ETF trading with a cheap price/earnings ratio of 12x, but as a broad index it has high earnings growth rate of 11.5% too.
Plus, it has a decent dividend yield of 2.7%.
WAM Microcap Limited (ASX: WMI)
One of the best ways to beat the market over the long-term could be investing in the small cap space. The problem is that it's the riskiest area too due to governance and other issues, which is why small cap investing could be best left to people looking at them full-time.
In its short listed life WAM Microcap has outperformed the market by a sizeable amount. I would like to increase my holding as time goes on, although there will be some years where the small cap space could be hurt more than blue chip shares.
It currently has a grossed-up dividend yield of 4.8%.
Foolish takeaway
I think all of these shares have the potential to beat the ASX index return, which is why I already own all of them in my portfolio and I want to buy more. At the current prices I would go for Vanguard Asia ETF and WAM Microcap for the diversification.
