With the cash rate now being tipped to go lower before it goes higher, if I had $5,000 sitting in a bank account I would consider putting it to work in the share market.
Three shares that I would consider investing these funds into are listed below. Here's why I think they could generate strong returns for investors over the coming years:
Australia and New Zealand Banking Group (ASX: ANZ)
ANZ is my favourite of the big four banks at this point. I'm a big fan of the banking giant after it simplified its business by offloading a collection of non-core assets. This has left the bank with a strong capital position and will allow it to focus on its strengths. In addition to this, with its shares trading on lower than average multiples, I believe they offer a compelling risk/reward at this level for patient investors. Another bonus is that they provide a trailing fully franked 5.8% dividend yield currently.
REA Group Limited (ASX: REA)
Considering the weakness in the property market at the moment, you might think REA Group would be a share to avoid. However, the property listings company behind the realestate.com.au website has demonstrated the resilience of its business model in FY 2019 by delivering a strong half year result. In the first half the company grew its revenue by 15% to $469.2 million, EBITDA by 19% to $289.1 million, and net profit by 20% to $176.6 million. When trading conditions finally ease, I believe its earnings growth could accelerate rapidly.
ResMed Inc (ASX: RMD)
Another top option for that $5,000 investment could be this sleep treatment-focused medical device company. This is especially the case after its shares pulled back materially following a softer than expected second quarter result. ResMed's shares are currently trading around 15% lower than their 52-week high and at a level that I believe is very attractive for a long-term investment given its solid growth prospects as a leader in a sleep treatment market tipped to grow strongly over the next decade.
