With the cash rate tipped to go lower before it eventually 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:
Altium Limited (ASX: ALU)
A great place to invest that $5,000 with a long term view could be this design software company. I believe Altium is well-positioned for strong growth over the next decade thanks to its exposure to the Internet of Things boom. As connected devices predominantly have printed circuit boards (PCB) inside them, I expect demand for the company's PCB design software to grow strongly over the foreseeable future and underpin above-average profit growth. Management appears to agree with this view. It recently set itself an aspirational revenue target of US$500 million by 2025. This is a 150% increase on its 2020 revenue target of US$200 million.
Cochlear Limited (ASX: COH)
Cochlear is hearing solutions company manufacturing and distributing cochlear implantable devices globally. Due to the quality of its products and its global distribution network, I believe it is well-positioned to benefit from the ageing population tailwind. According to the World Health Organization, by 2050 the world's population aged 60 years and older is expected to total 2 billion. This is an increase from approximately 900 million in 2015.
REA Group Limited (ASX: REA)
I've been very impressed with the resilience of the REA Group business model and feel it demonstrates why it would be a great long-term investment. Despite trading conditions being tough for this property listings company due to the housing market downturn and the upcoming election, it has still continued its strong growth in FY 2019. In the first half of FY 2019 the company delivered a 15% increase in revenue to $469.2 million and a 20% lift in net profit to $289.1 million. When the housing market rebounds and trading conditions finally ease, I believe its earnings growth could accelerate rapidly.
