The Motley Fool

3 investing picks for first time investors

Buying your first shares in quality, growing businesses is incredibly exciting!

If you’re starting out on your investment journey you have potentially decades ahead of you to grow and compound your wealth.

Time is a massive advantage when investing so even though you’ll probably be starting off a small amount to invest, starting early, investing regularly, and learning from any mistakes will help drive you towards your goals.

Though not technically a company, buying units in an exchange traded index tracking fund can be an excellent way to start and gain exposure to a large number of companies. These funds have a long history of outperforming actively managed investment funds and reduce the firm specific risk which comes with owning individual companies.

A fund like iShares Global Healthcare (ASX: IXJ) for example offers exposure to big names like Johnson & Johnson and Pfizer Inc and the long growth run-way that healthcare offers.

But there is still something special about owning a piece of a company directly and participating in the business as an investor. If you’re comfortable taking on the extra risk, here are two companies to consider buying today.

Ramsay Health Care Limited (ASX: RHC)

Ramsay Health Care is a big, geographically diverse hospital operator with operations in Australia, the UK and across Europe. This provides a level of diversification to the company’s revenues which can reduce the risk to earnings if there is a sudden drop from one country.

Ramsay Health Care has a strong history of growing revenue and I think it will be a clear beneficiary of the long-term trend of increasing healthcare spending going forward. It offers a dividend yield of 2.3% which, sure, is not earth-shattering, but it is a good starting point, adds some cash-flow to your pocket and I would expect this to grow over the years to come.

ResMed Inc. (CHESS) (ASX: RMD)

ResMed manufactures breathing assistance products and should also benefit from the trend of aging populations over the next decade. The company has steadily grown revenues over the last 10 years, and although a reasonably mature business, has a good return-on-equity and low debt. These are good signs a company is well set up to compound earnings to produce considerable cash flows over time.

It’s worth being aware that ResMed is primarily listed on the New York Stock Exchange, but is listed on the ASX as what is known as a Chess Depositary Instrument, or CDI. Ten CDIs on the ASX represent one share of common stock on the NYSE.

If you're looking for more investing ideas to get started, click here and find out about our top Blue Chip picks for 2019.

Our Top 3 Blue Chip Shares for 2019 – NOW AVAILABLE!

You’re invited! For a limited time, The Motley Fool Australia is giving away an urgent new investment report detailing our 3 TOP BLUE CHIP SHARES to own in 2019.

So if you like trustworthy, stable, high-performing companies that pay fat fully franked dividends – we’ve got you covered!

Stock #1 is a beloved old Australian company turning its attention to high-margin businesses... and rapidly returning cash to shareholders with its hefty dividend...

While Stock #2 is an online powerhouse that’s rapidly gaining market share all around the globe... poised for years (or even decades) of tremendous growth...

Even better, Stock #3 offers a whopping 6.5% grossed-up dividend! Which beats the rates on term deposits right out of the water – and offers the potential for capital gains, too.

You can discover all three shares inside our new report right now. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a LIMITED TIME ONLY!


Motley Fool contributor Regan Pearson has no position in any of the stocks mentioned.

You can follow him on Twitter @Regan_Invests.

The Motley Fool Australia has recommended Ramsay Health Care Limited and ResMed Inc. 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.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.