Even the greatest investors of all time like Warren Buffett and Peter Lynch had to start somewhere. Taking that first plunge in the markets can be intimidating, but imagine what the investing world would look like if Warren Buffett had never mustered the courage?
Just thinking about investing is a step that many Australians aren’t at yet, so there is already a victory at hand for anyone reading this article.
But the next step is equally important.
So here are 2 ASX shares I think would make fantastic first shares for any beginner investors out there looking at building a starter portfolio.
Magellan Global Trust (ASX: MGG)
This stock is actually a listed investment trust (LIT), but in simple terms that just means you’re buying into a basket of shares. This basket is picked by Magellan Financial Group Ltd (ASX: MFG), an investment company that has been making headlines this year after an extremely successful period of outperformance. Magellan holds between 15 and 35 companies from around the world that it thinks are the best possible investments out there. Currently, these include tech stocks Microsoft, Alphabet (Google) and Facebook as well as Chinese e-commerce giant Alibaba, coffee king Starbucks and payment behemoths Mastercard and Visa, among others.
Because you’re effectively paying Magellan to invest your money on your behalf, I think MGG is a great option for a first investment and a strong foundation for any portfolio.
Woolworths Group Ltd (ASX: WOW)
I’ve thrown Woolworths in because I think almost any Australian out there would be very familiar with what Woolworths is and would likely have experience shopping at a Woolworths supermarket, Big W store or Dan Murphy’s or BWS bottle shop. When you’re buying shares of a company, you are effectively buying a sliver of ownership in that business – and being familiar with ‘your company’ is a great way to think about investing.
Because the company sells alcohol, discount household items, groceries and other consumer essentials like dishwashing liquid, matches, washing powder and toothpaste, many investors would call Woolworths a defensive or ‘slow and steady’ investment – which makes it a good candidate for a first share in my view. Woolworths also pays a decent 2.75% dividend (on current prices) as well, giving you a handy stream of passive income on the side!
With these 2 stocks, you have a choice between a famous ASX blue-chip company and a managed investment that allows you to invest in some of the best companies from around the world – both great options in my view. Getting started in investing can be hard, but your future self will be grateful that you did!
Where to invest $1,000 right now
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Sebastian Bowen owns shares of Facebook. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook. The Motley Fool Australia has recommended Facebook. 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.
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