Getting started with investing, much like going to the dentist, has to be one of the most ‘put-off’ activities around. It’s always easier to think – “I’ve got years before I need to worry about that’ or “I just work to travel, I’ll invest when I’m old”.
But if you follow this short-sighted path, you’ll miss out on years of magic in the form of compound interest. It’s far more beneficial to just start with a small investment and slowly add to it over time, even if investing isn’t your number one priority.
So here are 2 easy ASX shares that I think would be great candidates for doing just that.
Magellan High Conviction Trust (ASX: MHH)
This listed investment trust (LIT) is only a week old, but I think it could still be a great choice for a starting investment. MHH aims to invest in a concentrated portfolio of 8–12 of Magellan’s best stock ideas, which currently includes Microsoft, Apple and Facebook.
Although this LIT has a ‘high-risk, high-return’ investing philosophy, I think it makes it perfect for young investors in particular, who can ride out any down years and benefit from MHH’s long-term growth horizon.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
I think one of the best ways to convince new investors of the benefits to owning shares is through dividends. Who wouldn’t like the sight of passive income hitting their bank accounts after all?
VHY is an exchange traded fund (ETF) that focuses on the highest-yielding ASX dividend shares on the market. It currently holds 60 stocks, including Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP). With a current yield of 5.3%, I think VHY a great first investment that you never have to sell!
I think we have 2 stocks here that would be perfect for a beginner investor’s starter portfolio. Both are managed investments, which means the stock picking is done by someone else (so no pressure) and both are run by reputable companies. What more could you ask for?
These 3 stocks could be the next big movers in 2020
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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 and Magellan High Conviction Trust. 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.