When you first start investing you may not have a lot of money to put into the share market. But I wouldn't let that put you off. After all, even an investment of $1,000 has the potential to grow materially over the long-term.
For example, over the last 30 years the Australian share market has provided investors with an average total return of ~9.5% per annum.
This means that if you'd invested $1,000 per year in the share market and earned the market return, your investments would be worth almost $165,000 today. I believe this demonstrates why investing even a small amount each year can be very rewarding.
With that in mind, here are three shares which I think would be great options for a $1,000 investment in December.
a2 Milk Company Ltd (ASX: A2M)
I think it would be worth considering an investment of $1,000 in this infant formula and fresh milk company. This is because of a2 Milk Company's strong long term growth potential thanks to the increasing demand for its infant formula in the massive China market. In addition to this, supporting its growth has been the expansion of its fresh milk footprint in the United States. Combined, I believe it is well-placed to grow its earnings at an above-average rate for the next decade.
Afterpay Touch Group Ltd (ASX: APT)
Another quality option for that $1,000 investment could be Afterpay. I have been very impressed at the way the company's buy now pay later platform has penetrated the United States and UK markets. This has led to Afterpay generating explosive underlying sales growth in FY 2019 and so far in FY 2020. Another positive has been the improving trends the company has experienced in respect to bad debts and repeat use. I expect more of the same in 2020 and beyond, potentially making Afterpay a great buy and hold option.
Xero Limited (ASX: XRO)
Xero is a leading cloud-based business and accounting software provider which I feel could be a great investment option. Thanks to the quality of its product and the shift to online accounting, Xero has been growing at a very strong rate. For example, in the first half of FY 2020 the company reported a 30% jump in its annualised monthly recurring revenue to NZ$764.1 million. It also revealed that it has surpassed 2 million subscribers. Whilst this is clearly a large number, it is still only scratching at the surface of an enormous global market opportunity. I'm confident there will be further strong growth over the next decade, potentially making Xero a fantastic long term option.
