I always say that the hardest part of starting an ASX share portfolio is actually deciding to do it in the first place. Outside the world of investing, the share market is a widely misunderstood and even ridiculed institution. Overcoming these perceptions and deciding to join this wonderful journey is a great achievement in itself.
But perhaps the second most difficult hurdle to overcome is deciding which ASX share to buy for your first investment. There are literally hundreds (if not thousands) of options out there, and you will likely hear a different recommendation from everyone you ask.
But to perhaps add to this statistic, here are 2 ASX shares I would recommend to a beginner today.
iShares Global 100 ETF (ASX: IOO)
This share isn’t a company, it’s actually a collection of companies, organised in a fund known as an ETF (or exchange traded fund). More specifically, this ETF tracks 100 of the largest companies in the world (not just Australia). So by buying shares in this fund, you are really buying shares (by extension) in companies like Nike, Apple, Toyota, Microsoft and Alphabet (Google).
I like IOO for this easy-to-understand structure and its diversification (it gives you exposure to around 10 different countries). Therefore, I think this ETF would make a great ‘first ASX share’.
BetaShares Nasdaq 100 ETF (ASX: NDQ)
This is another ETF – but one that invests only in US companies. The Nasdaq is a US stock exchange that has more of a tech-heavy focus. If you’re a young investor, you might find this very appealing. Stocks like Microsoft, Amazon, Facebook, Tesla, Adobe and Netflix are some of the Nasdaq’s largest holdings – I’m sure you’ll have heard of at least a few of those names!
These kinds of companies are some of the largest disruptors in the global economy today, and I’m fairly confident they’ll be around for many years (if not decades) to come. Therefore, I think this is a great investment for your first stock and it’s one that I don’t think you’ll ever really need to sell.
Both of these ETFs are great candidates (in my opinion) for a first investment on the ASX. Both offer global exposure, lots of diversification and are very passive, which means you don’t have to do too much after buying them – just sit back and watch the magic of compound interest do its thing!