I think this is a great time for beginner investors to start investing because of the coronavirus bear market, with the share market already down 30%.
Some investors are fearful of what the coronavirus might do to economies this year. It could be quite painful in 2020.
But with shares, the only part we can control is the price we pay.
Imagine you’re looking to buy cereal from your local Coles Group Limited (ASX: COL) or Woolworths Group Ltd (ASX: WOW). You know you’re going to be buying cereal for years to come. Would you rather buy the cereal today at full price or at 25% off? The lower the price, the better it is for people wanting to buy.
That is what investors are facing at the moment. Depending on the day you read this the S&P/ASX 200 Index (ASX: XJO) may have fallen 25%, 30% or some other painful number in a short amount of time.
I know we’d rather buy things at half price at the supermarket if possible, but the coronavirus share declines would have to be among the worst ever if they fell 50% or more.
What shares would be good for a beginner?
Lots of people suggest starting with exchange-traded funds (ETFs), which allows you to invest in a group of businesses with just a single investment for a low cost. So you could go for the ASX-focused BetaShares Australia 200 ETF (ASX: A200) or the American iShares S&P 500 ETF (ASX: IVV) which has lots of global leaders in the holdings.
You could go for a great listed investment company (LIC) where a fund manager, or managers, takes care of the investing for you. Two examples are Magellan High Conviction Trust (ASX: MHH) and MFF Capital Investments Ltd (ASX: MFF).
Or you could start with some of the best shares on the ASX. I think Altium Limited (ASX: ALU) is a great business at a great price. But Altium isn’t the only one out there.
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Motley Fool contributor Tristan Harrison owns shares of Altium and Magellan Flagship Fund Ltd. The Motley Fool Australia owns shares of Altium. 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.