2 ASX bear market shares for beginners

Here are 2 ASX shares I think would be perfect for a beginner portfolio if we enter another ASX bear market.

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For anyone who is looking to start an investing career during this difficult time, it will no doubt be a very scary experience. A month ago, the share market was at ‘carnage’ point, and now we are officially in bull market territory once more (as we are more than 20% from the March lows).

This might be confusing for a beginner – the coronavirus hasn’t gone away and we’re still very much in economic lockdown.

The stock market might go higher from here, or it might go lower and enter bear market territory once more.

Frankly, no one knows.

What we do know is that long-term investing into good-quality ASX shares in a bull market is a good idea – and a great one in a bear market!

So with that in mind, here are two ASX shares I would buy in a starter ASX portfolio!

Magellan Global Trust (ASX: MGG)

Magellan Global Trust is what’s known as a Listed Investment Trust (LIT). That means it’s really a fund that holds many different companies within it. This is managed by Magellan Financial Group Ltd (ASX: MFG) on investors’ behalf, you don’t have to do anything once you buy the shares! MGG aims to hold a selection of the “world’s best shares”. Some of its current holdings you will probably know – such as Facebook, Microsoft, Mastercard and Alphabet (Google).

In this way, I think this is a perfect investment for a beginner. You are getting some of the most recognisable and successful companies in the world all in one share. Magellan Global Trust also aims to pay a 4% annual distribution, which is a handy stream of passive income as well.

Argo Investments Limited (ASX: ARG)

Argo is ASX royalty. It’s a Listed Investment Company (LIC) that’s been around since 1946 – and was once even chaired by the legendary cricketer Sir Donald Bradman. As a LIC, Argo operates in a similar fashion to Magellan Global Trust. It invests in companies on investors’ behalf without any active involvement necessary from its investors.

However, Argo differs from Magellan Global Trust in the kinds of shares it invests in – sticking mostly to more conservative companies listed in Australia. It holds around 100 Aussie shares, which include everything from the ‘big four’ banks like Commonwealth Bank of Australia (ASX: CBA) to Bunnings-owner Wesfarmers Ltd (ASX: WES) and the ever-present Telstra Corporation Ltd (ASX: TLS).

Argo is known for its robust dividend payments, which come with full franking credits. On current prices, Argo is offering a trailing dividend yield of 4.57% (although we might see this dip in 2020). Because of its passive nature, long history and wide exposure to ASX shares, I think Argo would also be a great choice for a beginner portfolio today.

Wondering where you should invest $1,000 right now?

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*Returns as of May 24th 2021

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 Alphabet (A shares), Facebook, Mastercard, and Telstra Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Facebook, and Mastercard. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Alphabet (A shares), Facebook, and Mastercard. 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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