If you are fortunate enough to have $10,000 sitting in your savings account, I would suggest you consider putting it to work in the share market.
After all, the potential returns on offer are vastly superior to the interest rates most bank accounts offer right now.
In addition to this, with the market down materially from its high because of the coronavirus pandemic, there are a lot of high quality companies trading at discounted prices.
But which shares should you buy? My money would be on one of these top shares:
a2 Milk Company Ltd (ASX: A2M)
I think this leading infant formula and fresh milk company would be a great option for a $10,000 investment. It has been growing its earnings at a very strong rate over the last few years thanks to the increasing demand for its infant formula in China and the expansion of its fresh milk footprint. This strong form has continued in FY 2020, with a2 Milk Company recently upgrading its guidance for the full year. The top end of its guidance range implies revenue growth of 34.1% and EBITDA growth of 35.4% year on year. The good news is that it still has a significant runway for growth and appears well-positioned to continue delivering above-average earnings growth over the next decade.
Appen Ltd (ASX: APX)
Another option for investors to consider buying is artificial intelligence company Appen. It uses a crowd-sourced team of over a million contractors to prepare data to be used in machine learning and artificial intelligence models. Many of the biggest tech companies in the world such as Facebook and Microsoft are customers, which I believe is a testament to the quality of its service. It has continued to perform positively despite the pandemic and recently reiterated its guidance for FY 2020. It is expecting underlying EBITDA in the range $125 million to $130 million, up 23.8% to 28.7% year on year. I expect more of the same over the coming years given the increasing importance of artificial intelligence for big business.
ResMed Inc. (ASX: RMD)
A final option to consider for the $10,000 investment is ResMed. It is a leading sleep treatment-focused medical device company with a world class portfolio of devices and software. While it is likely to experience a slowdown in demand during the pandemic, I expect it to rebound once the crisis passes. Especially given the hundreds of millions of people globally which are believed to be suffering from sleep apnoea but are not yet diagnosed.
