S&P/ASX 200 Index (ASX: XJO) investors in their 30s have a long time until retirement. They can look to buy cheap ASX shares to build wealth. With that said, many are starting families and getting mortgages. With strong income earning potential, this group of investors is, in theory, in the prime position to continue to invest in growth stocks to outperform the share market.
ASX investors in their 30s
As investors, we’re a motley crew. We all have motley goals, motley resources, and motley risk appetite. Because of this, it is important to understand your own personal circumstances and invest accordingly. Whether you are just starting out investing, or have been investing for over a decade, these stocks could be great long term buy and hold investments for your portfolio.
3 “cheap” ASX 200 shares to buy now
Altium Ltd (ASX: ALU)
None of the stocks in this article are cheap by traditional metrics but I believe they will be in the future. Printed circuit board software company Altium current trades at around 58x earnings and pays a dividend on a yield of just 1.1%.
However, there is a reason that Altium is my top ASX dividend stock for July. Altium has been able to grow earnings at an impressive rate and this has allowed the company to increase its dividend at a compound annual growth rate of nearly 19% per annum since FY15. I expect this strong earnings growth to continue for the medium to long term, allowing for outsized total returns.
Xero Limited (ASX: XRO)
Outside of my Motley Fool writing, I’m a tax accountant. I’ve been using Xero to help my clients for years. It’s a great example of how you can find great investment ideas, within your circle of competence, in your own life.
I really don’t know why I didn’t buy the stock sooner! Xero has a great product which is predominantly in Australia and New Zealand, but which is growing in the UK and US. Internationally there is a trend towards more timely digital reporting for both tax and accounting. As a result, I feel Xero has a long runway for growth.
Aristocrat Leisure Limited (ASX: ALL)
Aristocrat operates a gaming business made up of both traditional physical poker machines, as well as a growing digital casino and social games business. The company has made some notable acquisitions in recent years, as it has moved more towards the higher-margin online gaming business. Although acquisitions are hard to pull off for either valuation or business reasons, so far Aristocrat has done a decent job.
Although casinos have been closed recently, over the long term I expect Aristocrat to continue to grow steadily in its massive total addressable market. With the Aristocrat share price at a 35% discount to February highs, I think now is a great time to buy.
Foolish bottom line
These ASX 200 growth shares are slowly maturing, having reached profitability. In my view, they are still small enough, in large enough addressable markets, to continue growing (and compounding) for years.
These 3 stocks could be the next big movers in 2020
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In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
*Returns as of 6/8/2020
Lloyd Prout owns shares of Altium, Aristocrat Leisure and Xero Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Altium and Xero. The Motley Fool Australia has no position in any of the stocks mentioned. 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.