Starting your investing journey as a beginner can be difficult. You might have high expectations, perhaps after seeing a social media post about buying expensive cars with a month of day-trading profits. You might have heard how the whole thing is a giant casino, primed to rob the ordinary investor. Some investors do view the share market through these kinds of lenses, but it’s rarer than popular culture would have you believe.
I always think the best way to start investing is by selecting passive, managed investments that outsource the hard work for you. That way, you can begin to see the immediate benefits of holding a growth asset, without becoming disillusioned that your mate’s stock pick hasn’t doubled up by now. So here are 2 easy ASX shares that I think any aspiring investor can start out with today.
Magellan High Conviction Trust (ASX: MHH)
This investment is a listed investment trust (LIT), which basically means it’s a fund that invests in other shares for you. In this case, Magellan High Conviction Trust looks to hold around 8–12 ‘of the world’s best companies’. It primarily focuses on the US share market. Some of its recent holdings including Alphabet (owner of Google), Tencent Holdings, Facebook and Microsoft.
The flexibility of this LIT’s mandate, as well as its focus on the ‘best of the best’, makes this investment a great one for a beginner investor in my view. Its targeted 3% annual cash distribution is also a plus.
Australian Foundation Investment Co Ltd (ASX: AFI)
AFIC (as it’s easily known) is an old soul of the ASX, having been around since 1928. It’s a listed investment company (LIC), which is similar to a LIT, but with a slightly different legal structure. But it shares an LIT’s ability to act as an investor on your behalf buy buying and selling other shares.
AFIC has a reputation for conservative, long-term investing, particularly through ASX blue-chip shares. You’ll find most of the famous ASX blue chips in AFIC’s portfolio, including CSL Limited (ASX: CSL), Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP).
AFIC may not be the kind of high-risk investment that has the potential to make you rich overnight. But this is precisely why it’s a top choice for a beginner in my view. AFIC is also known for its robust, fully franked dividends. On current prices, you can expect a trailing dividend yield of 3.8% from this company.
In my view, either (or both) of these shares would make perfect investments for a beginner. AFIC is a domestically-focused company, whereas the Magellan High Conviction Trust looks overseas for its investments, so choose your preference!
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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, and Magellan High Conviction Trust. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares) and Facebook. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended Alphabet (A shares) and Facebook. 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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