Starting a portfolio of ASX 200 shares can be hard for a beginner investor. We Fools like to say that any new investor should aim to ramp to have at least 15 shares in their portfolios quickly as possible.
With this many investments, you can mitigate 'single-company' risk somewhat and start enjoying the benefits of a diversified portfolio. But which shares to choose?
Here's a list of 5 ASX shares from the S&P/ASX 200 Index (ASX: XJO) that I think would make a great foundation for any beginner portfolio.
Telstra Corporation Ltd (ASX: TLS)
Telstra is the largest telco on the ASX and a staple company for thousands of ASX investors. I like it for a beginner for its strong dividend and future 5G growth potential.
Commonwealth Bank of Australia (ASX: CBA)
Owning an ASX bank used to be some kind of 'rite of passage' for ASX 200 share investors. But 2020 has been a tough year for the banking sector and the banks don't elicit the same starry eyes as they used to.
Still, if you'd feel better with an ASX banking share in your portfolio, I think CBA is the pick of the bunch. It has managed to maintain a reasonable dividend this year and should recover in line with the broader economy over the next few years.
Wesfarmers Ltd (ASX: WES)
Wesfarmers is the largest conglomerates on the ASX and has a mindblowing portfolio of investments of its own. Not only does it own the Bunnings, Target, Kmart and Officeworks store chains, it also owns mines, chemical manufacturing facilities and a clothing line under its belt. Wesfarmers is a strong, stable company with a robust dividend and would not look out of place in any ASX portfolio in my view.
Woolworths Group Ltd (ASX: WOW)
Woolies should be familiar with most ASX investors. Not only does it own the eponymous supermarket chain, but Woolworths also owns a vast network of bottleshops and pubs, which include the Dan Murphy's and BWS outlets. I like Woolworths as a conservative and defensive investment, and so I think it would make a great share for a beginner portfolio.
BHP Group Ltd (ASX: BHP)
Normally, I'm not too wild on mining shares for a beginner. But BHP's proud history, massive size and diversified earnings base prompt me to make an exception. BHP has operations spanning coal, petroleum, copper and iron ore mining. The company is an ultra-low-cost producer, which means it stands to benefit if any of these commodities have a pricing boom. As such, I think the Big Australian is another great share to own in a diversified portfolio.
Foolish takeaway
I'm not saying these 5 ASX 200 shares are essential for a new portfolio, but I do think they are good places for a beginner to start with. You can choose all of them, some or none at all. As long as you aim to build up your portfolio with quality companies, you can't go wrong!
