2020 has been a tough year to choose shares as a beginner investor. We had one of the worst S&P/ASX 200 Index (ASX: XJO) market crashes in history this year in March, followed by one of the strongest bull markets the ASX has seen. You might be painfully put off investing or delusionally exuberant in equal measure.
Rather than chasing ‘hot stocks’ like Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P), I think beginner investors are far better buying steady, long-term focused shares instead. These might not be as exciting as some other options on the ASX menu, but I think there’s less chance of getting heartburn all the same. On that note, here are some ASX shares I think are perfect for beginner investors to ‘cut their teeth’ on.
2 ASX shares perfect for beginners
Argo Investments Limited (ASX: ARG)
Argo is a listed investment company (LIC) that is one of the oldest on the ASX, having started life back in 1946. Since then, Argo has honed a reputation as a solid, reliable company with its shareholders’ interests at heart. It invests in a large and diversified portfolio of ASX blue chip shares and pays out a sturdy and substantial dividend. Some of its top holdings include CSL Limited (ASX: CSL), Macquarie Group Ltd (ASX: MQG), BHP Group Ltd (ASX: BHP) and Wesfarmers Ltd (ASX: WES). On current prices, Argo’s dividend equates to a trailing yield of 4%, or 5.71% grossed up with Argo’s full franking. With such a robust history, diversified portfolio and substantial dividend yield, I think Argo is a perfect share for a beginner in 2020.
2) iShares Global 100 ETF (ASX: IOO)
This exchange-traded fund (ETF) is another ASX investment that I think would make a perfect share for a beginner. Its premise is relatively simple: IOO holds 100 of the largest companies in the world, all hailing from advanced economies like the United States, Canada, the United Kingdom and Japan. Some of its top holdings include the FAANG stocks like Apple Inc. (NASDAQ: AAPL) and Amazon.com Inc. (NASDAQ: AMZN), as well as other famous names like Toyota, Nike Inc. (NYSE: NKE), Microsoft Corporation (NASDAQ: MSFT) and Nestle.
I think this ASX share is perfect for a beginner as it is highly diversified and only holds robust, large companies with global presences and powerful brands. IOO has returned an average of 13.1% per annum over the past 10 years and offers a trailing dividend yield of 1.47% as well.
Both of these shares, I believe, would make perfect shares for a beginner investor. Argo focuses exclusively on Australian shares, whereas IOO is a globally focused fund. You could choose your preference or hold both in your beginner portfolio with no trepidation at all, in my opinion.