Shares for beginners… it’s not as easy as it sounds. There are literally thousands of shares on the ASX and tens of thousands of shares around the world to choose from. Thus, it’s easy for a beginner investor to be overwhelmed with choice or paralysed with indecision if they are just starting out on their investing journey. That’s why I’ve found 2 ASX shares today that I think are perfect for a beginner investor. I’ll lay out why below.
2 ASX shares perfect for beginner investors
1) Woolworths Group Ltd (ASX: WOW)
Our first share for beginners is a company everyone would be familiar with – Woolies, you know, the fresh food people one. I’ve chosen Woolworths, not for its growth potential or ‘shoot the moon’ possible returns. Far from it. Woolies is a steady, mature, dividend-paying business that is probably unlikely (in my view anyway) to significantly outperform the market over the long term.
Saying that, I still think it’s a good choice for a starter investor. It’s relatively easy to understand as a business, and it’s easy to go and visit a Woolies store and get a feel for how ‘your company’ works and how it makes money — invaluable experience for a beginner in my view. As mentioned earlier, you’ll also get a biannual dividend, which on current prices signals a yield of around 2.57%. I think Woolies is a company you can comfortably buy to get a handle on investing, and leave in the bottom drawer.
2) Magellan Global Trust (ASX: MGG)
Our second share today is this listed investment trust (LIT) from Magellan Financial Group Ltd (ASX: MFG). Magellan has steadily built a reputation as one of the best global fund managers in Australia. The Global Trust is designed so you as the investor don’t really have to do anything apart from buy the shares. A management team picks the actual shares held within the trust for you and buys and sells them on your behalf.
MGG focuses on a well-diversified portfolio of global companies. As of 31 July, some of the companies it currently holds include Microsoft Corporation (NASDAQ: MSFT), Facebook Inc (NASDAQ: FB), Visa Inc (NYSE: V) and Tencent Holdings (OTCMKTS: TCEHY). MGG also aims to pay a cash distribution of 4% annually, which you can choose to reinvest at a 5% discount. All in all, I think this LIT is a top choice for a beginner. And just like Woolies, I think you can easily put MGG in the bottom drawer and forget about it if you so wish.
Where to invest $1,000 right now
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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, 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 Facebook and Visa. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook, Microsoft, and Visa and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool Australia has recommended 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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