If I had $10,000 to spend, I would, without hesitation, plough it into ASX shares (perhaps some international shares as well). We are in a period of record low interest rates, and I’m that kind of finance nerd that hates seeing my cash going backwards in a bank account. Therefore, the only solution that I can see is investing in growth assets like shares. It’s one of the best ways, in my view, to have your money working for you and making even more money over time.
So here are the 2 cheap ASX shares that I would stick 10 grand into if it happened to fall into my bank account today.
BetaShares FTSE 100 ETF (ASX: F100)
This share is actually an exchange-traded fund (ETF), a fund that in this case holds the 100 largest companies that list on the London Stock Exchange. These companies are rarely found in your typical ASX investors’ portfolio. Aussies tend to stick with ASX shares most of the time, with perhaps some American shares on the side. But Britain is home to some top global companies as well, and their FTSE index (the equivalent to our own S&P/ASX 200 Index (ASX: XJO)) has quite a different tilting.
Whereas the ASX 200’s top companies are dominated by banks and miners, the FTSE is instead dominated by pharmaceutical companies and consumer staples. Some of the top holdings in F100 include pharma-giants AstraZeneca and GlaxoSmithKline, ‘sin stocks’ British American Tobacco and Diageo, and household essentials manufacturers Unilever and Reckitt Benckiser.
I think these companies would be a welcome addition to most ASX investors’ portfolios and the F100 ETF is a perfect means to this end. Like the ASX, the FTSE is also an income-heavy index, with F100 units offering a trailing dividend/distribution yield of 4.55% at the time of writing. Since F100 units are still around 23% below where they started the year, I think this share is a great buying opportunity today.
Brickworks Limited (ASX: BKW)
Brickworks is the second ASX share I would happily spend $10,000 on today. It’s a solid and diversified ASX blue chip share with an enviable history of paying dividends. Unlike most ASX 200 blue chips, Brickworks has increased its dividend in 2020, paying a 20 cents per share interim dividend in May, which was up from 19 cents in 2019. This continues a pattern that Brickworks established in 2014 of annual dividend increases.
But I also like this company for its diverse earnings base. Brickworks (as you might have guessed) has its primary business in manufacturing building materials such as … bricks. But it also has a couple of ‘side hustles’ which help augment its cyclical primary earnings base. it owns a network of industrial properties which it rents out in various arrangements, including one recent partnership with US giant Amazon.com, Inc. (NASDAQ: AMZN). It also owns a large stake in Washington H. Soul Pattinson & Co Ltd (ASX: SOL), which is a diversified conglomerate in itself.
These ‘side hustles’ help strengthen Brickworks as a company, and I think this is one of the few true ‘bottom drawer’ companies that you can buy today. Its share price is also looking attractive right now in the $18 range, where I would happily initiate a position.
Where to invest $1,000 right now
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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Amazon. 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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