Recommending ASX shares to a beginner is a tough ask. Whilst I have enormous confidence in the two investments named below, investing is always uncertain. I doubt it, but for all I know, the two shares below could wind up being terrible investments over the next few years, as could any share I could possibly name.
But good investing is all about balancing risk and reward. And not investing at all is both far riskier and less rewarding than giving investing a crack, in my opinion. And so here are the two aforementioned ASX shares that I think have more than a reasonable chance of being great investments over the coming years for a beginner today:
2 ASX shares for a beginner today
BetaShares Nasdaq 100 ETF (ASX: NDQ)
This exchange-traded fund (ETF) is a great choice for a beginner in my view for two reasons. Firstly, as an ETF, this investment requires very little attention or even understanding. It simply holds the 100 largest companies in the United States Nasdaq Index, adjusted as needed. That means this fund will always be holding the 100 largest companies in the index, whatever they may be at any given time. I believe this means that you can buy-and-hold this ETF forever, without ever having to check it or worry about it. That’s great for a beginner.
Secondly, the Nasdaq is the US index that most tech shares find themselves listing on. As such, its current top holdings are well-known tech names like Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT) and Amazon.com Inc (NASDAQ: AMZN). But it also houses many up-and-coming growth companies like NVIDIA Corporation (NASDAQ: NVDA), PayPal Holdings Inc (NASDAQ: PYPL) and Tesla Inc (NASDAQ: TSLA). I think these companies will continue to grow over time and increase their weighting in this index. As such, this ETF is really a big bet on US tech, whose future I think is a great investment.
BHP Group Ltd (ASX: BHP)
My second ASX share for beginners is a completely different kettle of fish. BHP is one of the oldest and most famous companies on the ASX. It’s one of the largest mining companies in the world, with significant operations across four core commodities: coal, copper, oil and iron ore. BHP is a very ‘old-world’ company. Even so, I think it’s a great share for a beginner. You’ll often hear from many older Aussie investors that their first share was ‘the BHP’.
Quite simply, BHP has been around so long (and will continue to be in my view) because it mines commodities that the world can’t live without. Almost every building needs steel and almost every electrical device on the planet needs copper. That isn’t going to change in any of our lifetimes, in my opinion. This company won’t make you rich quickly. But it’s another great ‘bottom draw’ investment that I think a new investor could hold for a lifetime.
These 3 stocks could be the next big movers in 2020
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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. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Apple, Microsoft, NVIDIA, PayPal Holdings, and Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended Amazon, Apple, BETANASDAQ ETF UNITS, NVIDIA, and PayPal Holdings. 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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