If you have $1,000 sitting in a savings account and no near-term plans for it, I would recommend you consider investing it into the share market.
This is because the potential returns on offer from the share market are vastly superior to the interest rates you'll receive from the big four banks.
But where should you invest these funds? Two top ASX shares that I think could generate very strong returns for investors over the next decade are listed below. Here's why I would invest $1,000 into them:
a2 Milk Company Ltd (ASX: A2M)
Given the sharp pullback in the a2 Milk share price this week, I think now could be an opportune time to invest with a long term view. Just as I warned could be the case here recently, a2 Milk has been struggling during the early stages of FY 2021 due to a combination of factors. In light of this, it expects its first half sales to be lower year on year.
While this is disappointing, management appears confident that it is a temporary headwind caused by the pandemic. In light of this, I think investors should be looking beyond this short term weakness and focus instead on its very positive long term outlook. This is thanks to its relatively small market share in China, differentiated brand, and opportunities to accelerate its growth through acquisitions.
IDP Education Ltd (ASX: IEL)
Another option to consider investing $1,000 into is IDP Education. It is a leading provider of international student placement services and English language testing services. As you might have expected, IDP Education has been impacted by the pandemic. But perhaps not as much as you might expect.
It was still able to deliver strong profit growth in FY 2020 despite the crisis. And while trading conditions will be tough in FY 2021 and are likely to remain subdued until the crisis passes, I think it is worth looking to the future. Thanks to its robust balance sheet and strengthening market position, I expect IDP Education to come out the pandemic a stronger business. This could make it a great buy and hold option for investors.
