I think there are some great-looking opportunities on the ASX share market this month. If I had $5,000 to invest into some ASX shares, there are some investments I’d choose for the long term.
While some investors may be fearful of volatility, I think there are advantages to investing at times like this. The most obvious one is that investors can buy businesses at lower prices. I like the sound of that.
In my opinion, choosing a good investment at a good price can lead to good returns over time. You never know what share prices are going to do next, but I want to jump on the opportunities when I see them.
With that in mind, I would spend $5,000 like this:
VanEck Morningstar Wide Moat ETF (ASX: MOAT) — $2,500
This is an exchange-traded fund (ETF) that is based on investing in US businesses that are deemed to have competitive advantages — or ‘economic moats’ — that are likely to last for many years into the future.
Economic moats can come in many different forms such as intellectual property, brand power, cost advantages, and so on.
Businesses are only chosen for this ETF’s portfolio if Morningstar analysts believe the economic moat will stay strong for at least the next decade and, more likely than not, the second decade as well.
On top of that, businesses are only picked for the portfolio if they are good value compared to Morningstar’s estimate of fair value.
At the latest disclosure, these are some of the biggest positions in the portfolio: Lockheed Martin, Bristol-Myers Squibb, Altria, Dominion Energy, and Berkshire Hathaway.
I like the idea of this ETF because of the quality across the board that it offers. It also seems to be consistently invested in businesses that are good value because the portfolio changes to the next opportunities.
Lovisa Holdings Ltd (ASX: LOV) – $1,500
Lovisa is a fast-growing ASX share that sells affordable jewellery in multiple countries. The USA is a particularly promising market for the company, which is why it’s working on expanding its store network there.
The business appears to be very scalable, which bodes well for future profitability. In the FY22 half-year result, Lovisa reported that it grew its revenue by 48.3%, while net profit after tax (NPAT) increased by 70.3%.
I think that this ASX share has a compelling future under the new management. There are plenty of other regions that Lovisa can expand to, such as countries in Asia, which will lengthen its growth runway.
Another benefit to the company is that it pays dividends, so shareholders are getting the benefit of the profit generated in the form of cash returns.
I think this ASX share can achieve good compounding for years to come.
Sonic Healthcare Limited (ASX: SHL) – $1,000
Sonic Healthcare is a leading company in the pathology sector. It generates profit from Australia, Europe, and the US – it’s globally diversified.
The company benefits from long-term trends such as aging demographics. This is helping it achieve steadily-rising revenue and profit. I like that the business is quite defensive – people need healthcare whether the economy is booming or stuttering.
Sonic Healthcare is also benefiting from the ongoing level of COVID-19 testing. It has been an important player in helping slow the spread of the pandemic. It has made plenty of cash flow from testing, which the company has been putting towards acquisitions to boost long-term earnings. Canberra Imaging is one example of a recent acquisition.
I’m attracted to the ASX share’s long-term future, even if it hasn’t fallen as much as some other ASX shares in 2022.