How I'd invest $20k in ASX 200 shares in 2023 to aim for a million

Investing $20,000 each year could get you to the million dollar mark quicker than you think if all goes to plan.

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Key points

  • When I invest I only want the very best shares in my portfolio 
  • The two shares listed below tick a lot of boxes for me 
  • I think they would be great options for a long-term investment 

Yesterday I wrote about building a portfolio with the ultimate aim of growing its value to one million dollars. You can read about that here.

Part of this involves investing $20,000 into a handful of the very best ASX 200 shares each year.

If you do this and can achieve a return greater than the long-term market average, you could theoretically grow your portfolio to the $1 million mark in 15 years.

One thing I didn't include in that article was the ASX 200 shares that I would buy with this first $20,000 investment. So, let's do that now.

Here are two ASX 200 shares I would buy now:

CSL Limited (ASX: CSL)

I continue to believe that CSL is one of the highest-quality companies on the Australian share market. So, with the biotherapeutics giant's shares still trading at a decent discount to their pre-COVID high, I think it could be an opportune time to invest.

Particularly given CSL's increasingly positive outlook. The significant headwinds the company was facing with plasma collections during the pandemic have now eased, which is expected to be a big boost to its margins. Especially with the rollout of its new plasma collection technology, which has been designed to deliver greater plasma yields.

In addition, strong demand for immunoglobulins, the company's ongoing US$1 billion+ annual investment in research and development, and its blockbuster acquisition of Vifor Pharma appear supportive of solid growth over the coming years.

Xero Limited (ASX: XRO)

Another ASX 200 share that I would invest $20,000 into is Xero. It is a leading cloud-based accounting platform provider with 3.5 million subscribers globally.

While this is undoubtedly a large number of subscribers, it is still barely even scratching at the surface of its huge market opportunity. For example, Goldman Sachs estimates that Xero has a total addressable market of 100 million small to medium sized businesses globally.

And with the shift to the cloud still relatively early on and its platform highly regarded in the industry, Xero looks well-placed to capture a growing slice of its TAM over the next decade and beyond. I believe that this, combined with the growing revenue it earns from its app store, the stickiness of its platform, and periodic price increases, positions Xero to grow its earnings at a rapid rate over the remainder of the 2020s.

Motley Fool contributor James Mickleboro has positions in CSL and Xero. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Xero. The Motley Fool Australia has positions in and has recommended Xero. 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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