School-leaver to retiree: ASX stocks I'd buy for each age bracket

If life is a journey, here are the stocks I'd pick up along the way.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investing in ASX stocks makes a lot of sense for building wealth and perhaps creating a stream of passive income.

That said, certain investments may work better for some investors than others, depending on their age bracket.

I'm going to outline which type of ASX stocks I'd buy for each life stage, though there's one investment that could work for everyone.

School-leaver

Starting in the financial world can be daunting because of the array of different investment options.

A beginner investor doesn't need to go for the riskiest ASX stocks out there. It pays to note that good companies can deliver compelling compounding returns over the long term. I believe it's better to think of the ASX stock market as the ASX business market, because there are real companies behind each ticker code.

School leavers may be interested in companies that are committed to doing good in the world while still able to deliver capital growth.

BetaShares Global Sustainability Leaders ETF (ASX: ETHI) is an exchange-traded fund (ETF) that provides exposure to a global portfolio of companies that rank well on environmental, social and governance (ESG) factors.

Similarly, Betashares Climate Change Innovation ETF (ASX: ERTH) is an ETF invested in a portfolio of companies looking to help the world reduce energy and water usage, create circular economies (such as better recycling), or innovate for better transportation.

For an individual ASX stock, I like Volpara Health Technologies Ltd (ASX: VHT) an ESG B Corp-certified company that provides breast screening software and risk analysis for patients globally.

Full-time work

Once people enter full-time work earning regular income, they usually also enter a higher tax bracket. At this stage, I wouldn't suggest high-yield ASX dividend shares. As an alternative, I'd want to find investments that can deliver solid returns while also having lower dividend yields.

Betashares Nasdaq 100 ETF (ASX: NDQ) is an ASX ETF that invests in 100 of the biggest companies listed on the US NASDAQ with a demonstrated record of long-term capital growth. The fund is invested in names like Microsoft and Alphabet (Google).

Another ASX stock I particularly like is Johns Lyng Group Ltd (ASX: JLG). The company provides repair and restoration services after insurable events. It's seeing huge growth in its catastrophe division and I also like its expansion into strata services and home compliance (such as smoke alarm and electrical testing).

Mortgage, married, kids

At this age bracket, household income may be strong but expenditure is also high. I think it could make sense to invest in companies that are growing earnings over the long term, but also offer a solid (and growing) dividend that could help with household cash flow.

Wesfarmers Ltd (ASX: WES) is the company that owns Bunnings, Kmart, Officeworks, and more. It's also investing in areas like lithium and healthcare and offers investors a solid grossed-up dividend yield of 5.2%.

Another share I like is Lovisa Holdings Ltd (ASX: LOV), an affordable jewellery company that is expanding its store network globally and is regularly entering new countries. It has a trailing grossed-up dividend yield of 4.9%.

Retiree

Once someone has retired, they're in a much lower tax bracket and that means higher yield options and/or defensive shares make sense.

Charter Hall Long WALE REIT (ASX: CLW) is a real estate investment trust (REIT) that owns commercial property across Australia. It owns assets such as Bunnings Warehouse properties, service stations, industrial and logistics properties, and so on. According to the company's guidance, Charter Hall will pay a distribution yield of 7.8% in FY24 and has a weighted average lease expiry (WALE) of 11 years.

Sonic Healthcare Ltd (ASX: SHL) is an ASX healthcare share that provides pathology services in a number of countries. It's benefiting from Australia's growing and ageing population. Sonic has grown or maintained its dividend every year for decades (though there's no guarantee this will continue), and it has a grossed-up dividend yield of 5.1%.

One ASX stock for everyone

There's one name that could be good for everyone – the investment house Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). Its portfolio is diversified, defensive, growing, and the company has increased its annual ordinary dividend every year since 2000. It currently offers a trailing grossed-up dividend yield of 3.7%.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has positions in Johns Lyng Group, Lovisa, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, BetaShares Nasdaq 100 ETF, Johns Lyng Group, Lovisa, Microsoft, Volpara Health Technologies, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF, Volpara Health Technologies, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has recommended Alphabet, Johns Lyng Group, Lovisa, and Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Opinions

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Opinions

1 attractive ASX growth stock for 2024 and beyond

This business is building an exciting future.

Read more »

Young girl starting investing by putting a coin ion a piggybank while surrounded by her parents.
Investing Strategies

2 no-brainer ASX 'beginner' stocks I'd buy

These would make a great core for a starter portfolio, I think, but really that should also be positive for…

Read more »

A young woman wearing a silver bracelet raises her sunglasses in amazement, indicating positive share price movement in jewellery shares.
Investing Strategies

I'd need this many Lovisa shares to aim for passive income of $10k a year

The jewellery retailer is in a unique category in the ASX, so this is how you can take advantage to…

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Opinions

One ASX share to buy today to ride the 30% forecast surge in the S&P 500

If these experts have it right, the S&P 500 is set to continue rewarding investors with outsized gains.

Read more »

Woman relaxing on her phone on her couch, symbolising passive income.
Dividend Investing

$5k to invest buys me 700 shares in these 2 ASX stocks for a second income!

You don't need a lot of money to start a steady flow of cash flowing into your bank account.

Read more »

a man with a wide, eager smile on his face holds up three fingers.
Value Investing

3 Australian value stocks to buy right now

I think these stocks are capable of beating the market.

Read more »

A man eases back onto his sofa, happy with the relaxed vibe from his furniture.
Opinions

This is the best ASX share buy I've made in my superannuation fund

This stock has been an amazing investment so far.

Read more »

A young well-dressed couple at a luxury resort celebrate successful life choices.
Opinions

2 ASX shares under $50 new investors can buy confidently

I like these stocks for both growth and dividend potential.

Read more »