Sitting on cash? These 3 ASX shares could be great buys

Against shares, cash is still trash in my view…

| More on:
A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.

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

Are you sitting on a heap of cash right now? If you are, that's understandable. Holding cash as opposed to ASX shares in the current interest rate environment is a whole lot more attractive than it used to be.

The safety of a savings account, term deposit or mortgage offset account becomes very appealing when interest rates above 5% are on the table. Or mortgage rates over 6%.

But I still think ASX shares are a better investment, regardless of interest rates. As our chief investment officer, Scott Phillips discussed a few months ago, ASX shares have proven to be a vastly superior asset class compared to cash. That's in terms of long-term performance over the past three decades.

So with that in mind, here are three ASX shares that I think you'd be better off putting your money in today.

3 ASX shares that I think will trash cash

Washington H. Soul Pattinson and Co Ltd (ASX: SOL)

Investment house Soul Patts is first up. This is a company that functions as a vehicle for shareholders, owning and running a large portfolio of underlying assets on investors' behalf. This strategy already makes Soul Patts a highly diversified investment. But the company has a performance record to back it up too.

Just today (during the company's annual general meeting), Soul Patts confirmed that investors have enjoyed an average return of 12.5% per annum over the past 20 years (including the reinvestment of dividends). That looks pretty good against the returns of cash right now.

Speaking of dividends, Soul Patts also boasts the ASX's most impressive dividend track record. It has given shareholders an annual dividend pay rise every single year since 2000.

Enough said.

BetaShares Global Cybersecurity ETF (ASX: HACK)

This exchange-traded fund (ETF) is another option to consider instead of cash today. I regard cybersecurity as one of the most obvious growth sectors in the global economy for at least the next decade.

If one thinks about it, cyber-attacks only continue to grow as a threat. And it's my belief that individuals, companies and governments will be more and more willing to fork out top dollar to protect themselves. The companies that this ETF holds, such as Palo Alto, Fortinet and Zscaler, will be the direct beneficiaries of this trend.

This ETF has returned an average of 15.74% per annum since its inception in 2016.

MFF Capital Investments Ltd (ASX: MFF)

Our final candidate to consider is a listed investment company (LIC) MFF Capital. Similarly to Soul Patts, MFF invests in a portfolio of other investments on behalf of shareholders.

But this one is far more concentrated, with around 30 high-quality US shares making up most of its portfolio. These include the likes of Amazon, Mastercard, Visa, Alphabet and American Express.

If you are seeking exposure to some of the best companies in the world, I think MFF is a great choice. It's run by a highly experienced management team, and to a degree, seeks to emulate the investing practices of the legendary Warren Buffett.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. American Express is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet, Amazon, American Express, Mastercard, Mff Capital Investments, Visa, 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, Amazon, BetaShares Global Cybersecurity ETF, Fortinet, Mastercard, Palo Alto Networks, Visa, Washington H. Soul Pattinson and Company Limited, and Zscaler. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Alphabet, Amazon, and Mastercard. 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 man leans forward over his phone in his hands with a satisfied smirk on his face although he has just learned something pleasing or received some satisfying news.

A once-in-a-decade chance to get rich from ASX 200 shares?

The ASX share market is a great wealth-builder.

Read more »

An oil refinery worker stands in front of an oil rig with his arms crossed and a smile on his face as the Woodside share price climbs today
Dividend Investing

2 cheap ASX stocks that offer more than 8% dividend yields

Aussie investors have a huge range of excellent income stocks to choose from. Here's a couple trading at a decent…

Read more »

A smiling man at a shop counter takes payment from a female customer, with racks of plants in the background.
Share Gainers

The Wesfarmers share price is rising again. Should I buy the stock now?

The conglomerate reported warmly received results last week and announced a large dividend.

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

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

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 »