As someone who was once a first-time investor, I know first hand how difficult it can be to pull the trigger and buy your first ASX stocks.
If you're close to buying your first ASX shares, chances are you'll already know about the potential benefits of investing your money in the share market. Into quality businesses that can help grow and compound your wealth over time.
However, having this theoretical knowledge is very different from taking the plunge and buying your first shares.
With so many options to choose from, and perhaps many opinions and recommendations from others to sift through, putting the proverbial pen to paper can be harder than one might think.
Today, let's try and make this process easier for beginner investors by discussing the ASX shares that I think would make a great start for any new investor's portfolio.
Three ASX shares perfect for a beginner investor to buy
Coles Group Ltd (ASX: COL)
First up, we have Coles, a company that most of us would no doubt be fairly familiar with. I've chosen Coles not for its flying growth potential, but for its simplicity, and reliability.
If an investor wants to really get into investing, it's important that they get familiar with a company, how it works, and how it makes money. This is easier said than done for many businesses in our modern world.
However, Coles remains a fairly easy business to get one's head around, in my view. An investor can go into a store any time they like, and take a look at 'their' company's physical assets.
This is an important part of investing, and I think Coles is a great first stock to buy in this light.
Coles is a steady, reliable company with healthy cash flows too. I think there's very little risk of Coles going bankrupt. Additionally, investors will get Coles' decent, fully franked dividend. This is currently yielding around 3.5%.
Argo Investments Ltd (ASX: ARG)
Next up, we have listed investment company (LIC) Argo Investments. LICs like Argo are a different kettle of fish to traditional businesses like Coles. Yes, they are companies. But instead of producing a good or service, they invest in other assets on behalf of their shareholders.
In Argo's case, this LIC has been around for almost a century. Over its long life, it has made a name for itself as a conservatively-managed, diversified investment. One that provides decent growth and chunky, fully franked dividend income for long-term investors.
To achieve this, Argo holds a massive portfolio (around 90) of blue chip ASX shares, which it manages for its shareholders. As of 28 February, some of its largest holdings included Commonwealth Bank of Australia (ASX: CBA), Telstra Group Ltd (ASX: TLS), Suncorp Group Ltd (ASX: SUN), and Woolworths Group Ltd (ASX: WOW).
If you'd like to start investing, but don't know which individual company to go for as your first share, Argo is a great option, given its underlying exposure to so many diversified businesses.
I think any investor could comfortably hold this LIC as their only investment if they so wished.
iShares S&P 500 ETF (ASX: IVV)
Finally, another stock beginner investors can consider for their first investment is this exchange-traded fund (ETF). The iShares S&P 500 ETF is an index fund that tracks the flagship S&P 500 Index (SP: .INX). This index represents the largest 500 companies that are listed on the stock markets of the United States. So no ASX stocks here.
It's no secret that the USA is home to many of the world's great businesses. If you buy this ETF, your largest underlying positions will be the likes of Apple, Microsoft, Amazon, and Google-owner Alphabet. But you'll also be invested in famous names like Coca-Cola, Netflix, Walmart, Mastercard, Colgate-Palmolive, and JP Morgan Chase.
The ASX is home to many great companies, but few offer the kind of world dominance that the S&P 500's top names do.
With this index fund being endorsed by none other than legendary investor Warren Buffett, I think it would make a fine first stock for any new ASX investor today.
