It's been a dramatic and historic day for Australian shares and the stock market this Wednesday, as the S&P/ASX 200 Index (ASX: XJO) clocks new record highs. As we covered earlier this afternoon, the ASX 200 exceeded its February record this morning, quickly rising as high as 8,639.1 points soon after market open.
With the market at these new heights, it can be a difficult time to find quality ASX shares to buy at a reasonable price.
Yesterday, we covered two of my favourite picks for a beginner investor in the current market. These were both broad-based, passive-style picks. Today, I'm going to add two more for consideration for someone with $500 to invest, this time individual Australian shares.
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Two Australian shares for beginners to buy as the market hits all-time highs
Woolworths Group Ltd (ASX: WOW)
For our first share, I've chosen the ubiquitous supermarket operator Woolworths. There are three reasons for this. Firstly, Woolworths is a popular and mature company, with a healthy dividend policy and entrenched market dominance in its field. Of all the shares on the ASX, Woolworths would have to rank at or near the bottom in terms of risk of bankruptcy.
After all, we all need to eat and drink, and as long as we can visit a Woolworths store and buy life's essentials for a competitive price, this company will be around. Those are fantastic attributes for a first investment.
Secondly, I think it's important for beginner investors to be able to visit the companies that they own a small piece of and understand how they generate returns for shareholders. This can help investors develop a passion for what investing is all about. It's not difficult to understand how this company operates and makes its crust.
Thirdly, unlike many Australian shares, Woolworths is not trading at a historically high share price right now. In fact, the company is around 20% lower today compared to where it was two years ago. As such, a beginner investor can arguably buy Woolworths shares right now as a compelling long-term investment.
Washington H. Soul Pattinson and Co Ltd (ASX: SOL)
Next up, we have diversified investing house Soul Patts. Unlike most Australian shares, Soul Patts doesn't really sell goods or services itself. Instead, it manages a massive portfolio of other investments and assets on behalf of its shareholders. These assets include major stakes in other ASX shares like New Hope Corporation Ltd (ASX: NHC) and TPG Telecom Ltd (ASX: TPG), but also private credit, real estate, and other unlisted assets.
It is also in the process of merging with brickmaker and property company Brickworks Ltd (ASX: BKW), which should increase and diversify its portfolio even further if it goes to plan.
In this way, Soul Patts offers inherent diversification for shareholders, which beginner investors will appreciate. But it also offers an enviable track record when it comes to returns. Over the 25 years to 31 January, Soul Patts has delivered an average return of 13% per annum, including dividend returns. Speaking of dividends, this Australian share also boasts the best record on the ASX. It has raised its annual dividend every single year since 2000.
It's my view that a beginner investor can't get much better than this company as a first $500 investment.
