I believe that investing in stocks (ASX) is one of the best ways to improve our finances and increase wealth over time. Starting from scratch can be a daunting prospect for a beginning investor, but I think there are some names that could be good choices in the long run.
Stocks have the ability to produce attractive compound returns. In other words, growth upon growth for several years. Of course, there is always the possibility that in any given year there may be a market crash. The current volatility that we are seeing is an example of that. The COVID-19 crash was another example of a market crash, but that also showed how markets have generally recovered over time.
I see market downturns as opportunities to buy businesses and assets at cheaper prices. When I go to the supermarket, I prefer products with a discount price instead of full price. For me, it is something similar to investing. I prefer to invest heavily when stock prices are low.
In my opinion, the current market downturn means it might be a good time to invest if you were to start a portfolio from scratch. With that in mind, if I was given $20,000 to invest in ASX stock, this is how I would do it:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
I would invest $4,000 in Soul Pattinson. For me, this investment house business can be a very long-term investment (it’s already over a century old). It has a diverse portfolio in a variety of industries such as telecommunications, resources, property, construction products, agriculture, etc.
I would make it my biggest assignment because I think it can provide stability, long-term growth and growing dividends.
Wesfarmers Ltd (ASX: WES)
Then, he would put $3,000 into Wesfarmers stock. Wesfarmers is another conglomerate, but it has a more focused portfolio. The Bunnings hardware business is the key division, generating big profits for Wesfarmers, but the ASX stake also owns other quality businesses in retail (Kmart, Officeworks and more), health care (Priceline), energy and fertilizers ( WesCEF), etc. . I like that you can and do buy and sell businesses to improve your portfolio.
I would like to invest $2,500 in Airtasker stock. I believe that the local services market business has a very promising future. It is generating growth and making quick profits in the big UK and US markets.
It is one of my favorite ASX growth stocks and I think it is doing the right thing for long-term success. Nothing is guaranteed, but I think it could be a much bigger and more profitable business a decade from now if it continues to grow its revenue at a double-digit rate.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
I think MOAT ETF is one of the best Exchange Traded Funds (ETFs) on ASX. I would put $3,500 on this election.
It is an actively managed portfolio focused on US businesses that have strong competitive advantages that are expected to last for years to come. Companies are only added to the portfolio if they are considered to be of good value. The ETF has performed well, with the MOAT ETF unit price nearly doubling in five years. I also like the geographic diversification the ETF would add for Aussies.
Pilbara Minerals Ltd (ASX:PLS)
Pilbara Minerals is an ASX lithium mining stock I would put $2,000 on.
While not as cheap as it was in June 2022, I am bullish on the long term for Pilbara Minerals. Not only is it benefiting from very high lithium prices, which could remain relatively high as demand for electric vehicles and batteries grows, but it is also working to become more involved in the lithium value chain. I think this is very promising for the future profitability of the business.
Temple and Webster Group Ltd (ASX: TPW)
Temple & Webster’s stock price is down about 50% in 2022. I’d like to invest $1,500 because I like how the company is investing in various ways to provide great customer service, including their virtual reality and virtual reality technology. increased. The online model can have better profit margins and faster scale than a brick-and-mortar business could achieve.
After his fall this year, I think it’s an opportunity. I like its expansion into other areas like home improvement. The scale should also help profit margins going forward. Year after year, it is growing rapidly.
Betashares Climate Change Innovation ETF (ASX: ERTH)
This ETF is about investing in a portfolio of global businesses that aim to help the world decarbonize or become greener and more sustainable in some way.
I would like to invest $1,500 in this one because I believe that the growing desire of societies to reach net zero in the coming decades will translate into higher revenues and profits for the companies that make that greener future a reality.
Dancer Technology Investments Ltd (ASX: BTI)
This is an investment company that invests purely in small (but fast-growing) technology businesses. I would like to invest $2,000 in this one.
You’re looking for private technology businesses that have a lot of growth potential, international revenue, and good unit economics. Bailador’s investment team has been effective in pursuing those opportunities. I am supporting them to continue to find good opportunities, while the introduction of a regular dividend is also attractive to me.
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