Where to invest $5,000 in ASX 200 shares in September

Xero Limited (ASX:XRO) shares are one of three that I would invest $5,000 into this month…

| More on:
a woman

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

If you're starting out with investing, don't worry if you don't have tens of thousands of dollars to invest in the share market.

This is because if you are able to invest $5,000 per year, you can still generate significant wealth if you do it over a long period of time.

For example, research by Fidelity shows that the Australian share market has generated an average total return of 9.1% per annum over the last three decades.

This means an investment of $5,000 each year for the last 30 years would have grown to be worth a total of $760,000 today if it earned the market return. I think this demonstrates just how rewarding long-term buy and hold investing can be.

With that in mind, here are three shares I would buy with that first $5,000:

A2 Milk Company Ltd (ASX: A2M)

I believe this infant formula and fresh milk company would be a great option for that $5,000 investment. I think a2 Milk Company is well-positioned to continue its strong growth in FY 2020 thanks largely to increasing demand for its infant formula in China, its strong pricing power, and the expansion of its fresh milk footprint in the United States. In FY 2019 the same drivers led to the company delivering a 41.4% increase in revenue to NZ$1,304.5 million and a 46.1% increase in EBITDA to NZ$413.6 million.

Nearmap Ltd (ASX: NEA)

With its shares down 42% from their high, I think now could be a good time to invest in this aerial imagery technology and location data company. Nearmap has really caught the eye over the last couple of years after growing its sales at an astonishing rate thanks to the increasing demand for its services in both Australia and North America. Due to the quality of its offering, new product releases, and its massive market opportunity in the United States, I remain confident that it will continue its strong form in FY 2020.

Xero Limited (ASX: XRO)

I think Xero could be a fantastic buy and hold option for investors due to its positive long-term growth outlook thanks to the large market opportunity its high quality business and accounting software has globally. It is quickly becoming the platform of choice for small and medium sized businesses across the globe. I've been impressed with its progress over the last few years and feel confident that there will be more of the same in FY 2020 and beyond.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. and Xero. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Nearmap Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Growth Shares

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Growth Shares

3 ASX 200 shares set to dominate the next decade

Let's see why these shares could be great long term picks for Aussie investors.

Read more »

A group of businesspeople clapping.
Growth Shares

3 ASX growth shares with 10-year compounding potential

Let's see which shares are being tipped as buys for growth investors.

Read more »

Woman happy and relaxed on a sofa at a shop.
Growth Shares

Are these 2 top ASX growth shares buys?

Are these high-flyers still buys?

Read more »

Two university students in the library, one in a wheelchair, log in for the first time with the help of a lecturer.
Growth Shares

3 stellar ASX growth shares to buy with $7,000

Let's see why analysts are feeling bullish about these top stocks.

Read more »

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

2 ASX shares to buy and hold for the next decade

I’m optimistic about what these investments can deliver in a year.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Growth Shares

High-conviction ASX 200 shares with 10-year upside

Let's see why analysts think these shares could be great long term picks.

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Growth Shares

The ultimate Australian stocks to buy and hold for 10+ years

These shares could be ultimate buys according to analysts.

Read more »

A smiling man take a big bite out of a burrito
Growth Shares

Looking for ASX growth shares? I rate these 2 as buys

I’m backing these investments to deliver big returns.

Read more »