The coronavirus is causing a lot of volatility on the share market at the moment. If you have $1,000 to invest into shares, where are you supposed to invest it?
Well, it's quite hard to decide. At this stage we can't tell how far the virus will spread, how long it will spread for and how much damage it will do to each region.
However, valuations are falling almost across the board so I do think it could be a good idea to start investing soon, but be mindful that it could get worse over the coming weeks before things get better. But, we're long-term investors so short-term movements over a few months shouldn't derail our long-term goals.
For the last few months I've said Webjet Limited (ASX: WEB) could be a very good long-term pick. I still believe that, however with the coronavirus now spreading in Italy, South Korea and the Middle East, we might be able to get Webjet at an even cheaper price over the next few weeks, so patience could pay off. You have to be fairly brave to go for Webjet today!
My strategy has always been to invest in shares that can do well in good times or relatively bad times. No share is impervious to falls, but these two ideas could sail through any problems in 2020:
Growth choice – Pushpay Holdings Ltd (ASX: PPH)
Pushpay provides a donor management system, including donor tools, finance tools and a custom community to the faith sector, non-profit organisations and education providers in the US, Canada, Australia and New Zealand.
Why could Pushpay be a good choice even during the coronavirus? Well, I don't think people will stop being religious just because of infections going on in other areas of the world. I think people's donations will continue to flow to churches.
Besides, over the longer-term I think Pushpay is an attractive idea because it has been growing revenue at a good double-digit rate and the gross margin has been going up, the gross margin improved from 57% to 65% in the most recent result – this type of improvement shows that its net profit can go up at a fast pace, which is the type of share we should want to own.
Defensive choice – Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts has been around since 1903. The longevity itself is impressive, it takes a lot of good actions by management to survive decade after decade.
However, you've got to remember that the investment conglomerate has survived and thrived through wars, economic recessions, diseases and so on.
It has a diverse portfolio. I think this provides good, broad defence in-case any share in-particular are hurt. Not every one of its holdings will be unaffected, but it has plenty of strength through its holdings and its own conservative balance sheet. TPG Telecom Ltd (ASX: TPM) in-particular shouldn't see too much harm to its earnings; people still need internet, coronavirus or not.
Soul Patts has increased its dividend every year since 2000, including through the GFC.
Foolish takeaway
Over the next two or three years I think Pushpay could be the better performer because of how fast it is growing its revenue and profit margins. However, I have a lot of confidence in Soul Patts to do well over the long-term with lower risk.
