The best ASX buys I'd grab to beat the market without a tonne of risk

There's always risk with investing, but I'd still recommend these two stocks to all.

| More on:
Woman relaxing on her phone on her couch, symbolising passive income.

Image source: Getty Images

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

It's a very difficult task indeed to recommend ASX share buys to anyone if they want to beat the market with minimal risk. That's because investing in any stock on the Australian share market is inherently risky.

However, the task becomes a little easier if we focus on ASX buys that offer inbuilt protections, such as diversified earnings bases and strong track records of beating the market. No penny stocks or speculative miners here.

So if I had to choose two ASX buys for someone looking to beat the market with minimal risk, here's what I'd choose.

2 best ASX buys to beat the market (without a tonne of risk)

Washington H. Soul Pattinson and Co Ltd (ASX: SOL)

First up is ASX 200 investing house Soul Patts. This company is one of my favourite investments on the ASX and a share I would happily buy today. Soul Patts is a share that offers both inherent diversification and a long track record of ASX outperformance.

It runs a series of investment portfolios on behalf of its shareholders. These include blue-chip shares, large stakes in a small range of quality companies, private credit investments, venture capital and property.

I'd be happy to tout Soul Patts as an ASX buy for this reason, as well as its enviable performance history. Last month, this company confirmed that its investment portfolio had delivered an average annual return (including dividends) of 12.4% per annum over the 20 years to 31 January 2024.

Speaking of dividends, Soul Patts also has the distinction of being the only stock on our share market that has delivered an annual dividend pay rise for 24 years in a row.

That's enough to make this stock the first ASX buy I'd recommend to anyone looking to beat the market without a boatload of risk.

Wesfarmers Ltd (ASX:WES)

Next up we have ASX 200 industrial and retail conglomerate Wesfarmers. Here we have, what is in my view, another ASX buy for anyone looking for a high-performance, lower-risk stock.

Wesfarmers offers much of the same diversification benefits as Soul Patts. This company also has a huge array of different earnings streams that all feed into its bottom line. Its crown jewel is Bunnings Warehouse, the highly successful hardware chain we'd all be familiar with.

But Wesfarmers also owns and operates OfficeWorks, Kmart, Target and catch.com.au. It also owns or part-owns businesses like Kleenheat Gas, Covalent Lithium, Workwear Group, and Wesfarmers Chemicals, Energy And Fertilisers (WesCEF). Amongst many others.

This company also has an enviable performance track record it can boast of, which is another reason I think it is an ASX buy today.

Wesfarmers may not have a decades-long streak of raising its dividends like clockwork. But it has still done so at an impressive rate. Particularly if you take into account the spinoff of Coles Group Ltd (ASX: COL) in 2018. Coupled with the 92.5% that Wesfarmers shares have appreciated over the past five years, and you have a very happy group of shareholders.

I fully expect these happy returns to continue for decades to come.

Motley Fool contributor Sebastian Bowen has positions in Washington H. Soul Pattinson and Company Limited and Wesfarmers. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers. The Motley Fool Australia has positions in and has recommended Coles Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Opinions

An ASX 200 market analyst holds his hand to his chin and looks closely at his computer screens watching share price movements
Opinions

Forget term deposits! I'd buy these two ASX 200 stocks instead

I think ASX stocks could make a much better investment than term deposits.

Read more »

share buyers, investors, happy investors
ETFs

How I would build a $100,000 portfolio with ASX ETFs today

You don't need more than three ETFs to build a diversified portfolio...

Read more »

iPhone with the logo and the word Google spelt multiple times in the background.
Opinions

I've been buying these 2 US stocks in 2025. Here's why

Sometimes the US markets are a better place to go shopping for stocks.

Read more »

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their shares on a laptop.
Opinions

Where I'd invest in ASX shares after the RBA interest rate cut

These stocks look really attractive to me. Here’s why…

Read more »

Miner looking at a tablet.
Opinions

3 reasons why the Fortescue share price could still be a buy

Let’s dig into why this mining giant could be a solid buy.

Read more »

A young woman wearing a red and white striped t-shirt puts her hand to her chin and looks sideways as she wonders whether to buy NAB shares
Opinions

The pros and cons of buying Wesfarmers shares in May

Is this retail giant an appealing opportunity?

Read more »

Smiling man sits in front of a graph on computer while using his mobile phone.
Opinions

2 ASX 200 shares that I think are still bargains after the market rally

These businesses look like attractive opportunities. Here’s why…

Read more »

A young woman looks at something on her laptop, wondering what will come next.
Opinions

Worried about another stock market sell-off?

Market declines don’t need to be too scary.

Read more »