One advantage of investing in your twenties is that you can afford to take higher risks.
This does not mean that you should start trading your savings, but simply that you can invest in companies that may not be suitable for investors nearing retirement.
This is because if you are in your twenties, you have plenty of time to recover from your losses if things don’t go as planned.
Another advantage of investing in your twenties is the opportunity to benefit greatly from the composition.
For example, a single $ 10,000 invested in the equity market and earning a 9% return would increase to around $ 23,700 in 10 years. Whereas in 40 years, it would be worth around $ 315,000.
If you can then afford to invest $ 5,000 in the equity market each year after the first year (and earn the same return), you will have amassed a fortune of $ 2.15 million by the end of the year. 40.
It is certainly a nice place to retire, with only a very limited expense each year.
With that in mind, here are three best ASX stocks that could be good options for investors in their twenties:
The first share that I think investors in their twenties should consider buying is this payment company. I believe it is well positioned for growth over the next decade thanks to the growing popularity of buy now pay later with consumers and retailers and its opportunity for international expansion.
Another option to consider is Bubs. It is an infant formula and baby food company made from goat milk that has grown its product line at a rapid rate over the past two years. Fortunately, I think it still has a long track for growth. Especially given its growing footprint of online distribution in China and offline in Australian supermarkets.
Pushpay Holdings Group Ltd (ASX: PPH)
A final option to consider is Pushpay. It is a provider of a donor management system, including donor tools, financial tools and a custom community application for the faith sector. It is growing rapidly thanks to its leadership in a niche but lucrative market. I think I can continue to grow in the coming years thanks to its sticky product, the transition to a cashless society and its cutting-edge software.
Investors have heard it over and over: “I wish I had bought Altium or Afterpay when they were recommended by The Motley Fool. I would be sitting on a gold mine!” And that’s true.
And although Altium and Afterpay have had a good journey, we believe that these 5 other actions are glaring purchases. And you can buy them now for less than $ 5 per share!
* Extreme Opportunities returns from June 5, 2020
James Mickleboro has no position on any of the securities mentioned. Motley Fool Australia’s parent company, Motley Fool Holdings Inc., owns shares of BUBS AUST FPO and PUSHPAY FPO NZX. The Motley Fool Australia holds shares in AFTERPAY T FPO. Motley Fool Australia has recommended BUBS AUST FPO and PUSHPAY FPO NZX. We fools may not all share the same opinion, but we all think that varied range of perspectives makes us better investors. The Motley Fool has a disclosure policy. This article only contains general investment advice (under AFSL 400691). Authorized by Scott Phillips.