There is no shortage of ways to invest in the ASX share market.
You can chase growth, focus on income, or try to time the next big move. But if I had to start fresh today, I would keep things much simpler.
I would build an ASX share portfolio that covers the key building blocks of long-term investing.
Start with broad market exposure
The first piece would be diversification.
Instead of trying to pick every winner, I would want exposure to a large group of ASX shares from the outset. That is where an exchange-traded fund (ETF) can play a role.
For example, the Vanguard Australian Shares Index ETF (ASX: VAS) provides exposure to a broad range of companies across the ASX. It includes large, mid, and small-cap stocks in one investment.
That gives you a foundation.
You are not relying on a single company to perform. You are participating in the broader market over time.
Add a quality growth layer
Once that base is in place, I would look to add a smaller number of individual ASX shares with clear growth potential.
One example I would consider is TechnologyOne Ltd (ASX: TNE).
It is a software business that continues to grow its customer base and expand its recurring revenue. What I like is the visibility. Subscription models tend to create more predictable earnings over time.
This part of the portfolio is about adding growth on top of the broader market exposure.
Include a steady income contributor
The final piece would be income.
Even if I am focused on long-term growth, I still like the idea of having some cash flow coming in along the way.
A company like Transurban Group (ASX: TCL) fits that role. It owns toll road assets that generate steady, inflation-linked revenue. Similarly, Woolworths Group Ltd (ASX: WOW) could also do a job.
They could support consistent distributions and add a more defensive element to the portfolio.
Keep it manageable
One thing I would avoid is overcomplicating things.
You do not need 20 or 30 holdings to get started. A small number of well-chosen investments can be enough.
This also makes it easier to stay on top of what you own and remain confident during periods of market volatility.
Build over time
This structure is only the beginning.
From there, I would look to add regularly. Whether it is monthly or whenever cash becomes available, consistency is what builds the portfolio.
Over time, those contributions can have a bigger impact than trying to pick the perfect entry point.
Foolish takeaway
If I had to build a simple ASX share portfolio today, I would focus on three things.
Broad market exposure, a layer of growth, and a source of income.
It is not complicated, but I think that is the point. A simple approach, applied consistently over time, can go a long way in building wealth.
The post If I had to build a simple ASX portfolio today, this is what I'd do appeared first on The Motley Fool Australia.
Motley Fool contributor Grace Alvino has positions in Transurban Group and Vanguard Australian Shares Index ETF. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One and Transurban Group. The Motley Fool Australia has positions in and has recommended Transurban Group and Woolworths Group. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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