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Why I think these are the 10 best shares to buy for a starter portfolio

What are the best shares to buy for a starter portfolio today? As investing is a long-term pursuit, I believe high-quality businesses operating in structurally growing markets should be the first ports of call for new investors.

I’d steer clear of structurally challenged industries, like oil and tobacco. I’d also avoid highly cyclical sectors, such as banking. With this in mind, together with current valuations, here are my 10 best shares to buy for a starter portfolio right now.

Warren Buffett’s best share to buy!

Unilever (share price 4,167p, discount of 21.9% to 52-week high) owns world-class brands in home and personal care, and foods and refreshment. Warren Buffett is a big admirer. He backed a 4,000p-a-share takeover attempt a few years ago. I think it’s safe to say that in the UK stock market, Unilever is Buffett’s best share to buy!

World-class brands are also at the heart of alcoholic spirits giant Diageo (share price 2,686p, discount 26.1%). I expect both Diageo and Unilever to profit from rising global prosperity over the long term. Especially as they have a strong presence in emerging markets.

Value fashion retailer Primark is another brand I believe has a long international growth runway. While the business is temporarily shuttered, due to Covid-19, its owner Associated British Foods (share price 1,879p, discount 31.2%) has a range of other businesses in groceries, ingredients, sugar and agriculture.

Health and safety

Healthcare is another sector I’d look to for the best shares to buy for a starter portfolio. I see medical devices specialist Smith & Nephew (share price 1,553.5p, discount 23.2%) as a strong play on the rising longevity of the world’s population, and increasing health spending in developing economies.

Similarly, I think there are strong structural tailwinds for the critical safety, healthcare and environmental technologies of Halma (share price 2,121p, discount 6.2%) Its recent Covid-19 update shows the strengths of the group with great clarity.

Three more best shares to buy

In real estate, I favour niche operators. And my healthcare theme continues with property pick Primary Health Properties (share price 156.4p, discount 6.7%). Its properties are let on long leases, and the rent roll is largely underpinned by government.

Defence giant BAE Systems (share price 513.6p, discount 23.6%) is another company that benefits from government spending and long-term contracts. The UK, US and other allied governments are key customers.

The amount of information in the world is expanding exponentially. I see Relx (share price 1,803pp, discount 14.5%) as a strong play on this growth. It owns vast databases and sophisticated analytical tools that are invaluable for its customers in fields such as law, science and medicine.

Further diversification

I think having some exposure to gold is sensible. The price of the metal, and the share prices of companies that mine it, typically perform strongly when investors are bearish on stocks generally. Centamin (share price 164.4p, 52-week high) owns a Tier 1 gold mine. It regularly pays generous cash dividends to its shareholders. That’s something you don’t get from owning the metal itself.

Finally, and to add further diversification, I’d rank Capital Gearing Trust (share price 4,240p, discount 5.6%) among my best shares to buy for a starter portfolio. It invests in both equities and lower-risk assets, and has an excellent, multi-decade risk-adjusted performance.

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G A Chester has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended Associated British Foods, Diageo, Halma, Primary Health Properties, and RELX. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.