When I’m looking for ASX income stocks to buy, the dividend growth that the stock can potentially offer is far more important than its upfront dividend yield.

Many ASX dividend stocks that offer large upfront yields aren’t in a financial position to be able to grow those yields substantially going forward. That puts a speed limit on future potential returns.

But income stocks that offer a potentially long runway of dividend growth can compound their future payouts for the benefit of shareholders. That’s the kind of investment I love to buy.

So with that in mind, let’s discuss two ASX income stocks that have been growing their payouts at the speed of a rocket.

Two ASX income stocks growing their dividends at a blistering pace

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

First up, we have the investing house, Washington H. Soul Pattinson, or Soul Patts for short. Soul Patts runs a massive portfolio of underlying investments on behalf of its shareholders. This portfolio includes large stakes in other ASX blue chips, strategic single stock investments, private credit, venture capital, and property.

In short, a diversified, yet high-performance asset base.

This company has been at this game for decades, and it has the runs on the board to show for it. For one, it is the only ASX income stock that has a 28-year (and counting) streak of annual dividend hikes.  These aren’t 1% per year hikes either. Soul Patts doled out an annual total of 50 cents per share back in 2015. By 2025, this had grown to $1.03 per share. All fully franked too.

Between 2021 and 2025, this ASX income stock delivered an average annual dividend growth rate of 11.9% per annum. That’s real wealth-building material right there.

MFF Capital Investments Ltd (ASX: MFF)

Next, let’s check out another ASX income stock in MFF Capital. MFF is a listed investment company (LIC), meaning that, much like Soul Patts, it runs an underlying portfolio on behalf of investors. In MFF’s case though, this portfolio consists mostly of US stocks.

MFF follows the Warren Buffett playbook of buying high-quality companies at compelling prices, and holding them for years on end. Some of its largest current positions, which include Amazon, Alphabet, Mastercard, American Express, and Visa, were accumulated years ago.

Let’s talk dividends, though. Like Soul Patts, MFF is a dividend growth machine. It doesn’t quite have Soul Patts’ payout longevity yet. But its growth has been equally impressive.

Back in 2017, MFF forked out 2 cents per share in annual, fully franked dividends to its shareholders. By 2021, the company had hit 7.5 cents per share. Last year, investors enjoyed a total of 17 cents per share. In 2026, the company has told investors to expect a total of 21 cents per share, up 23.5% from just 2025 levels if so. Since 2017, the company has averaged an annual increase of more than 25%. Enough said.

The post 2 ASX income stocks with rocketing dividends appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares I’d much rather buy than an investment property
• Has your ASX dividend stock increased its payout 28 years in a row?
• 2 quality ASX 200 shares I’d buy if the market fell another 10%
• Want to build a second income? I’d buy these ASX shares today
• Why Monash IVF, NAB, Viva Energy, and Worley shares are falling today

American Express is an advertising partner of Motley Fool Money. Motley Fool contributor Sebastian Bowen has positions in Alphabet, Amazon, American Express, Mastercard, Mff Capital Investments, Visa, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Mastercard, Visa, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Alphabet, Amazon, Mastercard, Mff Capital Investments, and Visa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) share James Hardie Industries Plc (ASX: JHX) could be a seriously underrated opportunity amid ASX stock market volatility.

This opinion isn’t coming from me, it’s from one of Australia’s leading fund managers – L1 Group Ltd (ASX: L1G). L1 has a long-term track record of outperforming the ASX 200 with its main listed investment company (LIC), L1 Long Short Fund Ltd (ASX: LSF).

In the three years to March 2026, the LIC delivered an average net return per year of 15.9%, outperforming its benchmark by an average of more than 6% per year.

L1 noted that the Iran War triggered a widespread fall in equity markets, with a major spike in market volatility. It’s using this period of elevated volatility to identify “high quality companies that are now trading far below fair value, even assuming a less favourable macro outlook.”

The fund manager notes that James Hardie is a leading siding (fibre cement), composite decking and building solutions company.

Let’s take a look at why L1 recently increased its investment in James Hardie shares following a decline of more than 20% during March.

The positives of the investing in the ASX 200 share

James Hardie is one of the building product businesses facing an uncertain situation related to inflation and costs. L1 said that the James Hardie share price (and peers) pulled back amid worries about higher interest rates and expectations of softening demand.

The fund manager said this contributed to a sector de-rating toward a bottom-of-the-cycle valuations. L1 believes there’s a good prospect for returns from a “future normalisation of interest rates and/or improving consumer confidence”.

It was suggested by the investment team that the business has no director impacts from the Iran war, with around 80% of sales generated in North America.

L1 suggested that James Hardie offers strong earnings growth potential with an earnings multiple in the mid-teens.

The fund manager said that the James Hardie share price is valued on a forward price/earnings (P/E) ratio of around 15x. That compares to a 10-year average of the forward P/E ratio being around 21x.

The 2022 period of high inflation saw the business trade at an even lower valuation, but the business has largely traded above that 15x P/E ratio since early 2023.

L1 isn’t the only expert that likes James Hardie shares – the ASX 200 share is currently rated as a buy by 15 analysts, according to Commsec. It’s one of the most liked businesses inside the ASX 200 right now.

The post Experts are bullish about the potential of this ASX 200 share! appeared first on The Motley Fool Australia.

More reading

• Australian couples vs singles: who needs more superannuation to retire?
• Nervous investors turn to ASX 200 defensives as global energy shock drags on
• The superannuation balance you actually need at 65 to retire without the Age Pension
• 5 years ago, $10,000 bought 111 CBA shares. But how many would it buy now?
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tristan Harrison has positions in L1 Long Short Fund. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I often say that ASX shares are the best place to look for passive income due to their attractive dividend yields as well as franking credits. I’d use ASX shares to build up a second income.

Some investors may be drawn to names like Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP), but I think there are options that can provide better reliability and better long-term payout growth.

By choosing growing ASX shares, we can receive pleasing payouts in the shorter-term and see very noticeable growth over the long-term. That’s why I’ve got my eyes on the following ASX shares for passive income.

L1 Long Short Fund Ltd (ASX: LSF)

This is a listed investment company (LIC), which means its job is to invest in other assets on behalf of shareholders.

One of the most appealing features of this LIC is that it invests in both ASX shares and global shares, which is a pleasing level of diversification and gives the company a very wide investment universe to hunt for opportunities.

Additionally, the ASX share is able to utilise a short-selling strategy which means it can make money when share prices go down.

It has made money from a variety of sectors including resources, industrials and communication services. It has not needed technology shares to achieve its 16% average net return per year over the five years to 31 March 2026. Past performance is not always a reliable indicator of future performance, of course.

With that powerful portfolio business, L1 Long Short Fund has been utilising a portion of it to deliver a growing dividend. The ASX share’s quarterly dividends in the first-half of FY26 were up 13.6% year-over-year compared to the HY25 dividend.

I’m expecting it to continue hiking its quarterly dividend for the foreseeable future. At the time of writing, I think its next 12 months of quarterly dividends will translate into a grossed-up dividend yield of 5.2%, including franking credits.

I think this ASX share is a great option for building a second income.

APA Group (ASX: APA)

APA is another ASX share with excellent passive income credentials. It’s an energy infrastructure giant that generates significant cash flow which funds its distributions.

Its key asset is the huge gas pipeline network which connects sources of supply to demand. As a sign of how important this business is to Australia, take in this fact: APA transports half of Australia’s gas usage. Not many Australian businesses can claim that sort of reliance in Australia.

But, that’s not the only asset in the APA portfolio. It also owns gas power stations, gas storage, gas processing, electricity transmission, solar power and wind farms.

Pleasingly, most of APA’s revenue is linked to inflation, giving the business a good sense of protection during periods of higher inflation, like now.

Its expanding portfolio of assets generates the cash flow which pays for the growing passive income.

APA has increased its annual distribution each year over the past 20 years thanks to its rising cash flow. It’s expecting to increase its FY26 annual payout to 58 cents per security. At the time of writing, that translates into a forward distribution yield of 5.8%.

The post Want to build up a second income? These 2 top ASX shares are a buy appeared first on The Motley Fool Australia.

More reading

• 3 ASX dividend shares I’d hold through anything
• 5 powerhouse ASX dividend shares to buy and hold until 2050
• 3 ASX 200 shares tipped to tumble 10% (or more) in the next 12 months
• Forget BHP shares! Buy these ASX dividend shares instead for passive income
• 3 ASX dividend shares to buy for 5.8%, 7%, and 10% yields

Motley Fool contributor Tristan Harrison has positions in L1 Long Short Fund. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Apa Group. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Residential real estate is a solid asset class to invest in for the long-term with potential for capital gains. But, there are a few negatives that are hard to avoid compared to ASX shares.

Investing in a house as an investment property likely means being negatively geared if a loan funds a large majority of the purchase. In other words, investors are making a cash flow loss each year, so the investor would need to fund that loss from their own personal finance budget.

On the other hand, there are ASX shares with exposure to real estate that can deliver solid capital growth and very attractive passive income. Let me tell you about two of my favourite ways to tap into the real estate theme on the ASX.

Centuria Industrial REIT (ASX: CIP)

Industrial property is a good place to invest in, given the rising value of land and growing demand for those sorts of facilities. I think one of the most important things that makes a good real estate investment is the potential for rental growth, which should drive the long-term value of property.

Industrial property is in demand because of growing usage of online shopping, refrigerated facilities for food and medicine, and rapid growth of data centres. A rising population is also a useful tailwind for the industrial space.

Another positive for this ASX share is the lack of industrial property supply, which has helped lead to an incredibly low vacancy rate across Australia’s cities.

All of the above is helping the business drive its rental income higher. In the FY26 half-year result, the business reported like-for-like net operating income (NOI) growth of 5.1%.

In the coming years, the ASX share could see significant rental growth as contracts come up for renewal because the portfolio has a 20% average under-renting as of HY26, thanks to significant market rental growth in the last few years.

In terms of the positive passive income, Centuria Industrial REIT is projected to pay an annual distribution of 16.8 cents per unit. That translates into a forward distribution yield of 5.6%, at the time of writing.

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

The other ASX share I want highlight as an option that gives exposure to real estate is Soul Patts, an investment conglomerate.

It has a diversified portfolio across various sector, but arguably its biggest exposure is to property, with different investments.

The business reported that at the end of the first half of FY26, its portfolio value – the net asset value (NAV) – was $13.8 billion.

Soul Patts now owns the entirety of the Brickworks business, Australia’s largest bricks manufacturer, as well as a number of other building products such as masonry. On top of that, the acquisition gave it ownership of Brickworks’ multi-billion portfolio of industrial property assets.

The ASX share now owns investments in distribution centres, manufacturing buildings, data centres, land held for development, agriculture and retirement living.

On the returns side of things, Soul Patts reported in the HY26 result its NAV has seen a compound annual growth rate (CAGR) of 11.1% between HY23 and HY26.

Impressively, Soul Patts has increased its regular annual dividend per share every year since 1998 and it currently offers a grossed-up dividend yield of 3.6%, including franking credits, at the time of writing.

The post 2 ASX shares I’d much rather buy than an investment property appeared first on The Motley Fool Australia.

More reading

• Has your ASX dividend stock increased its payout 28 years in a row?
• 2 quality ASX 200 shares I’d buy if the market fell another 10%
• Want to build a second income? I’d buy these ASX shares today
• Why Monash IVF, NAB, Viva Energy, and Worley shares are falling today
• I’d buy this ASX dividend stock in any market

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

It was another busy week for Australia’s top brokers. This has led to a number of broker notes being released.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

DroneShield Ltd (ASX: DRO)

According to a note out of Bell Potter, its analysts have retained their buy rating and $4.80 price target on this counter-drone technology company’s shares. Bell Potter was pleased with DroneShield’s performance in the first quarter, highlighting that revenue was up 121% on the prior corresponding period and ahead of expectations. The broker was also pleased that the company’s SaaS revenue continues to grow strongly. It now represents 6.9% of total revenue. Looking ahead, Bell Potter thinks DroneShield has a market leading offering and a strengthening competitive advantage. As a result, it believes the company is well-positioned to benefit from an expected wave of spending on counter-drone solutions. It suspects that this will lead to material contracts flowing from its $2 billion+ potential sales pipeline over the next three to six months. The DroneShield share price ended the week at $3.72.

NextDC Ltd (ASX: NXT)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating on this data centre operator’s shares with a slightly reduced price target of $18.00. The broker notes that NextDC has raised capital to support accelerated construction plans. Morgan Stanley points out that NextDC is doing this having won its largest-ever single contract with a 250MW customer for the S4 data centre in Sydney. And while it concedes that NextDC shares trade at a premium to US peers, the broker believes this is justified given its significantly stronger growth outlook. The NextDC share price was fetching $14.95 at Friday’s close.

Pro Medicus Ltd (ASX: PME)

Analysts at Morgans have retained their buy rating on this health imaging technology company’s shares with a reduced price target of $210.00. According to the note, the broker has revised its financial model for Pro Medicus. This includes deliberately setting a lower bar for its estimates. Morgans notes that its remodelled estimates prioritise achievability over optimism. In addition, they stage implementation revenue conservatively and mark foreign exchange to spot. The broker believes this is the right framework for a stock where sentiment has been fragile of late. Nevertheless, Morgans believes Pro Medicus’ growth story remains untarnished, highlighting that contract news flow since February has been exceptional. This includes ~$100 million in wins and renewals, all at higher pricing, with cardiology upsell gaining traction. The Pro Medicus share price ended the week at $138.34.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Cochlear, CSL, and DroneShield shares
• 2 ASX 200 stocks that could rise 50%
• I was going to buy these ASX tech stocks. Now, I’m not so sure
• Brokers name 3 ASX shares to buy right now
• NextDC just raised $750 million, here’s why the shares are climbing

Motley Fool contributor James Mickleboro has positions in Nextdc and Pro Medicus. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Building a passive income stream from the share market isn’t as hard as you think.

Rather than relying on a handful of dividend-paying ASX stocks, many investors use exchange traded funds (ETFs) to access a broader pool of income-generating companies.

This can help smooth out returns and reduce the impact of any single company cutting its payout.

Here are two ASX ETFs that offer different approaches to generating income.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

The first ASX ETF for income investors to look at is the Vanguard Australian Shares High Yield ETF.

This popular fund focuses on Australian shares with higher forecast dividend yields. It provides exposure across sectors, while applying limits to reduce concentration in any single industry or company.

Its holdings include shares such as BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), Telstra Group Ltd (ASX: TLS), and Woodside Energy Group Ltd (ASX: WDS).

Commonwealth Bank highlights the type of income this ETF targets. As Australia’s largest bank, it has a long history of paying dividends and benefits from a dominant position in the domestic market.

By combining multiple high-yielding companies in one portfolio, this fund offers a diversified source of income that can be easier to manage than holding individual shares.

At present, the Vanguard Australian Shares High Yield ETF offers an attractive trailing dividend yield of 4.15%.

BetaShares Global Royalties ETF (ASX: ROYL)

Another ASX ETF worth considering for a passive income portfolio is the BetaShares Global Royalties ETF.

This fund takes a different approach by focusing on companies that earn revenue through royalties rather than traditional operations.

Because royalty-based businesses often have lower capital requirements, they are able to return more of their earnings to shareholders than other companies.

The BetaShares Global Royalties ETF’s holdings currently include companies such as Franco-Nevada Corporation (NYSE: FNV), Texas Pacific Land Corporation (NYSE: TPL), and Wheaton Precious Metals Corp (NYSE: WPM).

Franco-Nevada provides a useful example of the type of holding you will get with this fund. It earns royalties from mining operations, giving it exposure to commodity production without the same level of operational risk as miners themselves. This can support more stable cash flows over time.

The BetaShares Global Royalties ETF currently trades with a generous trailing dividend yield of 5.4%.

The post The best ASX ETFs to buy for passive income appeared first on The Motley Fool Australia.

More reading

• Almost ready to retire? I’d buy cheap ASX dividend shares for passive income
• The easy way to buy ASX dividend shares and build passive income
• How to build a second income from ASX shares without taking big risks
• Why this is the best income ASX ETF for retirees
• Vanguard ETF dividends to be paid today

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended BHP Group and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When it comes to retirement, one of the most common assumptions is that couples need far more superannuation than singles.

After all, two people means double the expenses, right?

Not quite.

The reality is more nuanced, and understanding the difference can have a big impact on how you plan for retirement.

What the benchmarks say

According to the Association of Superannuation Funds of Australia, the amount of super required for a comfortable retirement is around $630,000 for a single person and around $730,000 for a couple combined.

At first glance, that might seem surprising. A couple only needs $100,000 more than a single person, not double.

That’s because many costs in retirement are shared.

Why couples need less superannuation per person

Retirement spending doesn’t scale linearly.

Housing is the clearest example. Whether one person lives in a home or two, many costs remain the same. Rates, maintenance, and utilities don’t double just because another person is there.

The same applies to a range of other expenses. Things like internet, streaming services, insurance policies, and even groceries benefit from economies of scale.

This means couples can spread costs across two people, making retirement more efficient on a per-person basis.

Income needs tell the same story

This dynamic is also reflected in annual spending estimates.

A comfortable retirement currently requires around $54,000 per year for singles and about $76,000 for couples. Again, the couple doesn’t need twice as much, they need only about 40% more.

That difference highlights how shared living reduces financial pressure.

Where singles face challenges

For singles, the lack of shared costs creates a tougher financial equation.

Every expense, from housing to utilities to everyday living, must be covered by one income source. There is less flexibility and fewer opportunities to reduce costs without impacting lifestyle.

This means singles often need a higher super balance relative to their situation, even if the absolute number is lower.

There is also less margin for error. Unexpected expenses or market downturns can have a more immediate impact when there is only one income stream to rely on.

Where couples have an advantage

Couples benefit from both shared costs and shared resources.

They often have two super balances, two potential income streams, and more flexibility in how they manage spending and drawdowns.

Even if one partner has a smaller balance, the combined pool can still support a comfortable lifestyle.

In many cases, couples are also better positioned to continue part-time work or adjust their retirement timing, which can further strengthen their financial position.

But it’s not always straightforward

Of course, not all couples are financially equal.

Differences in age, health, spending habits, and super balances can all influence outcomes. In some cases, one partner may carry most of the financial weight.

Similarly, singles who own their home outright and have modest spending needs may find they can retire comfortably on less than expected.

The real takeaway

So, who needs more superannuation to retire?

In absolute terms, couples need more, but only slightly.

In practical terms, singles often face the greater challenge because they don’t benefit from shared costs and flexibility.

Foolish takeaway

Retirement isn’t just about how much super you have, it is about how your life is structured.

Couples can stretch their savings further thanks to shared expenses, while singles need to be more self-reliant.

Understanding that difference can help you set more realistic goals and plan a retirement that works for your situation, not just the averages.

The post Australian couples vs singles: who needs more superannuation to retire? appeared first on The Motley Fool Australia.

More reading

• Nervous investors turn to ASX 200 defensives as global energy shock drags on
• The superannuation balance you actually need at 65 to retire without the Age Pension
• 5 years ago, $10,000 bought 111 CBA shares. But how many would it buy now?
• Here are the top 10 ASX 200 shares today
• ASX 200 drops again. This is what’s starting to worry investors

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Cochlear Ltd (ASX: COH) shares just had a week to forget.

Despite closing up 2.47% on Friday to end the day at $97.35 a share, the S&P/ASX 200 Index (ASX: XJO) hearing solutions company ended the week down almost 43%.

That’s far worse than the almost 2% loss posted by the benchmark index this week.

We’ll take a look at why this week’s fall could see Cochlear shares trading at a long-term bargain below.

But first…

What on Earth happened to Cochlear shares this week?

The bulk of the losses for the ASX 200 healthcare stock came on Wednesday.

Cochlear shares closed the day down a very painful 40.7% following a decidedly disappointing trading update.

Investors were overheating their sell buttons after the company slashed its full-year FY 2026 profit guidance and flagged slumping demand for its implants in developed markets.

Atop the softer trading conditions in developed markets, Cochlear also said that it could be impacted by cancelled orders and delayed deliveries to its Middle East markets amid the ongoing conflict.

On the profit front, Cochlear slashed its FY 2026 underlying net profit guidance to between $290 million and $330 million. That’s a sharp decline from prior guidance of $435 million to $460 million.

Despite the current woes, Cochlear CEO Dig Howitt was optimistic about the company’s outlook.

Howitt said:

We remain confident of our market leadership. We have seen strong adoption of the Nucleus System across the developed markets, with very positive customer feedback and a strong interest in exploring the system’s potential to further improve hearing outcomes.

Why this ASX 200 stock could be set to bounce

Following this week’s selling, Filip Tortevski, senior analyst at Wealth Within, said that Cochlear shares may now present ASX investors with “the best bargain of the year”.

“Cochlear Limited has just delivered one of the sharpest selloffs in ASX history,” he noted.

According to Tortevski:

That sounds alarming, but the drivers are largely cyclical and external, including US Medicaid funding changes, hospital capacity constraints in Europe, and currency headwinds, not a breakdown in the company’s core business.

The stock was already down more than 30% over the past year, meaning much of the risk had been building. Historically, Cochlear has recovered from similar earnings resets as demand normalises, suggesting this could be one of the most compelling valuation resets on the ASX today.

Tortevski concluded, “Watch around the $100 level [for Cochlear shares] like a hawk as there are many technical reasons why this stock could bounce from here.”

The post Down 43% this week, are Cochlear shares now the best bargain buy of the year? appeared first on The Motley Fool Australia.

More reading

• After falling 43% in a week, are Cochlear shares now a buy?
• Buy, hold, sell: Cochlear, CSL, and DroneShield shares
• How high could Cochlear shares bounce back? Brokers disagree
• 3 ASX 200 shares too cheap to ignore after sell-offs
• Could these ASX stocks really be set to double after crashing this week?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Cochlear. The Motley Fool Australia has recommended Cochlear. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

For many Australians, retirement planning starts with a simple question: how much income will be enough?

If the goal is to replace the median salary, that benchmark currently sits around $74,000 per year or $6,166 per month. Generating that level of income from a self-managed super fund (SMSF) could allow investors to maintain a similar standard of living without relying on employment.

That raises an important question. How much capital is needed to produce that level of passive income?

Working backwards from the income goal

The simplest way to approach this is to start with the income target and apply a realistic dividend yield.

If a portfolio is generating a 5% dividend yield, an annual income of $74,000 would require an SMSF balance of approximately $1.48 million.

Of course, yields can vary over time and across different investments. But this provides a useful benchmark when setting long-term goals.

Building toward the target

Reaching a $1.48 million SMSF balance is not usually the result of a single investment. It is typically built over many years through a combination of contributions and investment returns.

Regular contributions play an important role. Employer contributions, salary sacrifice, and personal contributions can steadily increase the balance over time.

The earlier this process starts, the more time the fund has to compound. Even small contributions can grow meaningfully when combined with consistent investment returns.

Focusing on growth and income

In the early stages, the priority is often growth rather than income.

A portfolio tilted toward growth assets like ResMed Inc. (ASX: RMD) and TechnologyOne Ltd (ASX: TNE) could help increase the overall balance more quickly. As the fund grows closer to its target, the focus can gradually shift toward income-generating investments.

This transition allows the portfolio to move from accumulation to income production in a more controlled way.

Managing risk along the way

While aiming for a specific income level, it is important to consider risk.

A diversified portfolio is important and can help reduce the impact of market volatility and protect against unexpected changes in income. This can include a mix of sectors, asset types, and income sources.

It also helps to avoid relying too heavily on a small number of investments.

Foolish takeaway

A $6,166 monthly income is a clear and tangible goal.

Understanding the capital required to reach it can help shape investment decisions and set realistic expectations.

From there, the focus shifts to building the balance steadily over time and positioning the portfolio to deliver consistent income.

The post How much is needed in an SMSF to target a $6,166 monthly passive income? appeared first on The Motley Fool Australia.

More reading

• I was going to buy these ASX tech stocks. Now, I’m not so sure
• 6 ASX 200 shares downgraded by brokers this week
• Where I’d invest my first $500 into ASX shares
• How to invest in ASX shares when the market feels uncertain
• 3 stellar ASX growth shares to buy now with 30% to 70% upside

Motley Fool contributor James Mickleboro has positions in ResMed and Technology One. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed and Technology One. The Motley Fool Australia has positions in and has recommended ResMed. 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.

The ASX 200 consumer staples and utilities led the market sectors last week, rising 2.73% and 1.92%, respectively.

Meanwhile, the benchmark S&P/ASX 200 Index (ASX: XJO) fell 1.79% to finish the week at 8,786.5 points.

ASX investors are feeling increasingly pessimistic that the war in Iran will end anytime soon.

This was likely a factor behind the support for ASX 200 consumer staples and utilities shares last week.

Consumer staples and utilities are among the most defensive of the 11 market sectors during economic upheaval.

This is because staples and utilities companies have reliable income streams, given they sell essential goods and services.

Another sector considered somewhat defensive is real estate investment trusts (REITs), which lifted 0.14% last week.

The glaring exception among defensives last week was healthcare, a sector that continues to face multiple headwinds.

A 42% dive in Cochlear Ltd (ASX: COH) shares pushed the S&P/ASX 200 Health Care Index (ASX: XHJ) to a 6-year low last week.

Technology also finished just inside the green, as the sector continues its rebound from a prolonged downturn.

Iran war drags on

Oil and gas prices spiked 15% to 18% and ASX 200 shares spent four consecutive days in the red last week.

The world is anxiously awaiting news of when a second round of US-Iran peace talks will begin.

Lucinda Jerogin, Associate Economist at CBA, said:

… fundamentally the situation has not changed; no talks, no fighting and no ships passing through the Strait of Hormuz.

Iran has stated it will neither reopen the Strait nor engage in negotiations until the US lifts its naval blockade.

The longer the Strait remains closed, the greater the costs to the world economy through higher energy prices and supply chain disruptions.

The International Monetary Fund (IMF) has warned of a global recession given the long-tail impact of energy shocks.

In Australia, expectations of higher inflation and more interest rate rises do not bode well for the economy.

The market is factoring in a 69% chance of a rate rise next month. Meanwhile, consumer confidence has tanked.

The Westpac-Melbourne Institute Consumer Sentiment Index recorded its biggest fall in five years this month.

All of these broader macroeconomic concerns likely contributed to support for ASX 200 defensive sectors last week.

Consumer staple shares led the ASX sectors last week

The sector’s largest stock, Woolworths Group Ltd (ASX: WOW), gained 2.99% to finish at $37.89 per share on Friday.

The Coles Group Ltd (ASX: COL) share price rose 2.31% to $23.06.

IGA network owner Metcash Ltd (ASX: MTS) fell 2.76% to $2.82 per share.

Endeavour Group Ltd (ASX: EDV) shares rose 7.36% to $3.50.

The A2 Milk Company Ltd (ASX: A2M) share price edged 0.94% lower to $7.40.

ASX 200 wine share Treasury Wine Estates Ltd (ASX: TWE) lifted 12.22% to $4.50 on news of a revised operating model.

Inghams Group Ltd (ASX: ING) shares fell 0.5% to close at $1.98 on Friday.

Bega Cheese Ltd (ASX: BGA) shares eased 0.51% to $5.87.

Almond food producer Select Harvests Ltd (ASX: SHV) rose 0.54% to $3.75 per share.

Cobram Estate Olives Ltd (ASX: CBO) shares lifted 1.69% to $3.61.

ASX 200 agricultural share Graincorp Ltd (ASX: GNC) increased 0.79% to $6.40.

The Elders Ltd (ASX: ELD) share price fell 2.13% to $7.35.

Stock feed producer Ridley Corporation Ltd (ASX: RIC) lifted 4.46% to $2.81.

The Australian Agricultural Company Ltd (ASX: AAC) lost 2.24% to finish the week at $1.31.

ASX 200 market sector snapshot

Here’s how the 11 market sectors stacked up last week, according to CommSec data.

Over the five trading days:

S&P/ASX 200 market sector	Change last week
Consumer Staples (ASX: XSJ)	2.73%
Utilities (ASX: XUJ)	1.92%
A-REIT (ASX: XPJ)	0.14%
Consumer Discretionary (ASX: XDJ)	0.11%
Information Technology (ASX: XIJ)	0.02%
Industrials (ASX: XNJ)	(0.07%)
Communication (ASX: XTJ)	(0.10%)
Energy (ASX: XEJ)	(0.19%)
Materials (ASX: XMJ)	(2.08%)
Financials (ASX: XFJ)	(2.92%)
Healthcare (ASX: XHJ)	(6.54%)

The post Nervous investors turn to ASX 200 defensives as global energy shock drags on appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Treasury Wine Estates. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates and Woolworths Group. The Motley Fool Australia has recommended Elders. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.