Month: May 2022

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

As fractional share buying has exploded in popularity over the past few years, building a diversified portfolio has never been easier. Generally, a good starting point for well-diversified investors is to buy somewhere around 25 stocks.

However, I go well beyond this threshold for the three reasons we will look at today. In doing so, I run the risk of diversifying too much and simply matching the market’s returns, yet I remain optimistic I can outperform with a more expansive portfolio.

Now, let’s look at why I believe that — and why owning over 100 stocks helps me sleep at night.

FOMO: Fear of missing out

Most people fear letting their portfolio grow too big as it becomes difficult to keep track of all the moving parts. However, I am odd because I am even more scared of missing out on potential multibaggers — even if I don’t have a deep knowledge of them.

What’s more important to me is whether or not a business fascinates me. This fascination can come in many forms. Possibly it’s a financial metric that blows me away. Or perhaps it’s an industry chart that shows a megatrend providing a tailwind for the company’s operations. Or maybe the CEO is an undeniable innovator, and I want to bet on that success.

It can be anything — as long as I’m fascinated. To put it very simply, I would be more heartbroken to see a stock I admire skyrocket without my having any skin in the game than I would be to own it and see it go to zero. While capital preservation may be paramount to some investors, growth is more important to me, regardless of what volatility I may have to face.

But of course — and here’s the big caveat — this strategy definitely isn’t for everybody, and that’s what makes investing unique to each of us and why it is essential to have your portfolio match your temperament.

Adding to my winners

By taking tiny positions (sometimes even $5) in businesses that fascinate me, I do two things:

1. Make sure I don’t forget them.
2. Put some skin in the game, however marginal it may be.

With this little bit of skin in the game, I can let these companies I admire percolate on the back burner. Not forgetting about them — but not worrying about their day-to-day price swings either.

From here, I can add to the position if a stock’s investing thesis becomes more alluring and my knowledge of the company grows. But for the most part, I just let the stocks run on their own.

However, once their stock price doubles, I use that as a natural opportunity to do more research on them and, more importantly, add a little to my holding (once again, perhaps just $5). 

And if it triples, I do the same. And if it quadruples, again the same, and so on until it has grown to a position in my portfolio that requires no further investment (i.e., becomes too large of a holding for me to sleep well at night).

This explanation is a long-winded way of saying I water my flowers (or add to my winners) and let them continue to grow.

The best part about “having” to continue to learn about these winning stocks is that I was already fascinated by them at some point or they wouldn’t be in the portfolio — making the added learning fun and not tedious.

Letting losers fade away

In addition to allowing me to add to my winners over time, owning over 100 stocks also offers natural diversification, allowing my losers to fade away into obscurity in a worst-case scenario.

Look no further than Teladoc Health (NYSE: TDOC) and the huge decline I faced as a shareholder. Yet, even with a considerable 4% portion of my holdings allocated to the company, my portfolio remained flat the following day after the company’s concerning earnings report, thanks to an otherwise strong day in the market and success elsewhere in what I held.

So now what? Well, in Teladoc’s case — nothing. It still accounts for 2% of my portfolio, so it doesn’t necessarily warrant new buying. Down nearly 90% from its all-time highs, there’s no real reason to sell here either.

Am I upset with management? Absolutely! However, I am still fascinated by its ideas and its mission statement “that everyone should have access to the best healthcare, anywhere in the world on their terms.”

With that said, and regardless of your investing temperament, buy what you love, add to your winners, and leave things alone if possible. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why owning over 100 top stocks helps me sleep well at night appeared first on The Motley Fool Australia.

More reading

• 3 ASX shares that could cash in on higher interest rates
• Why the AVZ share price went from being up 19% to down 20% today
• ASX 200 mining shares slump, dragging index into the red
• What’s the outlook for the Telstra share price in May?
• Why did the AFIC share price go backwards in April?

Josh Kohn-Lindquist has positions in Teladoc Health. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Teladoc Health. 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Yesterday, the Australian share market witnessed an event that has not been seen since 2010. For more than 11 years the cash rate has been falling, but now investors are grappling with rising interest rates and their impact on ASX shares.

The Reserve Bank of Australia (RBA) made the call to bump the cash rate up to 0.35% amid higher than expected inflation numbers. While the response had been anticipated for some time, the S&P/ASX 200 Index (ASX: XJO) still slipped on the news.

Now, the challenge for market participants is to find the opportunities that might arise from this situation.

Why certain ASX shares might get a boost

Over the years, interest earned on cash has faded away to the point of being a negligible amount. However, with Governor Philip Lowe remarking that the cash rate could reach 2.5% over the next couple of years, the potential for earned interest is looking more appealing.

The balance sheet of a company has always been important but if rates continue to rise, they might become even more important. In short, debt will become expensive and cash will receive a greater return.

For this reason, let’s review three ASX shares with little to no debt and a tonne of cash stashed away.

IGO Ltd (ASX: IGO)

The first ASX-listed share on our list is also one of the most loaded up with cash. With around $440 million at the end of the March quarter, mining and exploration company IGO holds a considerable amount of cash with zero debt.

In addition, the battery metals miner recorded a solid quarter recently in terms of net profits after tax (NPAT). During the third quarter, IGO raked in $133 million in earnings, representing an increase of 154% from the previous quarter.

However, the IGO share price has been struggling over the last month as the company wrangles with making a bid for Western Areas Ltd (ASX: WSA).

Zimplats Holdings Ltd (ASX: ZIM)

Another ASX share that could be set to capitalise on higher interest rates is Zimbabwean platinum metals group miner Zimplats.

According to the half-year report, the company had approximately US$429 million (A$603 million) in cash and cash equivalents at the end of December. Meanwhile, Zimplats’ debt level is non-existent with $0 owing on the balance sheet.

In the latest quarterly report, Zimplats managed to increase production by 6% while costs only climbed 2% higher.

GQG Partners Inc (ASX: GQG)

Lastly, our final ASX share that could be set to earn some extra interest is boutique asset management firm GQG Partners.

To be clear, this company does not hold hundreds of millions in cash like IGO or Zimplats. Though, at $78.1 million of cash and $0 of debt, the financial operator is still poised to benefit from higher interest rates.

This would be a pleasant turn of events for GQG shareholders, considering the share price is down 15% year-to-date.

The post 3 ASX shares that could cash in on higher interest rates appeared first on The Motley Fool Australia.

More reading

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• Is the IGO share price cheap after dropping 9% in a week?
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• Brokers love these 2 ASX dividend shares right now
• Here are the top 10 ASX mining companies by market cap

Motley Fool contributor Mitchell Lawler 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.

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It has been an incredibly volatile day for the AVZ Minerals Ltd (ASX: AVZ) share price on Wednesday.

After rocketing 19% higher to $1.18 in early trade, the lithium developer’s shares are now down a massive 20% to 79 cents.

What’s going on with the AVZ share price today?

The AVZ share price initially rocketed higher this morning after the company revealed that the Minister of Mines has awarded a mining licence to AVZ’s 75%-owned Dathcom Mining SA business for the flagship Manono Lithium and Tin Project in the Democratic Republic of the Congo (DRC).

The mining licence will cover the entirety of the Roche Dure mineral resource and the Carriere de l’Este exploration target. And while it does exclude a portion of the land holding to the north, AVZ intends to have discussions with the government in the near future regarding this land.

All in all, the company can now advance its early works program ahead of a final investment decision to commence major works and first production toward the later months of 2023.

So why the selloff?

The weakness in the AVZ share price appears to have been driven by some comments at the bottom of its release relating to Manono Project ownership claims.

Under the terms of the joint venture agreement, La Congolaise D’Exploitation Miniere SA (Cominiere), which owns the other 25% of the Dathcom business, will cede 10% of its interest to the DRC Government.

AVZ now wants to acquire the remaining 15% of the interest in Dathcom, which it believes it has the rights to. However, Cominiere has decided to transfer this interest to Jin Cheng Mining Company out of the blue.

So, with AVZ about to sell 24% of its stake in Dathcom to CATH in exchange for a US$240 million cornerstone investment to fund development, the company looks set to have its ownership in the Manono Lithium Project trimmed down to just 51%.

AVZ doesn’t believe this is lawful and intends to fight the claim. Though, how successful it will be is hard to say. After all, the so-called Democratic Republic of the Congo is one of the most corrupt countries in the world according to Transparency International. It ranks 169th out of 180 and sits just a few points away from North Korea.

AVZ commented:

“In relation to the Cominiere Transfer Claim, the Company notes any such purported transfer would be restricted under the terms of the existing shareholders agreement between the Dathcom shareholders and accordingly, any purported transfer of the 15% interest to a third party would be a material breach of the pre-emptive rights contained in the existing Shareholders Agreement owed to AVZI, invalid and of no force or effect.

The Company has considered each of the Dathomir Claim and Cominiere Transfer Claim in detail and believes them to each be spurious in nature, without merit, contain fundamental and material errors, and have no substance or foundation in fact or law. The Company is continuing to take all necessary actions to resist these vexatious and meritless claims and to protect Dathcom’s and its interests, and the Company will consider all options including engaging with the DRC Government and seeking international law remedies.”

The post Why the AVZ share price went from being up 19% to down 20% today appeared first on The Motley Fool Australia.

More reading

• AVZ share price rockets 19% on ‘watershed moment’
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why is it such a mixed day of trade for ASX lithium stocks?

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.

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Some of the ASX’s biggest mining shares are heading south following a trend reversal throughout the day.

The biggest company on the ASX by valuation, BHP Group Ltd (ASX: BHP), is currently down 0.43% to $47.46.

Likewise, Fortescue Metals Group Limited (ASX: FMG) is shedding 2.72% to $20.05, and Rio Tinto Limited (ASX: RIO) is dipping 0.61% to $111.17.

Ultimately, this has weighed on the S&P/ASX 200 Resources Index (ASX: XJR), which is falling 0.77% to 5,714.2 points.

What’s driving the ASX 200 mining shares lower?

There are a couple of reasons why the ASX 200 mining sector is trading in negative territory.

Firstly, the drop in iron ore prices over the past week is providing strong resistance to the resources industry.

Iron ore prices have sunk almost 5% since this time last Wednesday to trade at US$144.08 per tonne.

Furthermore, as COVID-19 continues to spread throughout China, there are fears that the government may enforce a wider lockdown.

It is expected that there will be a reduction in demand from Chinese steel mills in the next few months. This is because the construction sector has been heavily affected by the government’s strict zero-COVID policy.

The property and infrastructure industry comprises roughly 60% of China’s steel needs.

In addition to the ASX 200 mining sector weakness, the well-known phrase “sell in May and go away” could be playing a hand.

Historically, investors tend to offload their shares before tax time, leading to a broad underperformance across the market. Conversely, there is typically a rally after the end of the financial year, with July usually a strong month.

The post ASX 200 mining shares slump, dragging index into the red appeared first on The Motley Fool Australia.

More reading

• After dropping 7% in a month, can the Rio Tinto share price stage a comeback in May?
• Leading brokers name 3 ASX shares to sell today
• Why is the Fortescue share price down 5% on Tuesday?
• Here’s how some of the biggest ASX 200 shares are responding to the RBA’s rate rise
• How did the Fortescue share price stack up in April?

Motley Fool contributor Aaron Teboneras 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.

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The Telstra Corporation Limited (ASX: TLS) share price has climbed 1% in the past month, but can it pick up further in May?

The telecommunication giant’s shares are currently edging into the green at $3.995 apiece, up 0.38% so far today. For perspective, the S&P/ASX 200 Index is 0.08% in the red at the time of writing.

Let’s take a look at the outlook for Telstra.

What’s the outlook for the Telstra share price?

Telstra could be a buy, the team at Morgans believes. Analysts have placed a $4.56 price target on the company’s share along with an add rating. This is an upside of more than 14% on the current share price. Morgans also predicts fully franked dividends per share of 16 cents in FY 2022 and FY 2023.

Telstra was among the top three traded ASX 200 shares on Tuesday. The telco has been undertaking a $1.35 billion buyback program.

In recent news, Telstra has appointed Michael Ackland to the role of chief financial officer. Ackland will take over from Vicki Brady, who has been promoted to CEO of the company.

Ackland is currently serving as consumer and small business group executive and will take on his new challenge from 1 September.

Commenting on the news, incoming CEO Vicki Brady said:

I was thrilled that we were able to appoint an internal candidate to the role. Michael has exceptional credentials and is well placed to continue to drive Telstra’s financial outlook and success

Outgoing CEO Andrew Penn added:

Michael has been instrumental in driving T22 changes, including reducing consumer and small business in-market plans from 1800 to 20, as well as improving consumer and small business customers’ digital experience and decreasing call volumes and complaints.

Telstra is now recruiting for a new consumer and small business group executive.

Last week, Telstra announced it will acquire a 51% stake in streaming box provider Fetch TV. This involved a $50 million investment from Telstra. Fetch has 670,000 active subscribers.

Telstra share price snapshot

The Telstra share price has leapt 14% over the past 12 months, but it has lost nearly 5% year to date.

For perspective, the benchmark S&P/ASX 200 Index has returned more than 3% over the past year.

Telstra has a market capitalisation of more than $46.6 billion based on its closing share price today.

The post What’s the outlook for the Telstra share price in May? appeared first on The Motley Fool Australia.

More reading

• What would happen if Appen shares were removed from the ASX 200? 
• ASX 200 midday update: ANZ higher on results, Flight Centre and JB Hi-Fi sink following updates
• Analysts name 2 blue chip ASX 200 dividend shares to buy
• Is the Wesfarmers share price a buy or a sell in May?
• 5 things to watch on the ASX 200 on Wednesday

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 Corporation Limited. 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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The Australian Foundation Investment Co. Ltd (ASX: AFI) (AFIC) share price went down around 1% in April 2022.

The listed investment company (LIC) is also down by 3.4% since the start of 2022.

What happened in April 2022?

While AFIC has a diversified portfolio, it can drop in value just like any other ASX share.

A LIC’s share price can be influenced by two different things: the underlying portfolio performance of the LIC and changes to the premium/discount that investors are willing to pay for the net tangible assets (NTA) of the LIC.

The S&P/ASX 200 Index (ASX: XJO) also fell by almost 1% during April 2022. So, the AFIC portfolio performed similarly to the ASX 200.

The biggest positions in the AFIC portfolio have the biggest influence on the overall portfolio performance. At the end of March 2022, these were the biggest positions:

Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), CSL Limited (ASX: CSL), Macquarie Group Ltd (ASX: MQG), Transurban Group (ASX: TCL), Westpac Banking Corp (ASX: WBC), Wesfarmers Ltd (ASX: WES), National Australia Bank Ltd. (ASX: NAB) and Woolworths Group Ltd (ASX: WOW).

Over April 2022, the CBA share price dropped 1.8%, the BHP share price fell 7.2% and the CSL share price climbed 1.9%.

Recent investment performance

Every month, AFIC tells investors about its investment performance.

Over the 12-month period to 31 March 2022, the AFIC net asset per share growth plus dividends, including franking, was 11.4%. That underperformed the 16.6% return of the All Ordinaries Total Accumulation Index (ASX: XAOA), including franking.

The last five years also show underperformance by AFIC, with an average portfolio of 10.6% compared to the 10.7% return of the index.

However, beating the index isn’t the LIC’s stated investment objective. It says:

AFIC aims to provide shareholders with attractive investment returns through access to a growing stream of fully franked dividends and enhancement of capital invested over the medium to long term.

The LIC says that its investment style is long-term, fundamental and ‘bottom-up’. Its annual management cost is 0.14%, with no performance fees.

AFIC share price premium or discount?

Investors get a monthly update about whether AFIC shares are trading at a premium or a discount.

At the end of March 2022, the AFIC share price was at a premium of more than 10%, though the size of the premium has reduced over the last couple of months. It has been a while since the AFIC share price was last trading at a discount to its NTA.

The post Why did the AFIC share price go backwards in April? appeared first on The Motley Fool Australia.

More reading

• Could AFIC shares be an ASX inflation hedge?
• Do AFIC shares trade at a discount right now?
• How is AFIC different from an ASX 200 ETF?
• Why has the AFIC share price leapt 5% in 4 weeks?

Motley Fool contributor Tristan Harrison 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 CSL Ltd. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. 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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Bitcoin (CRYPTO: BTC) represents different things to different people.

Launched way back in January 2009 by a person or people going under the name Satoshi Nakamoto, the world’s first crypto is sometimes lauded as a financial equaliser. One whose decentralised nature takes control from established financial institutions and is free from government manipulation.

But not everyone agrees with this rosy take.

Just say no

Over the weekend legendary investor Warren Buffett and his long-time right hand man Charlie Munger hosted Berkshire Hathaway’s annual shareholder meeting.

With cryptos gaining mainstream traction across the globe, their opinions on Bitcoin came up.

As Bloomberg reports, Buffett said he’s not sure what to do with the likes of Bitcoin and other cryptos.  According to the Oracle of Omaha, crypto assets aren’t productive like real estate or farmland.

Munger, well-known for his disdain of cryptos, said, “When you have your own retirement account and your friendly adviser suggests you put all your money into Bitcoin, just say no.”

“In my life I try and avoid things that are stupid, and evil and make me look bad in comparison with somebody else. Bitcoin does all three,” he added.

If not cryptos then what?

Buffett and Munger couldn’t have been clearer on their dislike of Bitcoin.

But with resurgent inflation, rather than speculating on stocks like you’re in a casino or investing in digital assets that you may not understand, Buffett recommended (quoted by Bloomberg):

The best investment by far is anything that develops yourself. If you’re the one they pick out to do any particular activity – sing or play baseball or be their lawyer, whatever it may be – whatever abilities you have can’t be taken away from you. They can’t actually be inflated away from you.

How has Bitcoin been tracking?

Crypto investors would have done well to take Warren Buffett’s advice this year.

So far in 2022, the Bitcoin price is down 20%, according to data from CoinMarketCap.

The world’s leading crypto is currently down 45% from its 10 November all-time highs of US$68,790.

The post ‘Stupid and evil’. Warren Buffet and Charlie Munger unload on Bitcoin appeared first on The Motley Fool Australia.

More reading

• Why Bitcoin, Ethereum, and Coinbase Jumped Today
• The top 2 cryptos of April unmasked
• What happened with the Bitcoin price in April?
• Why Shiba Inu, Ethereum, and Dogecoin are sinking today
• Crypto king Bitcoin to be dethroned by this hot rival: experts

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. 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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The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is pushing higher on Wednesday.

In afternoon trade, the banking giant’s shares are up 0.6% to $27.43.

Why is the ANZ share price pushing higher?

The catalyst for the rise in the ANZ share price today has been the release of a half-year result that revealed earnings ahead of the market’s expectations.

According to the release, the bank reported cash earnings from continuing operations of $3,113 million. This represents a 4% increase over the prior corresponding period but a 3% decline on the second half of FY 2021.

It was also well-ahead of what analysts at Goldman Sachs were expecting from the bank thanks to lower bad and doubtful debts (BDD).

Goldman commented: “ANZ reported 1H22 cash earnings (company basis) from continued operations of A$3,113 mn, which was up 4.1% on pcp and 4.6% ahead of GSe, with the beat driven by outperformance on the BDD charge.”

And while ANZ’s CET1 ratio, which fell 81 basis points to 11.53%, was softer than the broker was expecting, it hasn’t been enough to stop the ANZ share price from rising today.

Finally, ANZ’s fully franked interim dividend of 72 cents per share was in line with expectations.

Analyst call takeaways

Goldman Sachs also released a separate note with key takeaways from its analyst call.

Starting with a positive, ANZ spoke positively about its net interest margin.

Goldman said: “ANZ believes its solid 2H22 margin performance was achieved through discipline in new lending pricing through the half, as well as deposit repricing. While, price competition in AU and NZ remained intense, ANZ saw a material decline of flows into fixed rate lending through (26% in Mar-22 vs period average of 41%). “

A negative, which could impact broker valuations for the ANZ share price in the coming days, related to its cost base.

The broker advised that the bank is effectively scrapping its $8 billion cost base target by FY 2023.

It explained: “ANZ no longer believes the current environment is supportive of having an absolute cost target and so it is effectively walking away from its A$8 bn exit run-rate cost base by FY23E. Furthermore, ANZ expects its 2H22 costs to be about in line with 1H.”

“Management would not be drawn on where both run-the-business and investment spend will ultimately settle at but does expect that the extent to which investment spend is expensed will be more consistent with 1H22 levels (i.e. 88%) than historical levels (70-75%) given the nature of investment going forward will be less about building assets, and focus more on cloud-based enterprises.”

Are ANZ’s shares in the buy zone?

As things stand, Goldman Sachs sees a lot of value in the ANZ share price. It currently has a buy rating and $32.51 price target on the bank’s shares.

However, as mentioned above, once analysts have updated their financial models, this recommendation and valuation could change.

The post ANZ share price rises after half-year earnings beat appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: ANZ higher on results, Flight Centre and JB Hi-Fi sink following updates
• Why ASX 200 bank shares are in the spotlight
• ANZ share price on watch amid $3.1bn half-year cash profit
• 5 things to watch on the ASX 200 on Wednesday
• Here’s how some of the biggest ASX 200 shares are responding to the RBA’s rate rise

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.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Becoming a millionaire may seem like a fantasy when you’re working hard to cover the bills. But the good news is you don’t need a huge paycheck or a winning lottery ticket to amass a seven-figure nest egg by the time you reach retirement age.

In fact, by following just four simple steps, you should be able to save at least $1 million to help support you in your later years. Here’s what those steps are. 

1. Start investing early

It’s much easier to save $1 million if compound growth helps make it happen. When you begin investing, the money you’ve contributed to your account starts to produce returns. Those returns can be reinvested. When that happens, your account balance grows without any further intervention from you.

The sooner you begin investing, the more your returns can multiply over time and grow your balance. Say, for example, you invest $100 and earn a 10% return. By the end of the year, you’d have made $10 and would have $110. The subsequent year, if you earned the same 10% return, you’d make an $11 profit instead of a $10 one because your returns would be earning money for you as well. 

Compound growth is powerful. If you begin investing at age 20 and benefit from 45 years of compounding, you could end up with a $1 million nest egg by contributing just $115.91 per month to your account (if you earned an average 10% annual return). But if you waited until age 40 and had just 25 years of growth, you would have to contribute $847.33 per month to amass $1 million. 

Obviously, you can’t go back in time and begin investing at 20 if you’re already past that age. But if you want $1 million saved, start working on that goal the minute you can. 

2. Calculate how much to invest each month

Breaking big goals down into small ones is the easiest way to accomplish them. So start from the premise that you want $1 million saved by a specific age, such as 65. Then break this big goal down by determining how much to invest each month to reach your target.

Investor.gov has a savings goal calculator that can help you calculate the requisite monthly contributions based on projected returns and the date you want your $1 million to be available. 

3. Automate retirement account contributions

If you want to be sure you reach your savings goal, you must be consistent with investing your target amount. The best way to do that is to make the process automatic so you don’t have to manually make the decision to invest each month.

If you arrange to have contributions taken directly from your paycheck or to transfer the required amount of money directly from your bank to your brokerage firm each day you get paid, this maximizes the chances that you’ll stick with your plan to become a millionaire retiree. You’ll be far less likely to skip a month of saving if it happens without your intervention. 

4. Build a diversified portfolio

Finally, you’ll want to make sure you’re invested in a good mix of different assets that limit your risk while still giving you the potential to earn reasonable returns. If you’re good at selecting stocks, you can build a diversified portfolio yourself by spreading your money around and buying shares of companies across many industries.

If you don’t know how to choose a good mix of varying investments, diversification is easier with exchange traded funds (ETFs). You can select an ETF that gives you exposure to 500 of the largest US companies across all different fields by buying an S&P 500 index fund. Or you can buy several ETFs, including one investing in small companies, another in large ones, a third in bond funds, a fourth in real estate, and a fifth in emerging markets. 

By following these four steps, you can make certain you’re investing enough and earning generous enough returns that becoming a millionaire retiree is easily within reach.

 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post How to all but clinch a millionaire retirement appeared first on The Motley Fool Australia.

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The Origin Energy Ltd (ASX: ORG) share price surged to a new post-pandemic high today despite the company’s silence.

Making its gains more impressive, the broader market is trading lower this afternoon. Origin Energy’s home sector – the S&P/ASX 200 Utilities Index (ASX: XUJ) – is also in the red.

At the time of writing, the Origin Energy share price is $6.93, 0.29% higher than its previous close.

However, it reached a new multi-year high of $7.08 earlier today, representing a 2.46% gain.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently 0.09% lower.

Let’s take a closer look at what’s going on with Origin Energy and its utility peers on Wednesday.

What’s boosting the Origin share price today?

The Origin Energy share price is in the green alongside some of its ASX 200 peers today.

Of the ASX 200’s 11 sectors, only four are currently trading in the green.

Sadly, the ASX 200 utilities sector isn’t among them. It’s recording a 0.14% slip right now.

The index’s other constituents are recording a poor performance this afternoon.

The share price of APA Group (ASX: APA) has slumped 0.09%. Meanwhile, that of AGL Energy Limited (ASX: AGL) has fallen 1.2%.

This year so far has been a good one for both the Origin Energy share price and the company’s bottom line.

The energy producer and retailer revealed its revenue for the March quarter had more than doubled year-on-year to surpass $2.5 billion last week. The increase was driven by higher commodity prices amid surging demand.

Right now, Origin Energy’s stock is trading for 29% more than it was at the start of 2022. It has also risen 65% since this time last year.

The post How is the Origin Energy share price managing to hit multi-year highs today? appeared first on The Motley Fool Australia.

More reading

• Origin share price gains as surging commodity prices boost revenue to $2.5b
• How might the election outcome impact the outlook for ASX energy shares?
• 3 ASX 200 stocks smashing 52-week highs today
• Are Origin Energy shares really trading on a 3% dividend yield?
• Why is the Origin Energy share price having such a dire day?

Motley Fool contributor Brooke Cooper 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 positions in and has recommended APA Group. 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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