Day: December 20, 2022

Why did the Arafura Rare Earths share price dive 9% on Tuesday?

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share priceA man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price

The All Ordinaries Index (ASX: XAO) had a fairly dreadful day of red ink this Tuesday. By the end of the trading session, the All Ords had slipped by a nasty 1.66%, putting the index at 7,199.6 points. But that loss pales in comparison to the performance of the Arafura Rare Earths Ltd (ASX: ARU) share price.

Arafura Rare Earths shares had an absolute shocker today. The rare earths share started the session at 48 cents a share, but ended the trading day at just 44 cents a share, a fall worth a whopping 9.37%.

So what went so wrong with Arafura that might have caused this sharp share price fall?

Why did the Arafura share price tank 9% on Tuesday?

Well, it’s hard to say. It certainly wasn’t sparked by anything out of Arafura itself, seeing as the company hasn’t made any ASX announcements today.

We did see some falls with many of Arafura’s compatriots though. Its fellow rare earths producer Lynas Rare Earth Ltd (ASX: LYC) fell by close to 3%. And lithium shares like Pilbara Minerals Ltd (ASX: PLS) and Core Lithium Ltd (ASX: CXO) had fairly depressing days as well.

But none of these shares fell by almost 10%.

So perhaps my Fool colleague James’ recent theory of profit-taking is the most likely explanation here. Although Arafura had an awful day today, it has hardly put a dent in this company’s stellar run this year.

Even after today’s near-10% drop, the Arafura share price remains up an incredible 89% or so in 2022 thus far. The company is also up an even more impressive 141% over the past 12 months, including by 45% in the past six:

Thus, it’s possible that, with the broader market taking a bit of a hit this December, investors are getting nervous and pulling some of these profits off the table.

At the last Arafura share price, this ASX All Ords rare earths share has a market capitalisation of $953.54 million.

The post Why did the Arafura Rare Earths share price dive 9% on Tuesday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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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3 reasons to buy the Vanguard MSCI Index International Shares ETF (VGS) before 2023

ETF written on cubes sitting on piles of coins.

ETF written on cubes sitting on piles of coins.

The exchange-traded fund (ETF) Vanguard MSCI Index International Shares ETF (ASX: VGS) has been on a rollercoaster ride this year. At one point it was down over 20% in the year to date, though it has recovered a little since then.

This offering from Vanguard is one of the most compelling passive ways to invest in the global share market in my opinion.

For investors that haven’t heard of Vanguard, it’s an organisation that offers investment funds, like ETFs. A key point of difference with Vanguard is that it aims to offer its funds for as little cost as possible because the owners of Vanguard are the investors themselves. Vanguard shares the profit in the form of lower management fees.

This ETF specifically looks to provide “exposure to many of the world’s largest companies listed in major developed countries.” The idea is that it’s invested in over 1,000 businesses outside of Australia, to get exposure to those international economies.

With that in mind, here are three reasons why it could be a good time to invest in the Vanguard MSCI Index International Shares ETF:

Lower valuation

Part of investing is about choosing an investment that can grow well over time. But, a key element of the return is the purchase price. So, for whatever investment we’re looking at, it’s obviously better to buy it at a lower price.

The share market doesn’t fall over 10% for no reason, the higher interest rates and elevated inflation are justifiably hitting businesses in different ways.

But, I think the fact that it’s down around 15% makes it much more interesting. When something declines by 15%, getting back to the same level would be a rise of 18%.

Great holdings

When investing, I think it’s important to go for quality businesses or assets that can do well even during a downturn. When the going gets tough, it’s the low-quality stuff that could quickly get into trouble.

Looking at the holdings in the Vanguard MSCI Index International Shares ETF, these are some of the strongest national, or even global names, within the 1,460-plus positions in the portfolio.

The top 10 holdings are: Apple, Microsoft, Alphabet, Amazon.com, Tesla, UnitedHealth, Johnson & Johnson, Exxon Mobil, Nvidia and Berkshire Hathaway. I’d be happy to own most of those names myself, so I’d be happy to have a portfolio with them. All of this diversification comes with a low management fee of 0.18%.

Don’t try to time the market

If investors are regularly investing in the Vanguard MSCI Index International Shares ETF, then I don’t think they should be put off by changes in the unit price.

A regular investment plan can take out the guesswork, and trying to time the market could mean missing out on opportunities and long-term growth.

To the end of November 2022, the ETF had returned an average return per annum of 10.2% over the prior five years. I’m not sure what the future holds in terms of the returns, but, a return on equity (ROE) of just over 18% is promising for long-term double-digit returns.

The post 3 reasons to buy the Vanguard MSCI Index International Shares ETF (VGS) before 2023 appeared first on The Motley Fool Australia.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 Alphabet, Amazon.com, Apple, Berkshire Hathaway, Microsoft, Nvidia, Tesla, and Vanguard Msci Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet, Amazon.com, Apple, Berkshire Hathaway, Nvidia, and Vanguard Msci Index International Shares ETF. 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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Here are the top 10 ASX 200 shares today

Three excited business people cheer around a laptop in the officeThree excited business people cheer around a laptop in the office

The S&P/ASX 200 Index (ASX: XJO) plummeted in afternoon trade amid the release of the minutes from the Reserve Bank of Australia’s (RBA) latest meeting. The index closed Tuesday’s session 1.54% lower at 7,024.3 points.

Also likely driving the market lower were announced changes to the Bank of Japan’s monetary policy. The central bank has decided to modify the conduct of yield curve control.

Meanwhile, the RBA revealed it considered both hiking rates by 0.5% and keeping them flat amid continuous inflation at its last meeting of 2022. Of course, it ultimately declared a 0.25% hike earlier this month.

The S&P/ASX 200 Energy Index (ASX: XEJ) outperformed for much of today following a strong night’s trade for oil prices. However, by the end of Tuesday’s trade, it had dropped 1.4%.

Coming in as today’s top-performing sector was instead the S&P/ASX 200 Utilities Index (ASX: XUJ), which dropped 0.1%. The worst performer, meanwhile, was the S&P/ASX 200 Information Technology Index (ASX: XIJ). It fell 4.4%.

So, with all that in mind, which ASX 200 shares come in as today’s top performers? Keep reading to find out.

Top 10 ASX 200 shares countdown

The index’s biggest gains today were posted by shares in Steadfast Group Ltd (ASX: SDF). That was despite no news having been released by the insurance broker.

Today’s biggest gains were made by these shares:

ASX-listed company Share price Price change
Steadfast Group Ltd (ASX: SDF) $5.44 2.06%
AUB Group Ltd (ASX: AUB) $22.59 1.99%
AGL Energy Limited (ASX: AGL) $8.03 1.77%
Oz Minerals Ltd (ASX: OZL) $27.79 1.42%
Orica Ltd (ASX: ORI) $15.43 1.11%
Bendigo and Adelaide Banking Ltd (ASX: BEN) $9.59 1.05%
Silver Lake Resources Limited (ASX: SLR) $1.22 0.83%
Suncorp Group Ltd (ASX: SUN) $11.83 0.42%
Pendal Group Ltd (ASX: PDL) $4.90 0.41%
Australia and New Zealand Banking Group Ltd (ASX: ANZ) $23.79 0.3%

Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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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 positions in and has recommended Steadfast Group. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank and Steadfast Group. The Motley Fool Australia has recommended Aub 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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I’d buy these 3 ASX 200 shares in 2023 and hold them for a decade

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.

Since we’re now barreling towards the end of 2022, it’s a good time to look to 2023 and the ASX 200 shares that investors might want to buy next year.

The legendary investor Warren Buffett once said that his favourite length of time to own a share is forever. So with that sentiment in mind, here are three ASX 200 shares that I think investors can comfortably buy next year and hold for at least a decade.

3 ASX 200 shares to buy in 2023 and hold for a decade

Coles Group Ltd (ASX: COL)

Coles might not be the most exciting ASX 200 company out there. But that’s exactly why I think this share could be a long-term winner.

Coles is a dominant supermarket chain that supplies millions of Australian households with food, drinks, and other household essentials. I don’t see any reason why Coles won’t be fulfilling this role for a larger Australian economy in a decade’s time.

Coles is also a formidable ASX 200 dividend payer, offering investors a fully franked dividend yield close to 4% right now. Some brokers are expecting these dividends to rise materially over at least the next few years too.

Telstra Group Ltd (ASX: TLS)

Next up is another ASX 200 name we’d probably all be familiar with. Telstra is the most dominant telco in the country, with market share statistics across both fixed-line and mobile communications that are the envy of its rivals.

It’s probably fair to say that internet usage is only going to keep rising over the coming decade. And you can bet that Telstra will be one of its key facilitators. This is a company that I see as having a recession-proof earnings base, thanks to the inelasticity of demand for internet services.

The recent restructuring could also provide an avenue to a higher valuation thanks to the importance of its core assets like its mobile towers. Telstra also offers a strong, fully franked dividend, which is over 4% right now as well.

Westpac Banking Corp (ASX: WBC)

Finally, let’s check out the ASX 200 banking giant Westpac. As a member of the elite big four banks, Westpac has a firmly-established share of the banking and financial services market in Australia.

If the Australian economy is larger in ten years than it is today (which is highly likely if we look to history), it’s a good bet that Westpac will be too, thanks to the pivotal role the big four plays in the financial fabric of this country.

Westpac has paid strong dividends for most of its history, and again, some ASX brokers think that its current dividends (currently offering more than a 5% fully-franked yield) will keep growing for at least a few years. 

All in all, Westpac is the third share that I think an investor can comfortably buy in 2023 and hold for at least the coming decade.

The post I’d buy these 3 ASX 200 shares in 2023 and hold them for a decade appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Telstra Group. 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 Coles Group and Telstra Group. The Motley Fool Australia has recommended Westpac Banking. 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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