Sometimes it can be hard to decide which ASX shares to buy. Especially if you’re wanting to make long-term buy and hold investments.

The good news is that exchange traded funds (ETFs) are here to the rescue. These are financial instruments that allow investors to put their money into diverse groups of shares through a single investment.

But which ETFs would be good buy and hold options? Two to consider are listed below:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

It’s hard to look past the BetaShares NASDAQ 100 ETF when you’re talking about buy and hold investing.

That’s because this ETF gives investors easy access to the 100 largest non-financial stocks on the NASDAQ stock exchange.

These are many of the highest quality companies in the world that look likely to dominate the business world long into the future. This includes names such as Alphabet (Google) Amazon, Apple, ASML, Meta (Facebook), Microsoft, Netflix, Starbucks, Nvidia, and Tesla.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

If your focus is more on income, then you might want to consider the Vanguard Australian Shares High Yield ETF.

As you might have guessed from its name, this ETF aims to provide investors with big dividends year in, year out.

Rather than focusing on the dividends that have been and gone, this ETF leverages broker research to identify the ASX shares that are forecast to provide the biggest dividend yields over the next 12 months. It then brings these together into a diverse portfolio designed to offer a higher than average yield.

Among its holdings at present are Rio Tinto Ltd (ASX: RIO), Telstra Corporation Ltd (ASX: TLS), and Westpac Banking Corp (ASX: WBC). Combined with other holdings, they are collectively expected to provide a forward dividend yield of 5.4%.

The post These ETFs could be top options for buy and hold investors appeared first on The Motley Fool Australia.

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More reading

• How I’d aim to retire rich enough to live on passive income from my ASX dividend shares
• 2 ASX 200 bank shares to buy after the selloff: experts
• Here are the 3 most heavily traded ASX 200 shares on Friday
• ASX 200 bank stocks lift after Credit Suisse share price soars 19%
• How to generate $500 of monthly income from Rio Tinto shares

Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF and Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF and Telstra Group. The Motley Fool Australia has recommended Vanguard Australian Shares High Yield ETF and 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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Warren Buffett is one of the richest people in the world. He started at a young age and has built a huge amount of wealth by being frugal and investing for the long term in businesses that can compound over many years.

While there is plenty to worry investors about, I think now can prove to be a great time to invest despite the inflation, banking concerns in the United States and Europe, and so on. Share prices don’t fall heavily for no reason – it’s only when there are real concerns that the market goes noticeably backwards.

Indeed, Warren Buffett said one of the world’s often-quoted pieces of advice about investing:

Be fearful when others are greedy, and greedy when others are fearful.

As individual investors, we can’t control what management teams will do in their businesses. However, we can control when we invest and the price we pay. It’s times like this that can open up much-cheaper prices for some of the best investments out there.

Invest like Warren Buffett

Warren Buffett hasn’t precisely told investors what his formula is for investing. But, he has revealed a number of factors that he keeps in mind.

He typically stays within his ‘circle of competence’. What that means is that he only invests in businesses and industries that he understands. I think it keeps things simpler, it makes it easier to understand if things are going well, and it may mean it’s easier to know when to sell.

Buffett also likes to find value, he says it’s best to invest in great businesses at fair prices rather than trying to invest in fair businesses at cheap prices. He also likes those businesses to have a strong economic moat, or a strong competitive advantage. That means they’re more resilient to competitors trying to ‘invade’ and hopefully strong enough to get through times like this unscathed.

When there is widespread fear in the market, it gives investors the chance to buy almost every investment at a cheaper price. As the investment environment recovers, as it always has in the past, share prices can then rise.

How to build a $1 million portfolio starting at 40

Between 1965 to 2022, Warren Buffett’s company Berkshire Hathaway has returned an average of around 20% per year. However, the last five years haven’t been as solid as that because it becomes increasingly difficult to perform strongly as the portfolio becomes bigger.

It wouldn’t be easy for you and me to try to achieve gains like that. So, just achieving a return of 10% per annum could turn out very well for wealth-building at the starting age of 40. Or any age for that matter.

Investing $500 a month, returning an average of 10% per annum, would turn into $590,000 after 25 years – taking the investor to 65 years old.

If we bump that up to investing $1,000 per month, it would become $1.18 million after 25 years if it returned an average of 10% per annum.

That’s not quite the same wealth as Warren Buffett, but it’d achieve an adequate lifestyle for investors.

However, remember that investing in great businesses can still mean volatility. Just look at what has happened to the Wesfarmers Ltd (ASX: WES) share price in recent times.

But, just because a share price moves down in the short term doesn’t mean that the company has turned rubbish. There will likely be market declines over a 25-year period, but those could be the best times to buy.

The post No savings at 40? Use the Warren Buffett method in 2023 to target financial freedom appeared first on The Motley Fool Australia.

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More reading

• How to generate $10,000 of passive income from Fortescue shares
• Which real estate ASX shares should you buy now as interest rates top out?
• How I’d aim to retire rich enough to live on passive income from my ASX dividend shares
• Buy Macquarie and this high yield ASX dividend share: brokers
• 2 ASX 200 bank shares to buy after the selloff: experts

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 Berkshire Hathaway. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Berkshire Hathaway. 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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Fortescue Metals Group Ltd (ASX: FMG) shares are a popular option for income investors.

This is because the mining giant returns a good portion of its earnings to shareholders in the form of dividends each year.

The good news is that another big dividend yield is expected from the miner this year based on its current share price.

So, what would it take to get $10,000 of passive income from Fortescue shares?

Passive income from Fortescue shares

According to a recent note out of Goldman Sachs, its analysts are forecasting a US$1.18 (A$1.76) per share fully franked dividend in FY 2023.

Based on the current Fortescue share price of $21.42, this will mean a yield of 8.2%. This is more than double the Australian share market’s typical average dividend yield.

With that in mind, in order to generate $10,000 of passive income, you would need to buy approximately 5,682 Fortescue shares. This equates to a sizeable investment of almost $122,000.

A word of warning

It is worth noting that this level of income may not last. This is due to Fortescue’s huge decarbonisation spend, which is expected to consume a significant portion of its free cash flow and weigh on its dividends.

For example, Goldman is forecasting dividends of only 62 US cents (A$0.92) per share in FY 2024 and then 40 US cents (A$0.595) per share in FY 2025.

This means that for those two financial years investors would receive paychecks of approximately $5,230 and $3,380, respectively.

It’s partly for this reason that Goldman has a sell rating and $15.50 price target on Fortescue shares. Which, incidentally, suggests that your $122,000 original investment could reduce to just over $88,000.

Lower income and capital losses are not a great mix even if the current yield is attractive.

The post How to generate $10,000 of passive income from Fortescue shares appeared first on The Motley Fool Australia.

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More reading

• Is it time to buy ASX 200 iron ore shares right now?
• Fortescue share price marching higher as green hydrogen plans heat up
• Are Fortescue shares back on the menu amid job cuts?
• Could buying Fortescue shares at under $22 make me rich?
• How can I hope to retire rich when the share market is falling?

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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Many experts are thinking that the Reserve Bank of Australia (RBA) might put a stop to interest rate hikes in the near future.

After ten consecutive months of torture for consumers and businesses alike, a Finder survey earlier this month showed 55% of economists thought the RBA would hold its cash rate next month.

“We are likely nearing the end of this rate rise cycle,” said Mortgage Choice economist Anthony Waldron.

Over the last few days, with banks in the US failing and Credit Suisse Group AG (SWX: CSGN) in Europe looking wobbly, the odds of interest rates topping out have firmed even more.

Naturally, when interest rates stop rising, the real estate market breathes a sigh of relief.

Shaw and Partners portfolio manager James Gerrish recently took a look at three popular real estate sector ASX shares to determine whether he would buy into them.

‘Long and bullish’

Goodman Group (ASX: GMG), as an industrial property group, was a huge COVID-19 beneficiary as e-commerce clients sought warehousing space to fulfil higher demand.

However, the share price has cooled off to the tune of 27.6% since the end of 2021. Goodman Group closed Friday at $18.98.

Gerrish noted in a Market Matters Q&A that the stock has an estimated forward price-to-earnings ratio of 21.2 and dividend yield of 1.4%.

“We remain long and bullish Goodman Group in our flagship growth portfolio, with an initial target ~$22, over 10% higher.”

Shares for commercial property outfit Charter Hall Group (ASX: CHC), after falling 22% over the past year, finished Friday at $11.77.

Ths stock has an estimate of 13.75 PE ratio and 3.1% dividend yield, according to Gerrish.

“We like Charter Hall under $13 as an ‘accumulate into weakness’.”

Dexus Property Group (ASX: DXS) is best known for its office real estate holdings, which suffered during the pandemic as workers worked from home. The share price is down almost 40% from its pre-COVID high.

The end of lockdowns doesn’t seem to have helped either, with the stock plunging more than 25% over the last 12 months.

Dexus shares closed Friday at $7.84.

“We remain long and bullish in the Market Matters active income portfolio with February’s strong report reinforcing this outlook,” said Gerrish.

“Our initial target is ~$9.50, around 10% higher.”

According to Gerrish’s team, Dexus is forecast to hit a PE ratio of 13.1 and pay out a tidy dividend yield of 6.1%.

Gerrish reckons that the RBA is “too positive in its assumptions around the health of the Australian economy” and thus “too hawkish”.

“Rates, in our view, will not reach the height that markets are currently pricing in, so the headwind on valuations from sharply higher yields may ease.”

The post Which real estate ASX shares should you buy now as interest rates top out? appeared first on The Motley Fool Australia.

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More reading

• Analysts say these ultra high quality blue chip ASX 200 shares are buys
• Why now is a golden opportunity to earn passive income from Aussie real estate
• Experts say these fantastic blue chip ASX 200 shares are buys
• Why you need defensive ASX shares in your portfolio right now: WAM
• Boost your portfolio with these blue chip ASX 200 shares in March: experts

Motley Fool contributor Tony Yoo 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 recommended Goodman 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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