The S&P/ASX 200 Index (ASX: XJO) has been on a rollercoaster ride to start the year and we’ve already seen one ASX share market crash.

We’re less than halfway into 2020 and we’ve already seen a bear market, pandemic, oil price war and record government stimulus.

But despite some obvious headwinds, the ASX 200 has bounced back strongly in April and May. Investors are starting to get spooked as ASX shares climb back to where they were in mid-February.

So, if we were to see another ASX share market crash, what’s the best way to deal with it?

Don’t panic in an ASX share market crash

If a crash has already occurred, it’s too late to cash out. Selling out during a downturn can chrystallise your losses and reduce any potential upside.

That means it’s best to keep calm and carry on if the market has a downturn. This way you can keep your eye on the long-term prize and stay cool under pressure.

Trust in diversification

There’s a reason why diversification is key. While it can be tempting to load up on a growth share like Altium Limited (ASX: ALU) and hope for the best, portfolio construction is critical.

If we see another ASX share market crash in 2020, it’s best to have a portfolio ready to spread the risk. That means having enough investments across individual companies and sectors to weather the storm.

Don’t overinvest in ASX shares

An ASX share market crash creates buying opportunities for savvy investors. While it’s tempting to buy, buy, buy, it is a short-sighted mindset.

Make sure you only invest what you can afford to lose. No matter how good an ASX share price is, you don’t want to overinvest and commit too much capital.

The worst thing you can do as a long-term investor is be forced to sell early to cover short-term expenses.

More reading

• Where will the Telstra share price be next year?
• 3 ASX shares Warren Buffett couldn’t ignore today
• What would $50,000 invested in the ASX 200 a decade ago be worth today?
• Is the Transurban share price a buy today?
• Should you ever buy ASX shares at an all-time high?

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Experience Co Ltd (ASX: EXP) share price is flying higher in morning trade, up 17.24% at the time of writing to 17 cents.

Experience Co is a provider of adventure tourism and leisure experiences in Australia and New Zealand. These experiences include skydiving, island day trips, and reef tours. The company’s operations are located predominantly on the eastern seaboard of Australia from the Great Ocean Road in Victoria to Queensland’s Port Douglas. It also has skydiving operations in Queenstown, New Zealand.

Despite getting off to an impressive start after listing in 2017, Experience Co shares haven’t had the best run on the ASX to date – falling from around 88 cents in December 2017 on the back of weak tourism conditions, poor weather events, and the resignation of its CEO.

Why has the Experience Co share price bounced today?

This morning, Experience Co released a market update in regard to the impact of COVID-19 on its operations. The company had previously announced the indefinite suspension of all operations on 23 March.

According to today’s release, operations have resumed at Experience Co’s Queenstown skydiving drop zone. The company is also aiming to resume operations at a number of Australian-based drop zones during June.

On the whole, experiences will be activated on a breakeven basis, staged over the coming months in line with the relevant jurisdictional lifting of restrictions.

In terms of financial stability, the company believes it is well-positioned to sustain an extended period of hibernation with $10 million cash on its books as at 30 April 2020. It also has an additional $15 million undrawn capacity on its debt facility with National Bank of Australia Ltd (ASX: NAB) and facility agreement waivers in place in relation to covenant testing for the 30 June 2020 testing period.

Assuming operations are suspended and there are no material changes in market conditions, Experience Co is anticipating its minimum monthly net cash outflow to average approximately $1 million per month to 30 September 2020.

As for wages, the company has triggered job subsidy programs in both Australia and New Zealand. The respective programs have been implemented for 360 eligible employees in Australia and 78 employees in New Zealand. Meanwhile, senior executives and board members have taken a 30% reduction in remuneration until 30 June 2020.

Experience Co has also been supported by lease cost relief with the co-operation of its landlords. As a result, monthly lease expenses through a combination of waivers and deferrals have been reduced. This includes 100% rent relief for Ports North and fees and charges in its Great Barrier Reef business until 31 December 2020.

Looking forward, Experience Co noted the continuation of its strategy for business simplification. It described the divestment of its Hunter Valley and Byron Bay Ballooning businesses as “well progressed” and cited other surplus asset sales processes are ongoing.

Additionally, Experience Co highlighted that good headway has been made on business process projects. This includes implementing a new reservations system for the skydiving business and process improvements across corporate functions.

Management commentary

Commenting on today’s update, CEO John O’Sullivan said:

“The EXP team has been working extremely hard to design and implement COVID-19 operational processes and procedures since the Australian and New Zealand Government regulations came into effect. We are cautiously excited about recommencing our operations all the while recognising that the emergence is likely to be protracted and will require a sustained level of resilience across the business. Our goal remains to maintain a viable business and balance sheet, positioning EXP for when conditions improve.”

“At the time of suspending operations we noted that we were not in a position to forecast with any level of certainty the duration nor recovery profile from this pandemic. This remains the case and our continued strategy is to minimise short-term cash outflows,” he added.

More reading

• Where to invest $10,000 into ASX shares immediately
• Why Beach, Jumbo, ResMed, & WiseTech Global shares are dropping lower
• Why you shouldn’t fear an ASX share market crash
• Where will the Telstra share price be next year?
• Why the Blackmores share price is charging higher today

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of EXPERNCECO FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Experience Co share price is flying 17% higher today appeared first on Motley Fool Australia.

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The Telstra Corporation Ltd (ASX: TLS) share price has slumped lower in 2020 but where is it headed in the next year?

What’s been happening with Telstra in 2020?

It’s been a bit of a rollercoaster for Telstra shareholders in recent years.

In fact, the Aussie telco’s share price has shed over 48% in the last 5 years including nearly 10% this year. However, the S&P/ASX 200 Index (ASX: XJO) is down 11.58%, at the time of writing. This means Telstra is actually outperforming right now.

Notwithstanding, the recent share price falls are largely as a result of increased competition from NBN Co which has hit Telstra’s earnings hard.

Telstra has also changed its dividend policy in recent periods. This comes after having famously paid out close to 100% of profits throughout the 2000s.

This change, along with the coronavirus pandemic, has spooked investors and sent the Telstra share price tumbling. That means the Aussie telco could be in the buy zone at $3.22 per share.

I think the current climate could accelerate Telstra’s transformation plans. The Telstra 2022 strategy was designed to slash costs and make Telstra into a more focused, efficient telco.

While COVID-19 has thrown a spanner in the works for those plans, Telstra services are still in high demand. More workers at home is increasing the need for mobile infrastructure and stronger networks. 

That’s good news for Telstra and could help maintain earnings when August rolls around.

Will the Telstra share price climb higher?

The Telstra share price is sitting at $3.22 per share which is a far cry from its 52-week high of $4.01. Things are clearly different compared to the start of the year but Telstra is still a strong ASX dividend share with a current yield of 3.15%.

No one knows exactly where the telco’s share price will be in the next 12 months. I think the 5G network is the key to the telco’s success over the medium to long-term.

If Telstra can corner the market with this, its share price could be on the rise by May 2021. However, there’s still strong competition and a challenging market which means there’s plenty of uncertainty ahead this year.

Foolish takeaway

I think the Telstra share price could outperform the S&P/ASX 200 Index in 2020 and continue to be a strong dividend share next year.

More reading

• Why you shouldn’t fear an ASX share market crash
• 3 ASX shares Warren Buffett couldn’t ignore today
• What would $50,000 invested in the ASX 200 a decade ago be worth today?
• Is the Transurban share price a buy today?
• Should you ever buy ASX shares at an all-time high?

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Where will the Telstra share price be next year? appeared first on Motley Fool Australia.

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