How much money should you have in your emergency fund going forwards?

The typical advice for an emergency fund is to have three to six months of living expenses in a high interest savings account. If you’ve followed that advice then your emergency fund may be coming to your assistance right now if you’ve lost your main source of income due to coronavirus impacts.

An emergency fund equating to six months of expenses would still have plenty of room left.

But is that going to be enough in the future? It’s very hard to say how safe your finances need to be. Someone still employed in a government role has a different level of income security compared to someone in a cyclical industry or say a hospitality job.

Maybe the new normal will be six to nine months of expenses?

A life-changing event like this can completely change people’s outlook on money and risk.

Where should your emergency fund be placed?

My emergency fund is in a high interest savings account in a separate financial institution. For example your transaction account may be with Commonwealth Bank of Australia (ASX: CBA) and then your savings account could be with one of the subsidiaries of Westpac Banking Corp (ASX: WBC) or National Australia Bank Ltd (ASX: NAB). Most other sizeable banks are good options too. 

I think it’s good to keep your money in separate institutions in-case there’s a technical (or worse) problem with one of the institutions.

By the way, your share portfolio isn’t an emergency fund. You may need to sell shares in a market crash just when you need the cash.

At the moment my household has six months of ‘ramen noodle’ life expenses. In other words, half a year of ultra-low-cost living. In light of the current crisis, I think we’ll aim to increase that to nine months once we’ve bought a house.

The stronger you make your financial foundations with a good emergency fund, the more you can put to investing in difficult times when it comes.

More reading

• Where to invest $5,000 in ASX 200 shares today
• 3 top ASX dividend shares I would buy for income right now
• ASX 200 rallies hard, no longer in bear territory
• Latest spending data could drive the ASX retail sector higher
• Why ANZ, CBA, NAB, and Westpac shares are storming higher today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 How much money should you have in your emergency fund going forwards? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2ZC24Vr

When it comes to the share market there are two ways you can take part. You can invest or you can trade.

While day trading can generate great returns, it is worth remembering that statistically it creates far more losers than winners.

According to Cory Michael from Vantage Point Trading, the majority of people that day trade lose money. And those that succeed, only a very small portion are winning enough to make it worthwhile.

He told Forbes: “The success rate for day traders is estimated to be around only 10%, so …90% are losing money. Only 1% of [day] traders really make money.”

In light of this, I think readers interested in building their wealth should forget day trading and focus on investing with a long term view.

With that in mind, here are three ASX shares that I believe investors should consider:

Appen Ltd (ASX: APX)

Appen is a leading developer of high-quality, human annotated datasets for the machine learning and artificial intelligence markets. Thanks to the explosive growth of these markets, I expect demand for its services to continue to grow in the coming years and support strong earnings growth. This could make it a great buy and hold option.

Nearmap Ltd (ASX: NEA)

Nearmap is a leading aerial imagery technology and location data company. While FY 2020 looks set to be a tricky year for the company, I believe its long term outlook remains extremely positive. This year the company is aiming to deliver annualised contract value of $102 million to $110 million. This is only a fraction of the global aerial imagery market which is estimated to be worth US$10.1 billion in 2020.

Xero Limited (ASX: XRO)

A final option to consider is Xero. It is a leading cloud-based business and accounting software provider. I think it is a great option due to the quality of its product and the continued shift to online accounting. At the end of FY 2020 the company had ~2.3 million subscribers. This is still only a small portion of a massive global market opportunity. 

More reading

• 3 easy rules for building a massive ASX share portfolio
• Why Appen and these ASX shares just hit record highs
• Why these 3 ASX 200 tech shares offer great value
• 3 timeless investing lessons from 2020 (so far!)
• Up over 100% in 2 months. Are Nearmap shares still a buy at current prices?

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia owns shares of Appen Ltd. 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 Forget day trading: Get rich with these top ASX shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2X2uYfy

The Blackmores Limited (ASX: BKL) share price won’t be going anywhere on Wednesday.

This morning the health supplements company requested that its shares be placed into a trading halt.

Why are Blackmores’ shares in a trading halt?

Blackmores requested a trading halt this morning while it undertakes a capital raising which aims to raise up to $127 million.

According to the release, Blackmores’ capital raising comprises a fully underwritten $92 million institutional placement and non-underwritten share purchase plan of up to $25 million.

Blackmores Chief Executive Officer, Alastair Symington, expects the capital raising to support its activities in the Asia market.

He explained: “The Equity Raise will strengthen Blackmores’ balance sheet and liquidity position and provide the flexibility to pursue our key strategic priorities. It will enable us to accelerate our growth initiatives in Asia and invest in our efficiency program which will help us to achieve our objective of returning Blackmores to sustainable, profitable growth.”

Trading update.

The company also provided the market with an update on how it is performing during the pandemic.

Blackmores advised that it has experienced a material increase in demand for its immunity products. However, as immunity products constitute only a small part of its portfolio, it isn’t having a major impact on its performance.

Furthermore, any of the benefits it is experiencing from the surge in demand for immunity products, is being offset elsewhere in the business.

Management notes that there has been a lag in non-immunity products, which has been partly driven by lower shopping traffic.

Also weighing on its performance has been issues gaining access to some overseas sourced materials and capacity constraints at some contract manufacturers. These have prevented the company from being able to fully meet demand in some products.

In light of this, the company expects to deliver underlying net profit after tax of $17 million to $21 million in FY 2020. This is in-line with the guidance it provided with its first half results in February.

More reading

• 2 quality ASX shares to buy for long-term growth
• ASX shares and investing trends that could boom post COVID-19
• Will coronavirus make Blackmores a market darling again?
• ASX 200 Weekly Wrap: ASX starts May with a slide

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores 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 Why the Blackmores share price is in a trading halt appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2M2YjQY