The Coles Group Ltd (ASX: COL) share price has been a strong outperformer in 2020. While the S&P/ASX 200 Index (ASX: XJO) is down 13.53% this year, Coles shares have climbed 3.91% higher.

But if you’re a long-term investor, you’re probably not too worried about the here and now. So, where will the Coles share price be in 1 year?

Where is the Coles share price headed?

It’s clear that the coronavirus pandemic has boosted supermarket sales this year. Even once the panic buying subsided, supermarkets have been busy with Aussies forced to stay home more.

But it’s harder to forecast sales over the next 12 months. I think it looks like we’re headed for a recession in Australia. Now, technically a recession is not necessarily a disaster but it still has the potential to impact the Coles share price.

A recession is simply 2 consecutive quarters of negative GDP growth. In fact, they’re quite common. But I think a 2020 recession will be tough with so many job losses across a number of sectors.

People tend to spend less in times of uncertainty. While the Coles share price benefits from non-cyclical earnings, even supermarkets get hit by Aussies tightening their spending.

That means that we could see lower earnings over the next 12 months. However, I think Coles will continue to be a strong defensive share.

I don’t think we’ll see spectacular Coles share price growth. But if the ASX 200 moves sideways or down over the next year or so, Coles could still outperform.

I like that Coles provides more concentrated exposure than Woolworths Group Ltd (ASX: WOW) following the former’s November 2018 demerger from Wesfarmers Ltd (ASX: WES).

Foolish takeaway

No one knows where the Coles share price is headed in the next 12 months. In my opinion, it will be trading at or near its current $15.42 valuation.

However, it’s important to consider your time horizon. If you’re investing for the next 30 years, what happens this year or next isn’t a huge concern.

More reading

• Tax planning for ASX 200 investors
• 3 exciting ASX growth shares to buy in June
• Is the BHP share price a buy?
• 3 top ASX dividend shares I would buy for income right now
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Wesfarmers Limited, and Woolworths 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.

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It’s nearly June so S&P/ASX 200 Index (ASX: XJO) investors should start considering their tax affairs for FY20. Investors should pay particular attention to anything that reduces the returns they’ve earned for the year. This includes transaction fees, advisor costs, expense ratios and taxes.

Here are a few things you can do to manage your ASX 200 portfolio, prepare for tax time and ensure you only pay the tax you are required to pay.

Rebalance your ASX 200 portfolio allocations

The financial year end provides a great opportunity for you to review your portfolio and investment strategy. This can be particularly relevant for growth investors, or investors who are not contributing more capital to their investment portfolio. 

Growth investors will often have an oversized portion of their portfolio concentrated in a few shares that have done particularly well. Each individual investor will have their own comfort level when it comes to concentration of risk. I was in this position with Altium Limited (ASX: ALU) and The Trade Desk Inc (NASDAQ: TTD) last year. This was because they had both grown much faster than the rest of my portfolio. Personally, I prefer to let my winners run and am continuing to add funds to my investment portfolio. Therefore, these winners are a part of my portfolio I’m comfortable with.         

Pay the piper, later   

Your individual circumstances, including whether your shares are in a gain or loss position, will dictate the best time or times to rebalance your portfolio. For example, if you already have a capital gain in FY20, selling shares at a loss before 30 June will mean you can reduce your gain. If the shares you want to sell down as part of the rebalance are in a gain position, waiting until 1 July could provide you an additional year before the tax is due. This is because the gain will be included in your FY21 tax return.

Organise your shoebox

Whether you give your accountant a shoebox or send them a link to a cloud drive, getting your documents in order prior to year end will give you a better idea of your tax position. This means you can also better plan your cash flows and invest accordingly. 

A further benefit is that if you have all of your Cochlear Limited (ASX: COH) retail entitlement documentation or Telstra Corporation Ltd (ASX: TLS) dividend reinvestment plan purchases organised, your accountant should be able to work more efficiently and you might save on their fees.

Foolish takeaway

Tax shouldn’t be what drives your investment decisions, but it should be a consideration. ASX investors should target outperforming the ASX 200 index’s return, after fees and taxes. Furthermore, legally lowering your average lifetime tax rate can significantly increase your annualised growth rate and wealth over time.

More reading

• Where will the Coles share price be in 1 year?
• Is the BHP share price a buy?
• 5 things to watch on the ASX 200 on Wednesday
• 2 ASX shares that are absurdly cheap right now
• Why ASX 200 travel shares are soaring higher today

Lloyd Prout owns shares in Altium Limited and The Trade Desk Inc and expresses his own opinions. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends The Trade Desk. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Cochlear Ltd. and The Trade Desk. 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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I think there are some great ASX dividend shares. You may want to find different sources of income from the typical dividend shares people go for.

This doesn’t mean shares like Australia and New Zealand Banking Group (ASX: ANZ) or Sydney Airport Holdings Pty Ltd (ASX: SYD). Who knows if they will even pay something during 2020 because of the coronavirus?

I think the below ASX dividend shares could be great, diversified options for income:

Duxton Water Ltd (ASX: D2O)

Duxton Water is a company that owns water entitlements. It then leases them out to agricultural businesses. It has a portfolio of water from different entitlement regions, it’s trying to progressively lease out more of them.

This increased earnings visibility has allowed management to forecast that the Duxton Water dividend can grow every six months for the next two years. After that it may depend on how much rain there has been (or not).

The company is currently trading at a sizeable discount to its net tangible assets (NTA). The forward grossed-up dividend yield amounts to 6.25%.

Brickworks Limited (ASX: BKW)

Brickworks is one of the best ASX dividend shares in my opinion. It hasn’t decreased its dividend for more than four decades.

The business is split into three key segments.

The first segment is its large shareholding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) which owns a diversified and growing portfolio of businesses in different industries. Soul Patts continues to grow its dividend for all shareholders, including Brickworks.

The second segment is its 50% stake of an industrial property trust, the co-partner is Goodman Group (ASX: GMG). This trust is generating reliable cashflow, long-term capital growth and there are more projects which will be completed in the coming years.

The third segment is the diversified building products businesses in Australia and the US. Construction is going to have a tough time this year, but I think there’s a good turnaround story here.

What’s the yield for the ASX dividend share? It currently offers a grossed-up yield of 5.8%.

BetaShares FTSE 100 ETF (ASX: F100)

There are plenty of shares listed on the London Stock Exchange which offer defensive earnings and a good yield. I’m thinking about shares like Tesco, GlaxoSmithKline, Unilever, BHP, Rio Tinto, National Grid and Vodafone.

The UK share market has been hit just like every other share market. This has boosted the dividend yield for ASX investors. At the end of April 2020 it had an underlying trailing dividend yield of 5.86%. The yield has fallen with the rising share prices, but the yield will still be fairly attractive for the long term even if there are a few dividend reductions this year.

It could be a good idea to get international income diversification. 

Which ASX dividend share to buy today?

Each of these ASX dividend shares have attractive futures with solid starting yields. At the current prices I’d probably go for Brickworks, it’s trading at a big discount to its asset value, has a great dividend record and it could be a good contrarian pick with the worries about the construction industry.

More reading

• 2 ASX shares that are absurdly cheap right now
• ASX 200 rallies hard, no longer in bear territory
• Why this small-cap ASX pharmaceutical share rocketed 27% higher today
• 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 owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended DUXTON 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.

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