It was a strong week for ASX shares as the S&P/ASX 200 Index (ASX: XJO) surged 4.22% higher last week to close just shy of 6,000 points.

The benchmark Aussie index finished the week at 5,998.70 points and was led higher by many Aussie blue chips including the banks.

Last week I was watching Bendigo and Adelaide Bank Ltd (ASX: BEN), Flight Centre Travel Group Ltd (ASX: FLT) and St Barbara Ltd (ASX: SBM).

The Bendigo share price was one of last week’s biggest moving as it rocketed 19.02% higher including a 4.72% gain on Friday. Flight Centre shares also surged, gaining 17.66%, while St Barbara shares were sold-off in the bullish ASX 200 share market and closed the week down 3.85%.

After a big week for last week’s top picks, here are 3 shares I’ll be watching in the week ahead.

3 ASX 200 shares to watch this week

I always like to watch some of the biggest movers from the previous week. That means Stockland Corporation Ltd (ASX: SGP) is in my sights.

The Stockland share price rocketed 10.92% last week and is up another 4.04% at the time of writing. The Aussie real estate investment trust (REIT) seems to be climbing thanks to investor optimism.

Stockland has interests in retail, office and residential real estate. There are a lot of factors at play in all of those areas right now. I think this ASX 200 REIT could be set to recover further if the re-opening of the economy continues at a cracking pace.

Another ASX 200 share I’ve got my eye on is SkyCity Entertainment Group Limited (ASX: SKC). SkyCity operates a number of hotels and wagering businesses that are starting to see eased restrictions.

That could be good news for SkyCity earnings in FY20 and FY21. The entertainment share is up a whopping 8.96% in morning trade so far and will be well worth watching this week.

I also think it’s hard to ignore the ASX banks right now. The Westpac Banking Corp (ASX: WBC) share price is one I’m watching this week.

The big four bank’s shares have some strong momentum after rocketing 9.12% higher last week. Westpac shares have shot out of the gates this morning to be up more than 5% at the time of writing.

I’d expect investors to continue buying high-quality shares this week. Westpac shares are still down 22.45% for the year and could have further to go in 2020.

Foolish takeaway

These are just a few of the ASX 200 shares I’m watching at the moment. It’s important to focus on the long-term investment horizon rather than getting too caught up in daily or weekly moves.

There might be tactical buying opportunities on offer from time to time. However, I believe a buy and hold strategy is still the ticket to long-term wealth.

More reading

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• ‘Westpac share price undervalued’, says analyst
• Cheap ASX 200 retail shares to buy today

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Sky City Entertainment Group 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.

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The share price of Wesfarmers Ltd (ASX: WES) will be on watch this morning after it provided the market with a retail trading update for its performance in 2H20 so far.

The group revealed today that it has witnessed particularly strong demand from both its Bunnings and Officeworks stores.

The Wesfarmers share price has bounced back strongly since late March. The group’s share price has risen from $31.02 on 23 March to close at $41.71 last Friday. That’s an impressive increase of 34.5%.

Bunnings and Officeworks sales grow strongly

Compared to sales in the first half of the year (1H20), sales for Bunnings have risen very strongly so far in the current half (2H20). Bunning’s sales have risen 19.2% since the beginning of the year. This compares to only 5.8% during 1H20.  For the FY2020 year-to-date, sales have also risen strongly for Bunnings. They were up by 11.3% compared to the prior corresponding period.

As a result of the coronavirus crisis, Australians have continued to spend more on goods to assist them in working and learning in a home environment.

The performance of Officeworks was also very strong. Sales were up by 27.8% for 2H20 to date, compared to only 11.5% in 1H20. FY2020 sales to date were also strongly up by 19.3% for Officeworks.

I believe that the strong performance of both Bunnings and Officeworks has made a significant contribution to Wesfarmers’ recent strong share price growth.

Pure online retailer Catch sees sales surge

The star performer for Wesfarmers in recent months has been its pure online offering in Catch.

Online sales for Catch have risen by a massive 68.7% in the half-year to date. This compares to only 21.4% in 1H20.

There has been a recent surge in online sales due to the coronavirus. All of Wesfarmers’ retail businesses witnessed massive combined total online sales growth of 89% for the half-year to date.

Wesfarmers’ online offerings have seen strong growth over the past few years.

It is quite likely that consumer habits are changing permanently. Many Australians may continue to choose the online channel over bricks and mortar stores in the years ahead due to its convenience and price competitiveness.

Where to now for the Wesfarmers share price?

As already mentioned, the group’s share price growth since late March has been very strong. However, I believe that Wesfarmers will be challenged to keep growing at this pace in the months ahead. Wesfarmers itself acknowledged today that it is uncertain if this sales growth can continue for the rest of the year. As government lockdown measures continue to ease, shopping patterns are likely to continue to get back to normal sooner rather than later.

More reading

• ASX 200 Weekly Wrap: ASX bulls crash through 6,000 points
• 3 high quality ASX dividend shares you can buy today
• Want high-paying dividends? Try Wesfarmers shares and these 2 other ASX options
• How to replace your entire wage with dividends
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Motley Fool contributor Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

2020 has been a wild year for investors. The stock market soared to new highs, only to plunge in the wake of the coronavirus outbreak. After hitting bottom, markets have soared upward in a quick recovery, and at least a couple of stock benchmarks have reached new records once again.

When the initial phase of the COVID-19 outbreak led to one of the fastest bear markets in history, the best advice investors could follow was not to make any rash decisions with their investments. That advice served those who followed it well, as the bounce has helped many investors recover much or even all of their losses. Staying pat was hard, though, if you felt blindsided by the coronavirus crisis and suddenly became aware that the risk level in your portfolio was too high.

Fortunately, you now have your chance to reconsider your investing strategy calmly and objectively. If the bear market was a wake-up call that you had too much risk in your portfolio, then now that stocks have recovered most of their lost ground, you can adjust your asset allocation  without doing major damage to your long-term financial prospects.

Letting it ride

The 2010s were one of the most successful decades ever for stock market investors. The right strategy to follow was to get money into the market whenever you could, especially taking advantage of periodic dips to add to your positions. With very few extended downward moves in the market, it was easy to think that owning stocks didn’t really involve much risk.

However, the big gains from the 2010s set up some investors for a surprisingly painful shock. Not only did the coronavirus bear market remind investors that big downturns could happen, but it also came at a time when many investors hadn’t rebalanced their portfolios for a long time. As a result, many people’s stock allocations had risen above their past levels, leaving investors even more vulnerable to the stock market downturn.

Add to that the fact that yields on bonds and other fixed-income investments have fallen to such low levels that the income they pay is insufficient for most investors’ needs. That pushed people into dividend stocks, boosting overall allocations to the stock market and further adding to risk.

Avoiding the kneejerk reaction

Many people realized only after the fact that they were uncomfortably overexposed to stocks in their investment portfolios. The worst possible way to respond would have been to sell at the lows. With markets down as much as 30% between mid-February and March, selling out would have meant taking huge losses. Moreover, you would’ve missed out on the nearly 40% gain in some stock market indexes since those lows, repeating a mistake that millions of investors have made in past crashes and bear markets.

If you successfully held your ground and stuck with your strategy, you’ve probably seen a nice recovery in your portfolio. But that doesn’t mean that you should forget about your concerns regarding your risk tolerance. If you now know that you’re not inclined to deal with a drop of the magnitude we saw in early 2020, then you should adjust your investing strategy to be more conservative. Moreover, you can make those adjustments now, because reducing your stock portfolio won’t result in anywhere near the losses that you would’ve locked in just a couple months ago.

2 ways to get your portfolio in line

Investors have a couple of things they can do to adjust their portfolios to reflect their new risk tolerance. For some, it’ll be enough simply to rebalance your investments, getting your allocations to stocks, bonds, and other asset classes back in line with their long-term targets. Even though many stocks haven’t fully recovered their losses from the bear market, you might still find yourself needing to reduce your stock positions to rebalance effectively if it’s been a few years since you last did so.

The more extreme move is to reduce your target stock allocation. That will necessarily involve making sales and exchanges of various investments, with the usual tax and cash flow consequences. For many, the peace of mind you can get from reducing the future volatility of your overall portfolio is worth the losses you’ll lock in — especially since those losses are probably much smaller than they were back in March or April.

Don’t wait

Stocks can do anything in the short run. Waiting to take action could let your portfolio recover further, but it could also leave you vulnerable to another leg lower if it comes.

If you now realize your risk tolerance for stocks is lower than you thought it was, now’s the best time to adjust your portfolio to reflect your new needs. That way, you’ll be better prepared to deal with whatever comes next — and more likely to avoid mistakes that could cause long-term damage to your finances.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Motley Fool contributor Dan Caplinger 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 If you need to protect your portfolio, do this now appeared first on Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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