Author: openjargon

One of the hardest parts of investing is deciding when to start.

When the market is rising, it can feel too expensive. When the market is falling, it can feel too risky. And when the market is moving sideways, it can be tempting to wait for a clearer signal.

I understand that feeling. But I also think waiting for the perfect moment can leave investors stuck on the sidelines for too long.

Here’s how I would invest in ASX shares if I were worried about buying at the wrong time.

Start with the right question

I would not begin by asking whether the market will be higher or lower next month.

I do not think anyone can answer that consistently.

Instead, I would ask whether I am buying something I would be happy to own for years. That changes the decision.

A share price can look expensive one month and cheaper the next. But if the business keeps growing earnings, improving its position, and returning cash to shareholders over time, the short-term entry point becomes less important.

That does not mean valuation should be ignored. It just means I would focus more on business quality and time horizon than trying to pick the exact bottom.

Put money to work gradually

If I were nervous about investing all at once, I would spread my buying over time.

That could mean investing part of the money now, then adding more over the next few months. This approach reduces the pressure to make one perfect decision.

If the market falls, I still have money available to invest at lower prices. If the market rises, I have at least started.

I like this because it turns investing into a process rather than a single big call.

It can also help emotionally. Many investors make poor decisions because they put too much importance on one entry price. A gradual approach can make it easier to stay calm.

Focus on businesses that can handle uncertainty

When market conditions feel uncertain, I would become more selective.

I would look for ASX shares with strong balance sheets, durable earnings, capable management, and products or services that customers keep using through different parts of the cycle.

That could include high-quality blue chips like Macquarie Group Ltd (ASX: MQG), defensive businesses, global growth companies, or broad-exposure exchange-traded funds (ETFs).

For example, an investor looking for broad exposure could consider an ETF such as the Vanguard MSCI Index International Shares ETF (ASX: VGS). It provides access to large global companies across developed markets and can add exposure to areas that are harder to access through the ASX alone, including global healthcare, technology, software, luxury goods, and consumer platforms.

For individual shares, I would focus on businesses where the long-term opportunity is still clear, even if the share price moves around in the short term.

Accept that volatility is normal

I would also remind myself that volatility is not a sign that the strategy is broken.

Share prices move every day. Sometimes they move for good reasons. Sometimes they move because investors are nervous, interest rate expectations change, or global headlines dominate the market.

That is part of investing. The goal is not to avoid every fall. The goal is to own investments that can recover, grow, and become more valuable over time.

This is where patience matters. If I buy a quality ASX share and it falls 10% soon after, that does not automatically mean I made a mistake. It may simply mean the market is doing what markets do.

Foolish Takeaway

I do not think investors need to wait until they feel completely confident before buying ASX shares.

That day may never arrive.

A better approach, in my view, is to start carefully, invest gradually, and focus on quality. It may not feel as dramatic as trying to call the bottom, but it can be much easier to stick with.

The market will always give investors reasons to hesitate. The real advantage comes from having a plan that works even when the timing feels uncertain.

The post How to invest in ASX shares when you’re worried about buying at the wrong time appeared first on The Motley Fool Australia.

More reading

• With no savings at 40, I’d follow Warren Buffett’s approach to build wealth
• Why these ASX 200 shares could shoot 20% and 50% higher
• If I invest $8,000 in ANZ shares, how much passive income will I receive in 2027?
• 3 reasons I would buy Qantas shares under $10
• The growing case for this semiconductor ASX ETF

Motley Fool contributor Grace Alvino 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 Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ANZ Group Holdings Ltd (ASX: ANZ) shares may be one of the most popular dividend options because of the company’s perceived stability and dividend yield.

The ASX bank share typically has a higher dividend yield than competitors like Commonwealth Bank of Australia (ASX: CBA) and Macquarie Group Ltd (ASX: MQG), and a similar yield to names like National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC).

Thankfully, ANZ’s dividend has recovered significantly since the COVID-hit year of 2020.

The recent FY26 half-year result was another example of the ASX bank’s share stability for shareholders.

In that HY26 result, ANZ maintained its interim dividend per share at 83 cents following the bank’s underlying cash profit before provision growth of 12%, while the underlying cash profit grew 14%.

In this article, we’re going to look at the annual FY27 dividend, which will be paid in 2027.

2027 dividend projection for owners of ANZ shares

According to the projection on CMC Invest, the ASX bank share is projected to pay an annual dividend per share of $1.70 in the 2027 financial year.

At the time of writing, this forecast translates into a dividend yield of 4.75% excluding franking credits and a grossed-up dividend yield of approximately 6.3% including franking credits.

If someone were to invest $8,000 in ANZ, they would be able to buy 224 ANZ shares (with a little bit of money left over).

With those 224 ANZ shares, investors could receive $380.80 of cash and some franking credits, the level of franking credits are not known at this stage because the ASX bank share is only paying partially franked dividends.

Is this a good time to invest in the ASX bank share?

According to CMC Invest, there have been 10 analyst ratings calls on the business in the last three months.

Of those 10, four of them were a buy, five were a hold and one was a sell. So, the investment professionals are, on average, neutral on the appeal of the company’s valuation right now.

The average price target of those 10 ratings is $35.14. That means, collectively, those analysts are predicting the ANZ share price will (at the time of writing) hardly move over the next year.

In the last 12 months, the ANZ share price has been above $40 and below $30, so it’s probably about fair it’s roughly in the middle now.

For now, there seem to be more compelling ASX shares out there to buy.

The post If I invest $8,000 in ANZ shares, how much passive income will I receive in 2027? appeared first on The Motley Fool Australia.

More reading

• 9 ASX 200 shares with renewed buy ratings this week
• Buy, hold, sell: ANZ, Macquarie, Westpac shares
• This ASX bank ETF has a 5.2% dividend yield right now
• ASX 200 rises as inflation surprise leaves investors with one big question
• How do ASX dividend shares compare to savings deposit rates today?

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 Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Qantas Airways Ltd (ASX: QAN) shares are trading under $10, and I think they look attractive at that level.

Airline stocks can be volatile. Fuel prices, travel demand, competition, economic conditions, and aircraft availability can all move earnings around quickly.

But I think Qantas has enough going for it to make the shares worth buying for patient investors. Here are three reasons why.

The valuation looks reasonable

The first reason is valuation.

According to CommSec, the consensus estimate is for Qantas to generate earnings per share of 98.4 cents in FY26, $1.16 in FY27, and $1.15 in FY28.

With Qantas shares trading below $10, that puts the stock on less than 10 times FY26 earnings and around 8 times FY27 earnings.

That does not look demanding to me, especially for a business with Qantas’ market position.

Of course, those estimates are not guaranteed. Airlines can be affected quickly by higher fuel costs, weaker demand, or disruption across global travel markets. Qantas’ recent market update highlighted just how much fuel volatility can change the operating backdrop.

But I think the valuation already gives investors a reasonable buffer for some of that uncertainty.

The dividends are back

The second reason is income.

Qantas paused dividends for several years around the pandemic, which was understandable given the pressure on the aviation industry at the time.

But the airline is now back to paying dividends, and that changes the investment case.

CommSec’s consensus estimates suggest Qantas could pay dividends per share of 39.6 cents in FY26, 44.8 cents in FY27, and 56.2 cents in FY28.

Based on a share price under $10, that implies forward dividend yields of around 4% in FY26, 4.5% in FY27, and more than 5.5% in FY28.

That income stream could become increasingly appealing if earnings remain resilient.

I would not treat Qantas like a classic defensive dividend share. Airline dividends can move with the cycle. But I do think the return of dividends shows how far the business has come since the pandemic years.

The business has real strengths

The third reason is that Qantas is not just any airline.

It has a powerful position in Australian aviation, supported by the Qantas and Jetstar brands. That gives it exposure to different parts of the market, from premium corporate and leisure travel to value-focused flying.

I also like the Qantas Loyalty business. It gives the group a valuable earnings stream that is not simply about selling seats on planes. Frequent Flyer, partnerships, financial products, and customer engagement all add to the broader ecosystem.

Fleet renewal is another important part of the story. New aircraft can improve customer experience, increase efficiency, and help the group better match capacity to demand over time.

There are risks to consider. Fuel prices remain a major swing factor, and Qantas has recently taken steps such as network changes, capacity adjustments, and fare increases in response to the conflict in the Middle East. Higher costs can still affect customers and margins if conditions remain difficult.

But I think Qantas has the scale, brands, loyalty business, and financial discipline to manage through a tougher environment better than many smaller airlines.

Foolish takeaway

Qantas shares under $10 look appealing to me.

The stock is trading on a modest earnings multiple based on consensus forecasts, dividends are back, and the business still has a strong position in Australian travel.

I would not expect the ride to be smooth. Airline stocks rarely are. But for investors who can handle some turbulence, I think Qantas offers an attractive mix of value, income potential, and recovery strength at current levels.

The post 3 reasons I would buy Qantas shares under $10 appeared first on The Motley Fool Australia.

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• 3 ASX shares that could benefit most if the US-Iran peace deal holds
• Virgin Australia, Qantas shares jump 8% higher this week. Are the ASX airline stocks a buy, sell or hold?
• If you invested $1,000 in Qantas shares a decade ago, here’s what they would be worth now
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• Here’s the dividend forecast out to 2028 for Qantas shares

Motley Fool contributor Grace Alvino 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.

One of the best ASX ETFs to own over the last 12 months has been the Global X Semiconductor ETF (ASX: SEMI). 

It has risen an impressive 148% in that span. 

A new report from Global X has identified the key catalysts for this growth, and why these are only likely to continue. 

Fund overview 

The Global X Semiconductor ETF seeks to invest in companies that stand to potentially benefit from the broader adoption of tech-enabled devices that require semiconductors. This includes the development and manufacturing of semiconductors.

It provides exposure to 30 of the world’s largest semiconductor companies through the Solactive Global Semiconductor 30 Index.

Rather than trying to pick the next breakout AI winner, the ETF offers diversified exposure across the global semiconductor supply chain.

For those unfamiliar, a semiconductor is a material that can both conduct and block electricity, depending on how it’s used.

This unique ability makes semiconductors essential to modern technology. They’re used to create microchips that power smartphones, computers, cars, and medical equipment.

Why business is booming 

Semiconductors are the “brains” inside modern technology. They process information, store memory and power computation. Without them, AI simply does not exist.

The semiconductor industry sits at the centre of several major structural themes:

• Artificial intelligence and data centres
• Cloud computing
• Electric vehicles and autonomous driving
• Robotics and automation
• Defence technology
• Consumer electronics

According to Global X, as AI adoption accelerates, demand for advanced chips has exploded. 

Training large AI models requires enormous computing power, which in turn requires increasingly sophisticated semiconductors.

That has created a powerful tailwind for the companies designing chips, manufacturing them and supplying the equipment needed to build them.

The companies leading the way 

This ASX ETF includes 30 holdings, including strong exposure to the four companies powering the AI boom. 

According to Global X, one of the reasons semiconductor investing has become so compelling is that the industry contains some of the most strategically important companies in the world, including:

• Nvidia (NASDAQ: NVDA) – is a leader in the AI revolution because its GPUs power many advanced AI systems and data centres.
• Taiwan Semiconductor Manufacturing (NYSE: TSM) – is vital to the global tech industry, producing many of the world’s most advanced chips for companies like Nvidia and Apple.
• ASML (NASDAQ: ASML) – is essential because it is the only company that makes EUV lithography machines needed to manufacture cutting-edge semiconductors.
• Broadcom (NASDAQ: AVGO) – plays an important role in AI by designing custom chips for major technology companies such as Google and Meta.

The opportunity for investors 

Semiconductors have become one of the defining investment themes of the decade because they sit at the intersection of AI, automation and digital infrastructure.

However it is important investors are aware that semiconductor stocks can be volatile, particularly after strong rallies. 

The long-term investment case increasingly centres on the idea that chips are no longer cyclical industrial products alone; they are now strategic infrastructure for the digital economy.

For retail investors looking to better understand the AI boom, semiconductors may be one of the clearest places to start. And rather than trying to identify the next individual winner, diversified exposure through vehicles like Global X Semiconductor ETF (SEMI) offers a way to participate in the broader transformation underway across global technology markets.

The post The growing case for this semiconductor ASX ETF appeared first on The Motley Fool Australia.

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• ASX investors: Are you overinvested in the Magnificent 7 without knowing it?
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Motley Fool contributor Aaron Bell 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 ASML, Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool Australia has recommended ASML and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I’d describe Guzman Y Gomez Ltd (ASX: GYG) as one of Australia’s top shares, or at least, it has the potential to prove it’s one of the best in the coming years.

As the chart above shows, the Mexican restaurant business has seen enormous volatility since it listed on 21 June 2024.

But, at the time of writing, it’s down 37% in the past year and more than 55% since December 2024.

I’m not sure if the company will ever see declines of that size again in the future. But, I’ve been looking for opportunities away from the tech sector because of the uncertainties of how the AI future could play out.

I’m not convinced AI will become as widespread as some people believe due to costs, but I still think it’s wise to look at a wide array of opportunities.

There are a few great reasons why I think GYG shares are on course for a very good future.

Exciting plans for Australia

The most important part of GYG’s growth plans is what it wants to achieve in Australia.

GYG wants to reach 1,000 locations in Australia within the next 20 years. It had 242 restaurants at the end of the FY26 third quarter and it expects to open 32 restaurants in FY26. That’s an excellent growth runway.

In the FY26 third-quarter, Guzman Y Gomez reported network sales growth of around 20%. I’d describe a profitable business growing its top-line at around 20% (or more) per year, definitely makes it one of Australia’s top shares.

But, it’s not as though the new locations are entirely stealing growth from the existing network. In the FY26 third-quarter, the company said the Australia segment (which includes Singapore and Japan) delivered comparable sales growth of 6.6%.

GYG expects to deliver Australia segment underlying operating profit (EBITDA) of approximately $85 million in FY26, that represents 29% year over year growth.

International expansion

Investors should remain focused on the Australian division because that’s the segment that is likely to generate the most network sales and earnings.

But, its Asian network sales are also headed in a very pleasing direction.

I’m not sure how much GYG’s network sales will grow in Japan and Singapore in the next five years, but at the current rate of growth, it could become a sizeable contributor to Guzman Y Gomez.

In the third quarter of FY26, Asian network sales grew by 15% year over year to $21.5 million. If the network sales in Japan and Singapore continue growing by double-digits for the foreseeable future, then the future looks bright. But, the Asian network sales were only 6.7% of the Australian network sales.

Plus, GYG could decide to expand into other countries where its success may look more like the Asian success (and less like the US, where it has decided to exit).  

Rising profit margins could be key for one of Australia’s top shares

While the top-line of Guzman Y Gomez is growing at a very fast pace, its bottom line could increase at an even stronger rate because the company is expecting profit margins to improve in the coming years.

In FY26, it expects the Australia segment underlying EBITDA as a percentage of network sales to expand to between 6% to 6.2% in FY26 compared to 5.7% in FY25. In the long-term that profit margin is forecast by the business to rise towards 10%. That would represent a significant rise in dollar terms for the business, which bodes very well for the future, in my view.

According to the projection on CMC Invest, GYG could generate earnings per share (EPS) of 64.2 cents. That means it’s currently valued at 30x FY28’s estimated earnings. I think it’s an appealing price to invest in for the long-term.

The post A rare buying opportunity in 1 of Australia’s top shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Guzman Y Gomez. 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.

A new report from VanEck has highlighted that the share markets’ forgotten middle child – ASX mid-caps – could be poised for growth. 

Cameron McCormack, Senior Portfolio Manager at VanEck, said large caps like BHP Group (ASX: BHP) and Commonwealth Bank Of Australia (ASX: CBA) dominate headlines and exert the greatest influence on the returns of the whole Australian share market. 

Small caps, meanwhile, often attract attention for their higher-risk, higher-reward potential. Many of these companies are in their growth phase, still finding their feet.

Mid-cap companies rarely command the same attention when investors are focused on a small group of market heavyweights. But with developed-market bond yields at their highest levels in more than two decades, earnings expectations for some large-cap companies are becoming harder to sustain, and with mid-caps continuing to trade at a discount to the ASX 50, investors now have reason to take a closer look.

Why a broader market is emerging 

According to the report, markets do not tend to stay this concentrated for long. 

While mega-cap companies have dominated the ASX 200’s returns in recent years, history suggests periods where only a small number of stocks are driving the market tend to be the exception rather than the rule.

VanEck suggests that shifts have often emerged during periods of higher interest rates and slower economic growth, when investors become more selective about where earnings growth is likely to come from. 

In these environments, companies able to keep growing earnings even as conditions become more difficult tend to attract greater attention from investors focused on consistency rather than simply market size.

While sector performance has varied, periods of rising rates have often coincided with stronger returns from materials and strategies that spread investments more evenly across the market.

There are already signs that a shift may be emerging again. In the United States, a record share of S&P 500 companies has outperformed the index this year, reversing the unusually narrow leadership that defined much of the past two years.

What about in Australia?

VanEck reinforced that signs of that shift are already beginning to emerge in Australia. 

While large caps have outperformed since February reporting season, smaller companies delivered some of the market’s strongest earnings surprises and most positive analyst target revisions. That suggests investors and analysts alike are beginning to see more room for earnings growth and share price improvement.

Importantly, many companies outside the largest stocks are still trading at cheaper valuations than the S&P/ASX 50, even though their earnings outlook has improved.

This matters because markets that rely too heavily on a small group of large companies can become more vulnerable, especially amid rising inflation, higher bond yields and geopolitical uncertainty.

As a result, ASX mid-cap companies may become increasingly important. They often offer a balance of stability and growth potential, while giving investors broader exposure beyond just the market’s biggest names.

How to target ASX mid-caps 

For investors looking to target ASX mid-cap companies, one option to consider is the VanEck S&P/ASX MidCap ETF (ASX: MVE). 

It offers exposure to 50 established ASX-listed mid-cap companies across sectors, including industrials, healthcare, technology, resources and consumer businesses. 

According to VanEck, it provides investors with a diversified exposure to a segment of the market that has historically sat between the defensiveness of large caps and the growth potential of smaller companies.

The post Why ASX mid-cap shares are finally about to have their moment: Expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has positions in BHP Group. 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 BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Commonwealth Bank of Australia (ASX: CBA) and Macquarie Group Ltd (ASX: MQG) are two of the highest-quality financial shares on the ASX.

I would happily own both.

That is what makes this comparison interesting. I do not see this as a case of one good investment and one bad investment. I see it as a choice between two very different ways to invest in financial services.

CBA offers stability, scale, fully franked dividends, and a dominant position in Australian banking. Macquarie offers a more global, more varied, and potentially more flexible long-term growth story.

So, which one would I buy today?

The case for CBA shares

CBA is the easier business to understand.

It is Australia’s largest bank, with a huge base of household, business, and deposit customers. It has one of the strongest banking franchises in the country and, in my view, deserves its reputation as the highest-quality major bank.

CBA has scale, a trusted brand, strong digital banking capabilities, and deep customer relationships. Those advantages can help it defend margins, attract deposits, and keep customers engaged across home loans, transaction accounts, credit cards, business banking, and wealth-related services.

I also think CBA’s dividend profile remains a major attraction. Fully franked dividends can be very useful for Australian income investors, and CBA has long been one of the market’s most popular income shares.

However, the valuation is the key issue.

CBA shares often trade at a premium to the other major banks, and that premium can be justified when the business keeps executing well. But it also means investors are paying a lot for quality.

That does not make CBA a sell in my eyes. I still rate it as a buy for investors who want a dependable blue-chip financial share with income and resilience. I just think the upside case may be more measured from here.

The case for Macquarie shares

Macquarie is a very different financial stock.

It is not simply a bank. It is a global financial group with exposure to asset management, infrastructure, commodities, markets, advisory, capital flows, private markets, and the energy transition.

That makes the earnings profile lumpier than CBA’s. Some divisions can have strong years while others slow. Market conditions matter. Deal activity matters. Investor appetite matters.

But I think that flexibility is one of Macquarie’s greatest strengths.

Macquarie has shown over many years that it can move capital, people, and expertise into areas where it sees opportunity. It has built strong positions in infrastructure, green energy, commodities, and global asset management. These are not small themes. They are areas where large pools of capital may continue to move over the next decade.

That gives Macquarie a broader growth canvas than a domestic bank.

There is risk in that. Macquarie’s results can be harder to forecast, and investors need to accept more moving parts. But I like businesses that can adapt as the world changes, and Macquarie has a long record of doing exactly that.

Which would I buy?

If I could only buy one today, I would choose Macquarie shares.

But this is a close call because I think CBA remains a high-quality buy. But Macquarie offers the more interesting long-term opportunity in my view.

CBA is a brilliant domestic banking franchise, but it is still heavily tied to Australian credit growth, margins, deposits, housing, and the local economy.

Macquarie gives investors exposure to a wider set of global profit pools. Infrastructure investment, energy transition funding, commodities markets, private capital, and asset management all give it ways to grow that are not available to a traditional bank in the same way.

I also think Macquarie’s lumpiness can create opportunities. When conditions are softer, investors can become impatient. But for long-term shareholders, those quieter periods can sometimes be the price of owning a more adaptable business.

Foolish takeaway

I would not frame this as CBA losing. I think CBA remains one of the best blue-chip shares on the ASX and a stock I would be comfortable buying for income and quality.

But Macquarie is the one I would choose if I had to pick just one today.

The reason is not that it is safer or more predictable. It is that I think it has more ways to win over the next decade. For investors who can tolerate a less even earnings path, that global reach and adaptability could make it the more rewarding financial stock to own.

The post CBA shares vs Macquarie shares: Which ASX financial stock would I buy? appeared first on The Motley Fool Australia.

More reading

• Why ASX mid-cap shares are finally about to have their moment: Expert
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Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Xero Ltd (ASX: XRO) shares have been smashed over the past year, with the share price crashing around 62% from an all-time high of $196.52 recorded in June last year.

The ASX tech stock has faced several major headwinds over the past 12 months. 

The falling share price is mostly the result of a sector-side sell off of technology stocks. This followed rising concerns that AI could disrupt traditional software models. 

In late-2025 and early-2026 many investors were spooked by the idea that smarter, cheaper tools could reduce the need for subscription platforms like Xero. Sentiment for tech shares quickly turned south. 

At the same time, a sharp increase in the value of some ASX tech shares in 2025, including Xero, also sparked concerns that tech companies were overvalued and overdue a price correction. 

Where are Xero shares trading now?

At the time of writing, Xero shares are trading at $74.16 a piece.

For the year to date, the shares are now around 34% lower and they’re 60% below the trading value in late May last year.

Are Xero shares now too cheap to pass up?

Analysts are incredibly bullish on Xero shares, with widespread anticipation that we’ll see some significant upside over the next 12 months.  

Market Index shows brokers have a strong buy rating on the shares. They tip a 87% upside to $141.56 over the next 12 months.

TradingView data shows something similar. Out of 15 analysts, 14 have a buy or strong buy rating and one has a hold rating. They tip a potential average upside of up to 76% to $130.81 a piece over the next 12 months.

However, some analysts think the increase could be far steeper. The maximum $236.45 target price implies that Xero shares have the potential to soar 218% higher. It’s also an increase from a maximum $229.49 target price the analysts had a month ago.

What is expected to drive the tech shares higher?

I see Xero as an attractive long-term investment.

The company has a sticky subscription revenue, which means its customers are likely to keep paying for its services and products over a long time. Switching to an alternative accounting, invoicing, and payroll system would be time-consuming for businesses, so many customers could easily stay subscribed for years. 

This makes Xero’s revenue more predictable. 

At the same time, the company is still a relatively small market player. This means there is a huge amount of potential future growth globally. 

These growth opportunities include expansion in the UK and US, as well as payroll and workflow automation offerings. Xero is also actively expanding its presence and its product suite. 

The company’s latest FY26 result shows the company is growing, too. It posted a 31% hike in operating revenue in mid-May, and its adjusted EBITDA is up 18%.

The post Is it time to get greedy with Xero shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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 Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX shares that I think could make some of the best returns are ones that look like they could compound earnings at a strong pace over an extended period of time.

That’s why I think it’s a good idea for investors to look at businesses that have a long and impressive growth runway.

In my view, two of the ASX shares that could outperform the S&P/ASX 200 Index (ASX: XJO) over the next decade are the ones below.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is a fast-growing affordable jewellery retailer that focuses on younger shoppers with appealing products.

The ASX retail share‘s main growth tactic is to add more stores to its global network. In the FY26 half-year result, the company reported that between the end of FY25 and the end of the FY26 half-year period, it added 65 more stores, a rise of 6.3%.

Of those 65 locations, some of the highlights included four more stores in Australia, four in South Africa, 14 more in the UK, nine more in Germany, eight more in the US and nine more in Canada.

In my view, those core markets offer significant growth potential for Lovisa over the next decade.

I’m optimistic about how many more global stores the company can add in the next decade, particularly in countries where it has a small presence at this stage for the population size of the market, such as China, Vietnam, Spain, Poland, Canada and even the US.

In the HY26 report, the company reported more than 20% growth for its core revenue and net profit, which is an excellent rate of progress. I’m also hopeful its new business (initially in the UK) called Jewells can become a meaningful contributor in future years.

According to the forecast on CMC Invest, the business is projected to generate earnings per share (EPS) of $1.23 in FY28. That puts the ASX share’s valuation at the time of writing at less than 19x FY28’s estimated earnings.

Global X S&P World Ex Australia GARP ETF (ASX: GARP)

This exchange-traded fund (ETF) offers number of positives for investors.

For example, it invests in 250 global companies that have ‘growth at a reasonable price’ (GARP) characteristics.

The businesses in the portfolio need to have good growth with both strong sales and earnings growth.

They need to be good value, with an attractive price/earnings (P/E) ratio.

Finally, these businesses need to display quality, which is measured by the financial leverage and the return on equity (ROE).

By putting these elements together, that’s a powerful combination for potential returns.

Offering great businesses at appealing value could lead to market-beating returns in the long-term and outperform many other ASX shares.

The post 2 top ASX shares to buy and hold for the next decade appeared first on The Motley Fool Australia.

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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 Lovisa. The Motley Fool Australia has recommended Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I’d wager that most Australians would be quite familiar with most of the companies that make up the ‘Magnificent 7’, even though their home is half a world away.

Even if you have never invested in the likes of Microsoft Corporation (NASDAQ: MSFT) or Amazon.com Inc (NASDAQ: AMZN), chances are you have used their products or services, probably recently. Ditto with Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), Meta Platforms Inc (NASDAQ: META) and Apple Inc (NASDAQ: AAPL). Tesla Inc (NASDAQ: TSLA) and NVIDIA Corporation (NASDAQ: NVDA) are a little more niche. Even so, these last two of the seven are still household names, and possibly household presences.

Despite the ubiquity of the Magnificent 7 in Australian daily life, far fewer Australians would own shares of them directly. Saying that, international stock market investing has never been more popular in Australia. If an investor does own international stocks, there is a high chance that at least one of them will be a Mag 7 stock.

Personally, I directly own shares in five of the Magnificent 7. In fact, I have owned all seven of these ocmpaneis at various points (although never simultaneously).

Until quite recently, I thought of these positions as a small, although valuable portion of my overall portfolio. However, after a recent audit, I have discovered that I am far more invested in these seven stocks than I previously supposed.

The dominance of the Magnificent 7 stocks

It starts with an exchange-traded fund (ETF) that I own. As I have previously discussed, I recently sold my holdings in the BetaShares Nasdaq 100 ETF (AS:X NDQ) to buy a similar, but far cheaper ETF in the Schwab U.S. Large-Cap Growth ETF (NYSE: SCHG).

All seven of the Magnificent 7 are core holdings of this fund. As they are in almost every major US-based ETF listed on the ASX. That includes the iShares S&P 500 ETF (ASX: IVV) and the Vanguard MSCI Index International Shares ETF (ASX: VGS). Not to mention NDQ. Magnificent 7 stocks also sometimes pop up in the Schwab U.S. Dividend Equity ETF (NYSE: SCHD) and the iShares Core Dividend Growth ETF (NYSE: DGRO), which are also in my portfolio.

So that’s three.

Next, one of my largest investments is the listed investment company (LIC) MFF Capital Investments Ltd (ASX: MFF). This Buffett-esque LIC is a long-term holding of mine, and a favourite investment. As it happens, Alphabet, Amazon, Microsoft and Meta Platforms are all large positions in MFF’s portfolio. That’s four.

These components routinely pop up in yet another of my favourite, long-term holdings. That would be the VanEck Morningstar Wide Moat ETF (ASX: MOAT). That’s five major personal investments that are exposed to at least one Mag 7 stock. Outside my direct ownership of five of the Magnificent 7 stocks.

Don’t forget about your superannuation

The cherry on the cake comes in the form of my superannuation fund. Like most Australians, my super is partially invested in US stocks. And the Magnificent 7 are at the top of that list, too.

As it turns out, these seven US tech titans are far heavier in my portfolio and my overall wealth than I had previously thought.

I do view most of the Magnificent 7 as companies of the highest calibre. You don’t get to where they are now without being truly exceptional. As such, this high exposure doesn’t bother me.

However, there’s a big chance that other ASX investors out there are in the same boat. Thus, it may be worth checking out your own investments and seeing just how deep the Mag 7 goes. My exposure tolerance to these seven stocks may be higher than yours.

The post ASX investors: Are you overinvested in the Magnificent 7 without knowing it? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.