Author: openjargon

I’m always on the hunt for ASX share opportunities, and I’m going to highlight two stocks that brokers think are buys.

I can see why they’re attractive opportunities – their valuations are a lot lower and they have compelling growth plans that could power their earnings higher.

Experts rate the below businesses as a buy, and I’m excited by their potential.

Nick Scali Ltd (ASX: NCK)

Nick Scali is a furniture business with stores in Australia, New Zealand and the UK. It also operates Plush stores in Australia.

According to CMC Invest, of eight recent analyst ratings on the business, five of those were buys. The average price target of those ratings is $21.38, suggesting it could rise by around 45%, from the time of writing, over the next 12 months.

I do think the Nick Scali share price is significantly undervalued, considering it has fallen more than 40% since its 2026 high in January. If there’s a ‘right’ time to buy a retailer, it’s when market is worried about consumer spending for the foreseeable future.

Nick Scali is a great business, with a solid return on equity (ROE), an impressive gross profit margin and significant growth plans across its existing markets. It plans to add dozens of stores in the coming years in Australia and the UK, which should significantly help its gross profit margin and other margins.

Just like earlier this decade, I don’t think this high inflation period is going to last forever, so I’d use this period of temporary share price weakness with the ASX share to buy. It may take longer than a year to deliver a 40% return, but I’m optimistic it will regain that lost ground when interest rates are heading down rather than upwards.

Collins Foods Ltd (ASX: CKF)

Collins Foods is a large franchisee of KFC outlets in Australia, Germany and the Netherlands.

According to CMC Invest, of 11 recent analyst ratings on the business, eight of those were buys. The average price target of those ratings is $12. That suggests a possible rise of 43%, at the time of writing, over the next year.

Collins Foods is another ASX share that’s suffered a decline – it’s down around 30% from the height in November 2025.

I think the business has significant room to expand its European and Australian networks, particularly in Europe, through both a mixture of acquisitions and new locations.

The business is continuing to grow at a pleasing pace. In mid-March, the company gave a trading update. In the second half of FY26, Australian total sales increased by 6.2%, German sales increased 9.1% and Dutch sales grew 4.1%.

It said it’s expecting its FY26 underlying net profit after tax (NPAT) to grow in the “mid-to-high teens”.

According to the projections on Commsec, the Collins Foods share price is valued at 16x FY26’s estimated earnings and it could grow earnings by another 31% in FY27.

The post Brokers say these 2 ASX shares are highly undervalued — here’s why I agree appeared first on The Motley Fool Australia.

More reading

• CSL and Wesfarmers among scores of ASX shares hitting fresh 52-week lows
• 3 star ASX dividend income stocks for the rest of 2026
• Bell Potter names the best ASX dividend shares to buy
• 2 ASX 200 stocks that could rise 50%
• Forget Westpac shares, I’d buy these ASX dividend stocks

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Collins Foods and Nick Scali. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are plenty of wonderful S&P/ASX 200 Index (ASX: XJO) shares that could be excellent investments in May thanks to their quality and valuation.

Some blue chips have an incredible ability to regularly deliver profit growth, unlocking long-term capital growth and rising dividends.

Let’s look at two of the highest-quality blue chips that experts have rated as buys.

Macquarie Group Ltd (ASX: MQG)

Macquarie is a global investment bank that is rapidly becoming a major player in Australia’s banking scene, too.

It has four divisions that help generate earnings for the business in different economic conditions. There’s the banking and financial services (BFS) segment, the global investment bank division, Macquarie Asset Management (MAM), and the commodities and global markets (CGM) division.

The global investment bank and CGM segments can see significant volatility, depending on what’s happening in the global economy, while BFS and MAM typically don’t see large declines in their profitability.

Excitingly, FY26 profit growth was very strong for the ASX 200 share and showed it’s able to perform even during difficult economic conditions.

FY26 net profit jumped 30% year over year, to $4.85 billion, with the FY26 second half net profit rising by 93% to $3.2 billion. It decided to pay a final ordinary dividend per share of $4.20, while the FY26 final dividend came to $7 per share.

The CGM business saw net profit soar 49% to $4.2 billion, MAM net profit increased 27% to $2.6 billion, BFS net profit rose 17% to $1.6 billion, and Macquarie Capital net profit soared 43% to $1 billion.

At the time of writing, according to CMC Markets, there are currently five buy ratings on the business, with the highest price target being $270, suggesting a 14% rise (at the time of writing) within the next year.

Transurban Group (ASX: TCL)

Transurban is one of the world’s largest listed toll road operators, with roads in NSW, Queensland, Victoria, and North America.

Australia’s major cities’ populations continue growing, increasing the number of vehicles on the road. This makes Transurban’s roads increasingly valuable, particularly for its ability to offer significant time-saving routes for drivers, making the tolls worthwhile where that time is valuable.

In the three months to March 2026, the ASX 200 share reported total average daily traffic (ADT) of 3% across its roads, including 0.7% growth in Sydney and 1.4% growth in Melbourne during the month of March, despite the impacts of the Middle East conflict.

I’m expecting revenue to grow strongly in FY27 if inflation remains elevated during the rest of 2026. Additionally, the occasional expansion of Transurban’s toll road portfolio can further grow earnings and cash flow.

With rising cash flow, the business can deliver rising payouts, which could be attractive during this uncertain period.

According to CMC Invest, there are three buy ratings on the business, with the highest price target at $16.10, suggesting (at the time of writing) a possible 11% rise within a year.

The post 2 high-quality ASX 200 shares experts rate as buys appeared first on The Motley Fool Australia.

More reading

• Money to invest? I’d follow Warren Buffett to get rich
• How to build a $1,000 a month passive income from the ASX
• 3 key takeaways from the Macquarie results
• Why Macquarie, QBE, Tabcorp, and Westpac shares are dropping today
• New Macquarie dividend: Here’s everything you need to know

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

Term deposits can be appealing to savers wanting to protect their capital while generating a bit of passive income. However, there are a few reasons why ASX dividend shares appeal to me more.

Currently, it seems like an appealing time for term deposits since RBA has raised interest rates several times this year. This has lifted the potential interest rate that Aussies can get from their financial institution. It’s quite easy to find a term deposit offering a 5.5% interest rate these days.

However, I don’t think term deposits are the right choice for me to build wealth.

Capital growth

While a term deposit may protect money from volatility and declines, it also means there’s no chance of delivering long-term capital growth either.

When we invest in growing (ASX) shares that are increasing their underlying value, the investment can appreciate over time.

As someone in their 30s, if I’m investing for passive income, I’d rather invest $10,000 in an ASX share that could rise to $11,000 in value over a year (and more in the longer-term) compared to putting $10,000 into a term deposit which is guaranteed to stay valued at $10,000 after the term, excluding the generated passive income.

Compounding is a very powerful tool and I plan to utilise that as much as I can in the years ahead. But, I’ll note that I do have a separate cash amount as an emergency fund in a high interest savings account.

One of the ASX dividend shares I’m very optimistic of capital growth is the exchange-traded fund (ETF) WCM Quality Global Growth Fund – Active ETF (ASX: WCMQ). It targets a 5% distribution yield and aims for businesses with strengthening economic moats and a corporate culture that fosters the strengthening of those competitive culture.

WCMQ ETF’s long-term investment returns have been compelling, enabling for capital growth of the fund value while still paying its 5% distribution yield.

Dividend growth

The other great reason to own ASX dividend shares is because they can offer growth of the passive income without needing to retain the money to earn mor.

Let’s run through why term deposits aren’t attractive to me on the income side. Let’s say there’s a $10,000 term deposit with a 5% interest rate, it would make $500 of annual passive income. If the saver wanted to spend that $500, the $10,000 could only generate another $500 over the next year. Term deposit holders can re-invest the interest, but then there’s no useable cash for spending.

With an ASX dividend share, a business can pay its dividend and organically grow its payout because of business growth. With $10,000 in an ASX dividend share with a 5% dividend yield, it would generate $500 of passive income and an investor could spend that. The business could hike its dividend by 10%, unlocking $550 of passive income, without any re-investment needed.

Of course, re-investing the dividends would mean supercharging wealth building and the annual dividend flow.

One of my favourite ideas for dividend growth is MFF Capital Investments Ltd (ASX: MFF), a listed investment company (LIC) that targets a global portfolio of high-quality, growing shares. Its guided FY26 dividend translates into a grossed-up dividend yield of 6.3%, including franking credits. Its FY26 payout is 23% higher than FY25 and I believe it could increase its annual dividend by another 19% in FY26.

But, there are plenty of ASX dividend shares out there offering the potential for both dividend growth and capital growth, of course.

The post Forget term deposits! I’d buy these ASX dividend shares instead appeared first on The Motley Fool Australia.

More reading

• How to invest $5,000 for passive income in superannuation?
• How much is needed in superannuation to target $10,000 of monthly passive income?
• How to become a millionaire on a $60,000 salary
• Why this ASX dividend share is a retiree’s dream
• How to boost your income with $50,000 of annual dividends

Motley Fool contributor Tristan Harrison has positions in Mff Capital Investments and Wcm Quality Global Growth Fund. 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 Mff Capital Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Warren Buffett built his fortune by doing something that sounds simple, but is surprisingly hard to follow.

He bought high-quality businesses, paid sensible prices where possible, and then held them for a very long time.

That is the approach I would use if I had money to invest in ASX shares today.

I would not try to trade every market move or guess what happens next month. I would focus on owning businesses that can keep growing earnings, paying dividends, and becoming more valuable over time.

Warren Buffett buys businesses, not tickers

The first Buffett lesson I would follow is to think like a business owner.

A share is not just a code on a screen. It is a small ownership stake in a real company.

That changes how I look at the market.

Instead of asking whether a share price might rise next week, I would ask whether the company has a strong competitive position, good management, and a long runway for growth.

On the ASX, that could lead investors toward businesses such as Wesfarmers Ltd (ASX: WES), CSL Ltd (ASX: CSL), Commonwealth Bank of Australia (ASX: CBA), or ResMed Inc. (ASX: RMD).

These are very different companies, but I think they all have qualities Buffett would appreciate: strong brands, scale, cash generation, and positions that are difficult for competitors to copy.

Look for durability

The second lesson is durability.

Warren Buffett often talks about wanting businesses that can remain strong for many years. That is important because compounding needs time.

I think this is where investors can make a big mistake. They buy exciting shares, but the business model does not have enough staying power.

For me, the better approach is to look for companies that customers keep using and that competitors struggle to displace.

That could include toll road operator Transurban Group (ASX: TCL), supermarket giant Woolworths Group Ltd (ASX: WOW), or healthcare leaders like CSL and ResMed.

These businesses may not always look cheap, and they will still have difficult periods. But I think their essential nature gives them a better chance of producing solid long-term returns.

Let compounding do the work

The third part of the Buffett approach is patience.

This is where many investors fall short.

If I bought a quality ASX share, I would want to give it time to grow. That means allowing earnings to compound, dividends to build, and management to reinvest for the future.

A business that grows earnings by 8% to 10% a year can become far more valuable over a decade. Add dividends on top, and the total return can be powerful.

This is not guaranteed, of course. Some investments will disappoint.

But I think the overall strategy is sound: buy good businesses, reinvest dividends where possible, and avoid selling just because the share price has a weak year.

Do not overpay blindly

There is another part of Warren Buffett’s strategy that I think is important.

Quality is not enough on its own. Price still matters.

Even a great company can be a poor investment if investors pay too much for it.

That is why I would be especially interested in ASX shares where the market has become more cautious. When quality companies fall out of favour, investors may get a better entry point.

This is why beaten-down quality names such as CSL, Cochlear Ltd (ASX: COH), Xero Ltd (ASX: XRO), or WiseTech Global Ltd (ASX: WTC) have become particularly interesting in 2026.

Foolish takeaway

If I had money to invest today, I would follow the Buffett approach: buy quality ASX businesses, focus on the long term, be patient, and pay attention to valuation.

Getting rich from shares usually does not happen quickly. But with the right businesses and enough time, I think the ASX can still be a powerful place to build wealth.

The post Money to invest? I’d follow Warren Buffett to get rich appeared first on The Motley Fool Australia.

More reading

• How to build a $1,000 a month passive income from the ASX
• 3 cheap ASX shares for value investors to buy today
• 9,269 shares of this high-yield ASX dividend stock pays an income equal to the Age Pension
• ASX share volatility is rising, are you making this mistake?
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Grace Alvino has positions in CSL, Commonwealth Bank Of Australia, Transurban Group, and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Cochlear, ResMed, Transurban Group, Wesfarmers, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended ResMed, Transurban Group, WiseTech Global, Woolworths Group, and Xero. The Motley Fool Australia has recommended CSL, Cochlear, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The average age for retirement in Australia is around 64 years old. At this point you can access your superannuation, and you’re only a few years away from receiving the Age Pension (if you’re eligible).

But you don’t want to wait until you retire to work out if you have enough money to fund the lifestyle you want. Your retirement planning needs to start a lot earlier than that.

By age 54, or around 10 years out from your intended retirement age, you need to be aware of exactly how much you have in your superannuation, how much you need to retire, and how to bridge that gap (if there is one).

Here’s a rundown of everything you need to know.

How much will retirement cost me?

The benchmark for a comfortable retirement recently increased off the back of higher inflation. 

According to Association of Superannuation Funds of Australia (ASFA) data, a comfortable retirement lifestyle will now cost individuals around $54,840 a year, or for couples, this can be closer to $77,375 a year. 

The cost of a modest retirement is a lot less. In order to live a modest retirement lifestyle at age 60, individual Australians can expect to need $35,503 per year, or for a couple this would be closer to $51,299 per year. 

What’s the difference between a comfortable and a modest retirement?

ASFA defines a comfortable retirement as one which allows Australians to maintain a good standard of living. It assumes you’ll keep top-level private health insurance, will own a reasonable car brand, undertake regular leisure activities, have funds for home repairs and renovations, go for an occasional meal out, and maybe even an annual domestic trip (or occasional overseas one).

A modest retirement is defined as one which allows Australians to cover expenses slightly above the full Age Pension payment. This assumes you’ll hold basic health insurance, a cheap car model (or none at all), a limited home repair budget, minimal utility expenses, limiting dining out, and infrequent travel. 

It goes without saying that nearly all Australians aspire for a comfortable retirement lifestyle.

So, how much should I have in my superannuation today?

To fund a comfortable retirement, ASFA has calculated that single Australians will need a superannuation balance of around $630,000, or couples would need $730,000.

In order to reach that goal, at around 10 years out from retirement you should have close to $439,000 in your superannuation.

Help! I’m 10 years out and my superannuation isn’t ready. What can I do right now to boost my balance?

Don’t panic.

The good news is that, with 10 years left to go, at age 54 you still have time to build up your superannuation balance to be able to live comfortably when you stop work.

First, you want to check that your superannuation fund is performing well, and that its risk profile matches your own.

Then you can look to make additional concessional or non-concessional contributions, whether this is salary sacrificing or after-tax payments (within your annual limits). 

If you don’t have the funds to add more money yourself, you can also look into government initiatives. There’s the downsizer contributions rule, the bring-forward rule, the government co-contribution rule, and many others. These can help boost your balance just a little bit further. 

The post 10 years until retirement: Is your superannuation ready? appeared first on The Motley Fool Australia.

More reading

• ASX share volatility is rising, are you making this mistake?
• Here are the top 10 ASX 200 shares today
• Why is this ASX financial stock dropping despite solid results?
• The ASX 200 just suffered its biggest fall in 7 weeks. Here’s what’s going on
• Alcoa announces June 2026 dividend

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 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.

I’m a big fan of buy and hold investing and believe it is one of the best ways to grow your wealth.

To demonstrate just how successful this investment strategy can be with shares, I like to see how much a single $10,000 investment in certain ASX 200 shares 10 years ago would be worth today.

Let’s see how investments in these shares have fared during this time:

Breville Group Ltd (ASX: BRG)

The first ASX 200 share that has delivered the goods for investors is Breville.

It is one of the world’s leading appliance manufacturers and the owner of brands such as Breville, Sage, Kambrook, Baratza, and LELIT.

Breville has been growing its sales and earnings at a solid rate over the past decade thanks to its investment in research and development, global expansion, and acquisitions in the at-home coffee market.

This has led to Breville’s shares generating strong returns over the past decade.

They have achieved an average total return of 14.1% per annum since 2016, which means that a $10,000 investment would have grown to be worth over $37,000 today.

NextDC Ltd (ASX: NXT)

Another ASX 200 share that has achieved market-beating returns over the past decade is NextDC.

It is an Australian technology company with a focus on innovative data centre outsourcing solutions, connectivity services, and infrastructure management software.

The data centre market has been a great place to be. Thanks to the shift to the cloud and the artificial intelligence (AI) megatrend, demand for capacity in its centres has been insatiable. This has led to NextDC’s revenue and operating earnings growing at a rapid rate.

Since 2016, its shares have generated an average return of 17.6% per annum. This means that a $10,000 investment in NextDC shares back then would have grown to be worth over $50,000 today.

TechnologyOne Ltd (ASX: TNE)

Another ASX 200 share that has beaten the market over the past 10 years is enterprise software provider TechnologyOne.

Thanks to its successful transition to a software-as-a-service business model, TechnologyOne has been growing its annual recurring revenue (ARR) and earnings at a consistently strong rate for many years.

And with management confident it can double in size every five years, its shares have been popular with Aussie investors.

This has led to TechnologyOne shares delivering a total average return of 19.1% per annum. This would have turn a $10,000 investment in 2016 into over $57,000 today.

The post $10,000 invested in these ASX 200 shares 10 years ago is worth… appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Brokers name 3 ASX shares to buy right now
• Why Block, News Corp, REA Group, and TechnologyOne shares are storming higher today
• 7 ASX 200 shares just upgraded this week
• ASX 200 tech stock upgraded by Bell Potter after AI contract win

Motley Fool contributor James Mickleboro has positions in Nextdc and Technology One. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If an ASX investor is after exposure to some of the United States’ best growth shares, the BetaShares Nasdaq 100 ETF (ASX: NDQ) is one of the easiest, simplest and most popular avenues to take.

This exchange-traded fund (ETF) allows Australian investors to own a piece of the 100 largest non-financial shares listed on the Nasdaq stock exchange. The Nasdaq is the exchange known for housing most of the popular tech shares that the US is famous for. You have the ‘Magnificent 7’ as the headliners, of course, with the likes of Apple, Amazon, NVIDIA and Alphabet dominating the top echelons of this index fund.

But NDQ also offers decent exposure to smaller tech stocks like Netflix, PayPal, Palantir, Qualcomm, Texas Instruments, and Shopify.

With all of these impressive names under one NDQ roof, many ASX investors have NDQ in their ASX portfolios. I used to be one of them, attracted by the easy exposure to what are undeniably some of the best businesses in the world. But not anymore.

I don’t have a problem with the BetaShares Nasdaq 100 ETF.

However, I simply found what I believed to be a superior alternative.

NDQ is a great ETF. But it does not come cheap. Unlike other ASX index funds, NDQ does not charge a cheap-as-chips management fee of under 0.1%. In fact, NDQ will cost investors 0.48% per annum, or $48 per year for every $10,000 invested. That’s a bit steep for my liking, so a few months ago, I sold my NDQ units and redeployed the capital into a similar ETF that charges a fraction of NDQ’s cost.

That ETF was the Schwab U.S. Large-Cap Growth ETF (NYSE: SCHG).

NDQ, but better?

Yes, this is a US-based ETF, meaning ASX investors will need to buy it on a platform that allows US trading. But aside from this hurdle, I see no reason to own NDQ over SCHG. For one, SCHG invests in a very similar basket of stocks to NDQ. You’ll find all of the names mentioned above in its portfolio, albeit with different weightings. You’ll even get some tech stocks that aren’t on the NASDAQ, and thus, the NDQ ETF. These include Visa, Uber Technologies, and Mastercard.

But the best part? SCHG charges an annual management fee of just 0.04%. That’s more than ten times cheaper than NDQ.

The difference between 0.48% and 0.04% might not look like a significant one. But it can make a real difference to investor returns over long periods of time. That’s why I switched to SCHG, and haven’t looked back since. Something to consider if you like having the US’s top growth stocks in your ASX share portfolio.

The post I love the BetaShares Nasdaq 100 ETF (NDQ). Here’s why I sold it. appeared first on The Motley Fool Australia.

More reading

• The best way to invest in AI on the ASX
• 3 incredible ASX ETFs to buy to supercharge your portfolio
• Why I’d buy these ASX ETFs if I had $500 spare
• Here’s why I think ASX growth investors should embrace index investing in 2026
• 3 reasons I’d buy and hold the NDQ ETF for 10 years

Motley Fool contributor Sebastian Bowen has positions in Alphabet, Amazon, Apple, Mastercard, Netflix, Schwab Strategic Trust – Schwab U.s. Large-Cap Growth ETF, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, BetaShares Nasdaq 100 ETF, Mastercard, Netflix, Nvidia, Palantir Technologies, PayPal, Qualcomm, Shopify, Texas Instruments, Uber Technologies, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: short June 2026 $50 calls on PayPal. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Mastercard, Netflix, Nvidia, PayPal, Shopify, and Visa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Last week, the Reserve Bank of Australia (RBA) delivered another blow to mortgage holders by increasing the cash rate for a third meeting in a row.

Is this where interest rates peak? Or are there more hikes to come? Let’s see what the economics team at Westpac Banking Corp (ASX: WBC) is expecting from the central bank.

The RBA’s decision

As mentioned above, on Tuesday of last week, the RBA decided to increase the cash rate target by 25 basis points to 4.35%.

Commenting on the decision, RBA governor, Michele Bullock, said:

As expected, developments in the Middle East are having an impact on inflation. Higher fuel prices are adding to inflation and there are indications that this is likely to have second-round effects on prices for goods and services more broadly. This inflation impulse is in addition to the high inflation recorded around the start of 2026, reflecting capacity pressures in the economy.

In light of these considerations, the Board assessed that inflation is likely to remain above target for some time and that the risks remain tilted to the upside, including to inflation expectations. It was therefore judged appropriate to increase the cash rate target.

Where next for interest rates?

Unfortunately for borrowers, Westpac believes that further interest rate hikes will be necessary to tame inflation.

However, Westpac’s chief economist, Luci Ellis, doesn’t believe that it will be another back-to-back hike. She thinks the RBA will want to pause in June to see how the Middle East conflict plays out. Ellis said:

We still expect two more RBA rate hikes after the one this week. However, as we flagged as a consideration on Tuesday, we now think that the Monetary Policy Board (MPB) will want to pause in June. In the post-meeting media conference, Governor Bullock characterised the three rate hikes so far as dealing with the high inflation issue that already existed before the conflict in the Middle East started, and that this “gives space” for the MPB to see how the conflict plays out.

Together with the dissenting vote, we read this as saying that another back-to-back hike in June is no longer a better-than-50% chance. It is not a zero chance, either, but it should not be the base case.

Westpac is forecasting the next interest rate hike in August, followed by another in September. This will take the cash rate to 4.85%.

For the sake of mortgage holders, here’s hoping the RBA won’t have to make these moves. But time will tell if that is the case.

The post Here’s what Westpac says the RBA will do with interest rates next appeared first on The Motley Fool Australia.

More reading

• ASX share volatility is rising, are you making this mistake?
• Why Macquarie, QBE, Tabcorp, and Westpac shares are dropping today
• 7 ASX 200 shares just upgraded this week
• The ASX 200 just suffered its biggest fall in 7 weeks. Here’s what’s going on
• Why is the Westpac share price falling today?

Motley Fool contributor James Mickleboro 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.

ASX shares with the ability to expand the most in the next five years could be great investments because of their future profit potential.

The three businesses I want to highlight are relatively small, are growing at a fast pace, and are delivering rising profit margins.

I’m very bullish on what the below businesses could achieve in the coming years. This is why I’m already a shareholder and would happily buy more.

Siteminder Ltd (ASX: SDR)

Siteminder provides software to hotels around the world to help them with their operations and generate the most revenue from their rooms, including one offering that enables Siteminder to change room prices throughout the year on behalf of the hotel to maximise earnings and occupancy.

The global digitalisation trend is a very useful tailwind for Siteminder. It’s winning thousands of hotels from around the world as subscribers, with a recent focus on larger hotels.

Siteminder has a goal of increasing its annual recurring revenue (ARR) at 30% per year, which is an excellent goal. While it’s not quite there, revenue is currently rising at more than 20% per year through winning new subscribers and increasing its average revenue per user (ARPU) through selling additional modules.

The business is also seeing rising profit margins thanks to the operating leverage of software because costs aren’t increasing at the same pace.

Guzman Y Gomez Ltd (ASX: GYG)

GYG is a Mexican food business with big ambitions in both Australia and internationally.

The ASX share is aiming to quadruple its Australian network to around 1,000 locations within the next 20 years. It’s currently adding around 30 locations annually with a goal to increase that rate in the coming years.

Guzman Y Gomez is currently seeing total network sales growth of around 20% year-over-year thanks to both more restaurants and mid-single-digit comparable sales growth.

It currently has a presence in Singapore, Japan and US, with the Asian markets delivering pleasing double-digit growth. The key market of Australia is growing strongly, and the international markets are a compelling bonus.

As a bonus, the business is paying a dividend, so it could deliver pleasing passive income in the coming years.   

Tuas Ltd (ASX: TUA)

Tuas is a Singapore-based telecommunications business focused on providing mobile services.

The company grew its active mobile services by 21.7% to 1.4 million in the FY26 half-year result. Revenue also rose by 26% to $91.9 million and underlying operating profit (EBITDA) increased 27% to $42.1 million.

As you can see, the business is growing at a strong double-digit rate. This is rapidly increasing its intrinsic value, particularly as its underlying profit margins are increasing.

Excitingly, Tuas is acquiring a Singaporean competitor called M1 which will add significant profit generation to the overall business and remove one of its main competitors from the market.

Additionally, in the coming years, I’m hopeful it will expand into other Asian neighbour countries which could expand its addressable market. Over the long-term, I think it could become a sizeable player in the South East Asia.

The post 3 ASX shares to buy for magnificent long-term growth appeared first on The Motley Fool Australia.

More reading

• Down 60%, why I’d invest $3,000 in this ASX tech share now
• 2 ASX growth shares to buy now while they’re on sale
• These are the 10 most shorted ASX shares
• How I would invest $10,000 across ASX growth shares in May
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tristan Harrison has positions in Guzman Y Gomez, SiteMinder, and Tuas. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended SiteMinder. The Motley Fool Australia has positions in and has recommended SiteMinder. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A $1,000 a month passive income from ASX shares is a big target, but I think it becomes less intimidating when it is treated as a project rather than a single investment decision.

For me, the starting point is not asking which share has the biggest dividend yield today. It is asking what kind of portfolio could still be paying income years from now.

How I would approach it

If I were trying to build $1,000 a month from the ASX, I would think about the portfolio in layers.

The first layer would be reliable dividend payers. These are the companies I would expect to keep paying through different market conditions.

That could include names like Telstra Group Ltd (ASX: TLS), Transurban Group (ASX: TCL), Woolworths Group Ltd (ASX: WOW), and Commonwealth Bank of Australia (ASX: CBA). They all have different risks, but they also sit in parts of the economy that people use regularly: communications, toll roads, groceries, and banking.

I think that kind of everyday relevance is useful when building an income portfolio.

Add some higher-yield exposure carefully

The second layer would be higher-yield shares or income-focused ETFs.

This is where investors might look at stocks such as HomeCo Daily Needs REIT (ASX: HDN) or Harvey Norman Holdings Ltd (ASX: HVN), depending on valuation and outlook.

An ETF such as Vanguard Australian Shares High Yield ETF (ASX: VHY) could also help spread the risk across a wider basket of dividend-paying companies.

I would be careful here. A high yield can be attractive, but it can also signal pressure on the business or a dividend that may not be sustainable.

That is why I would prefer a mix rather than relying too heavily on one or two generous dividend payers.

Use growth to fund future income

The third layer is the one I think investors often overlook.

To build a serious passive income stream, I would want some capital growth as well.

A portfolio that only focuses on income from day one might grow too slowly. By including some businesses with the ability to lift earnings and dividends over time, the income target can become easier to reach.

That could include quality compounders such as Wesfarmers Ltd (ASX: WES), Goodman Group (ASX: GMG), or even a broad ETF such as the Vanguard MSCI Index International Shares ETF (ASX: VGS).

These may not provide the highest income today, but they can help the portfolio become larger over time. A larger portfolio can then produce more income later.

What size portfolio is needed?

The maths depends on yield. A portfolio yielding 4% would need around $300,000 to generate $12,000 a year, or $1,000 a month.

At a 5% yield, the required portfolio falls to $240,000.

At 6%, it falls again to $200,000.

Personally, I would be cautious about building the whole plan around a 6% yield. I think a more balanced target of 4% to 5% is healthier because it leaves room for quality and diversification.

Foolish takeaway

For me, building a $1,000 a month passive income from the ASX is about building a layered portfolio: reliable dividend payers, some carefully chosen higher-yield exposure, and enough growth to keep pushing the portfolio forward.

Done patiently, with reinvested dividends and regular additions, I believe the ASX can be a powerful place to build a meaningful second income over time.

The post How to build a $1,000 a month passive income from the ASX appeared first on The Motley Fool Australia.

More reading

• How to make $12,000 of passive income from these ASX ETFs
• 9,269 shares of this high-yield ASX dividend stock pays an income equal to the Age Pension
• How much do I need to invest in ASX dividend shares for a retirement income of $5,000 per month?
• Buy, hold, sell: ARB, Aurizon, and Goodman shares
• The ASX 200 just suffered its biggest fall in 7 weeks. Here’s what’s going on

Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia, Transurban Group, and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group, Transurban Group, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Harvey Norman, Telstra Group, Transurban Group, and Woolworths Group. The Motley Fool Australia has recommended Goodman Group, HomeCo Daily Needs REIT, Vanguard Australian Shares High Yield ETF, Vanguard Msci Index International Shares ETF, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.