Author: therawinformant

The coronavirus pandemic has had a significant effect on ASX shares in 2020. It’s initial onset sparked the bear market in February and March but then also saw many ASX shares surge with changing consumer behviour resulting from lockdown restrictions. Whilst Victoria is still battling a second wave, I believe that even as the economy emerges from the pandemic, some ASX shares will continue benefitting from changing consumer preferences. Despite the phenomenal rally in their share prices already over the past year, I’m confident the following three ASX shares are still well positioned for continued growth over the coming years.

3 ASX shares to continue benefitting from coronavirus

Marley Spoon AG (ASX: MMM)

I was really impressed by this company’s latest quarterly report. After a significant rally in the past year of a whopping 410.94% (at time of writing), I still believe the Marley Spoon share price has further to run. Particularly because of rising coronavirus cases in Victoria and along the east coast of Australia right now.

However, the uptick in services like those offered by Marley Spoon may also represent a structural change in how people buy their groceries. Marley Spoon’s chairman, Deena Shiff told shareholders this week that “Looking beyond the second quarter results which we released today, the acceleration of demand has not only brought forward our point of operating EBITDA (earnings before interest, tax, depreciation, and amortisation) profitability, but we also believe, represents a structural change in the markets in which we operate”.

In my view, we could be witnessing just the beginning of a very bright future for the Marley Spoon share price. 

Goodman Group (ASX: GMG)

I believe Goodman Group is benefitting from the shift to online shopping, particularly due to the company’s warehouses. During a time when other companies are eliminating, cutting or deferring dividends, Goodman Group was able to maintain a 15 cent per unit distribution to investors, payable next month.

Additionally, the Goodman Group share price has recently reached a 52 week high of $17.14. Its share price has, however, pulled back slightly from this to be currently trading at $16.96.  

In a May update, the group stated “Despite the challenging global environment, customer demand in the online, logistics, food, consumer goods and digital economy, is supporting portfolio fundamentals and development activity”. As a result, Goodman Group has a high occupancy rate for its properties of 97.5% and strong demand for its properties continue.

Kogan.com Ltd (ASX: KGN)

Earlier this month, Kogan announced a business update showing continued strong growth in its business across both sales and profitability. As consumers are shifting to online purchases in increasing numbers, I believe the company could continue to be a beneficiary.

Founder and CEO, Ruslan Kogan said “In early July we celebrated four years since listing the company on the ASX, and we are now proud to have delivered four consecutive years of significant growth in sales and earnings.” I believe this trend could continue well into the future as consumers are growing more accustomed to online shopping. 

Furthermore, Kogan recently undertook a capital raising to provide the company with the financial flexibility to act quickly on future opportunities and acquisitions. 

On the down side, however, Kogan is awaiting a penalty decision from a recent Federal Court Judgement which has caused the company’s share price to take a tumble from to its record high. Despite this, the Kogan share price is up a staggering 241% in the past year. 

More reading

• Why AMP, FlexiGroup, Marley Spoon, & Origin shares are tumbling lower
• Coles and Wesfarmers share prices reach for new highs. Should you invest?
• A dirt-cheap ASX dividend share to add to your portfolio today
• Results: Marley Spoon share price surges 40% on market update
• Why Afterpay, Fortescue, Marley Spoon, & Splitit shares are racing higher

Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com 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 ANZ region may not have a tech sector anywhere near the size of those in the United States, Europe, and China, but it certainly is home to a good number of quality tech companies. Many of which I believe are worthy of a spot in most portfolios.

Two of my favourites are listed below. Here’s why I like them:

Altium Limited (ASX: ALU)

Altium is easily one of my favourite tech shares on the Australian share market. It is a software-as-a-service company that provides an award-winning printed circuit board (PCB) design platform. PCBs are the small boards you find in almost all electronic devices. Given the proliferation of electronic devices due to the rapidly growing IoT and AI markets, demand for its software has been growing at a very strong rate in recent years.

The good news is that management doesn’t expect this demand to ease any time soon. In FY 2020 it expects to have just over 50,000 software subscriptions. It is then targeting market domination and 100,000 subscriptions by FY 2025. Given the quality of its software and its leadership position in the industry, I’m confident Altium will achieve its goals.

Nearmap Ltd (ASX: NEA)

Nearmap is a leading aerial imagery technology and location data company. It allows businesses to access high resolution aerial imagery, city-scale 3D datasets, and integrated geospatial tools. What I like about this product is that it means users can conduct accurate virtual site visits without needing to leave the home or office. This ultimately enables informed decisions, streamlined operations, and significant cost savings.

In FY 2020 Nearmap expects to report annualised contract value of $103 million to $107 million in FY 2020. While this is a large number, it is only a very small slice of a global aerial imagery market which is estimated to be worth US$10.1 billion. Due to the quality of its offering, which has been boosted by the release of Nearmap AI this year, I beleive the company in a position to capture a growing slice of this market over the next decade. This should drive strong recurring revenue growth and could propel the Nearmap share price notably higher.

More reading

• Is this your last chance to buy Altium shares for a good price?
• These could be outstanding buy and hold options for ASX investors
• 2 ASX shares to buy and 2 to avoid as deflation bites
• WAAAX or FAANG? Which ASX tech shares to buy in 2020
• 3 of the best ASX tech shares to buy and hold until 2030

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia has recommended Nearmap 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 Origin Energy Ltd (ASX: ORG) share price has fallen 4.26% so far today after the energy provider released its quarterly report for the period ending June 2020.

Origin reported that the COVID-19 pandemic has impacted natural gas and electricity demand, with some customers facing financial difficulties. But Origin received record distributions from the Australia Pacific LNG joint venture (APLNG), with the joint venture delivering record production in FY20. 

What does Origin Energy do?

Origin Energy operates in the electricity and gas markets. One of Australia’s largest energy retailers with approximately 4.2 million customers, it services both large energy customers and the residential market.

Origin is a key player in Australia’s energy supply chain, involved in power generation, including wind and solar technologies, as well as gas exploration and production. The company has a 47.5% interest in the APLNG joint venture, which is Australia’s largest producer of coal seam gas. 

What did Origin report? 

Origin received record cash distributions from the APLNG joint venture of $1,275 million in FY20. This was at the top end of guidance and up from $974 million in FY19. The joint venture delivered record production. Full year revenue, however, declined 5% with increased production offset by gas inventory movements and lower domestic prices. Its gas production in the June quarter declined 3% in response to low demand as a result of the COVID-19 pandemic. 

COVID-19 has had noticeable impacts on Origin’s electricity demand. While residential demand increased following the implementation of lockdowns, business demand fell significantly. Business demand has recovered somewhat with the easing of restrictions, but remains below pre-pandemic levels. FY20 electricity volumes were down 7% across retail and business reflecting a combination of milder weather, lower SME customers, and COVID-19 impacts in the final quarter. FY20 gas volumes were down 4% due to lower business volumes. 

Earlier this month, Origin announced post-tax charges which would reduce statutory profit after tax by $1,160–$1,240 million and underlying profit after tax by around $10 million would be recognised in FY20. The non-cash charges relate to revised commodity price assumptions, economic impacts of the pandemic, and the transition to a lower carbon energy supply. 

What is the outlook for Origin? 

CEO Frank Calabria recognised the joint venture highlights in FY20, citing its record production, high plant reliability, and reduction in capital and operating costs.

“Origin received record cash distributions from Australia Pacific LNG, demonstrating the value of this world-class asset to our business,” he commented.

The company has been focused on supporting customers facing financial difficulties, as well as minimising the impacts of the pandemic on the business. Origin reported that it has extended its commitment not to disconnect those in financial distress and to waive late payment fees until 31 October.

At the time of writing, the Origin share price is down 35.85%, year to date, and down 31% on this time last year. 

More reading

• Why AMP, FlexiGroup, Marley Spoon, & Origin shares are tumbling lower
• These shares were the ASX 200’s biggest losers last week
• 3 things that will impact on ASX shares this reporting season
• BlueScope’s earnings to halve as it takes $200m write-down
• Origin Energy share price flat on non-cash charge of $1.2 billion

Motley Fool contributor Kate O’Brien 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.

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In early afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to end the week in a disappointing fashion. At the time of writing the benchmark index is down 1.7% to 5,949 points.

Four shares that have not let that hold them back today are listed below. Here’s why they are pushing higher:

The Afterpay Ltd (ASX: APT) share price is up 1.5% to $69.88. Investors have been buying Afterpay and other tech shares today after their U.S. counterparts pushed higher overnight. Although the Dow Jones and S&P 500 indices tumbled lower, the tech-heavy Nasdaq index recorded a solid gain.

The Bapcor Ltd (ASX: BAP) share price is up 2.5% to $6.29. This appears to have been driven by the release of a positive update by Supercheap Auto owner, Super Retail. That update revealed that the Supercheap Auto business recorded a 6.3% increase in like-for-like sales and a 7.6% jump in total sales in FY 2020. This bodes well for Bapcor given their similar target markets.

The NRW Holdings Limited (ASX: NWH) share price is up almost 6% to $1.80. This morning the contract services provider revealed that the Southwest Connex Alliance has been named as the preferred proponent for the Bunbury Outer Ring Road project. NRW is a 40% partner in the Southwest Connex Alliance. The project is fully funded for $852 million and is expected to have a duration of three and a half years.

The Super Retail Group Ltd (ASX: SUL) share price is up 9% to $8.85. Investors have been buying the retailer’s shares after the release of a stronger than expected full year update. Super Retail revealed that its sales bounced back very strongly in May and June. This led to total sales growth of 4.2% in FY 2020. The company also expects to deliver growth in its pro forma EBITDA. This is expected in the range of $327 million and $328 million, up from $315 million in FY 2019. This excludes one-offs such as employee underpayment remediation costs.

More reading

• ASX 200 sinks 1.5%: AMP disappoints, big four tumble, Super Retail surprises
• Want to start investing? Here’s how
• Is the Fortescue share price too expensive?
• Super Retail share price rockets after surprisingly strong FY 2020 performance
• Why Afterpay, Fortescue, Marley Spoon, & Splitit shares are racing higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor and Super Retail Group Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Robo-investing (sometimes also called robo-advice) is a term you may have come across over the past year or 2. It’s a rather poor choice of name in my view, but it has stuck nonetheless, and so here we are.

Its proponents will tell you that robo-investing is a cheap, easy and effortless way of investing that can tailor a portfolio for your needs. Its detractors might call it fee-laden snake oil, and question whether it’s appropriate for its target market (individuals who want passive, hands-off investing).

So who’s right? Well, that’s what we’ll try and answer today.

What is robo-investing?

Robo-investing refers to an investment service that builds a custom-made portfolio of passive investments – usually exchange-traded funds (ETFs) – depending on a client’s age and risk profile. It has attracted the ‘robo’ name because of its hands-off approach. A platform offering robo-investing is typically digital and automated. It will not usually involve you speaking to a financial advisor or even a human.

So using ETFs, the platform will construct a portfolio for you.

If you’re a younger investor, a typical robo-portfolio will include a high allocation to ‘growth assets’. This is usually a mixture of ASX shares, international shares and perhaps property.

In contrast, if an older investor with a ‘less-risk’ profile came along, a robo-platform would instead construct a more ‘balanced’ portfolio, mixing shares with defensive assets like bonds, cash and perhaps gold.

In both cases, the robo-investor will do all of the work for you, reinvest dividends and perhaps rebalance the portfolio from time to time – all while you carry on living your life and not worrying about how your investments might be tracking. Some even offer ‘automated’ investment plans that might, for example, direct-debit you $20 a week to put towards your portfolio.

Sounds good, right?

Are robo-platforms a good idea?

I don’t have a problem with the concept of robo-investing, per se. I think it can be an easy and relatively fun way of investing your money, particularly if you aren’t partial to dabbling in the markets yourself. And I also think there’s a lot of merit for a ‘set-and-forget’ approach to investing that using a robo-advisor can foster.

However, not all robo-investing platforms are equal. Some might charge you usurious fees. A 1% or even 0.5% fee might sound cheap, but it adds up to a lot over time and can prove rather expensive seeing as you can always just invest in individual ETFs yourself.

Foolish takeaway

If the concept of robo-investing appeals to you, then, by all means, go for broke and run with it. But make sure you shop around for the best platforms that offer a reasonable price. There are many out there that simply charge too much for my liking.

More reading

• 3 coronavirus ASX shares to buy as consumer preferences change
• Buy these fantastic ASX tech shares for potential market beating returns
• Origin share price falls along with demand for gas and electricity
• Why Afterpay, Bapcor, NRW, & Super Retail shares are climbing higher today
• The rocketing Aussie is shaping up as a new threat to the profit season

Motley Fool contributor Sebastian Bowen 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 What is robo-investing, and should you do it? appeared first on Motley Fool Australia.

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The skyrocketing Australian dollar is catching experts off-guard and could soon prove to be a new risk to the ASX reporting season.

The Aussie battler charged above US72 cents for the first time since early 2019 and is likely to push even higher.

Why ASX investors should care is because many S&P/ASX 200 Index (Index:^AXJO) stocks have US dollar exposure. A stronger Aussie means lower earnings when profits are converted into the local currency.

Strong Aussie crimps earnings and dividends

Dividends could also very well be impacted by this. For instance, mining giants like BHP Group Ltd (ASX: BHP) declare their payouts in US dollars.

The good news is that the impact of the exchange rate won’t be material on FY20 results given that the year’s just past, but the raging Aussie could be a talking point in the outlook statements.

This is particularly so as currency strategists see further upside for our currency, according to the Australian Financial Review.

What’s driving the Australian dollar

To be sure, it isn’t strength in the Aussie that’s driving the gains. It’s weakness in the US dollar as its safe haven status comes under threat.

The rampant COVID-19 pandemic that’s still ripping through the US and forcing some states to consider second lockdowns are one factor.

This is making the US Federal Reserve chair Jerome Powell nervous, and if the Fed is worried, investors should be too.

The Fed is trying to keep the US economy afloat by continuing to pull on its quantitative easing (QE) levers. This keeps its financial system well lubricated with cash, but it hurts the value of the US dollar.

Throw in uncertainties caused by the upcoming presidential election and the worst quarterly GDP reading for the US economy ever, and you can see why sentiment is this poor.

A$ heading higher

Currency forecasters are scrambling to revise their estimates for the Aussie given that the headwinds against the US dollar isn’t abating.

The AFR reported that most experts weren’t expecting the Aussie to trade at US70 cents until the end of 2020.

Westpac Banking Corp (ASX: WBC) is one of the more aggressive forecasters. It was initially predicting the Aussie to hit US72 cents by end of this calendar year but has lifted its forecast to US74 cents.

ASX winners and losers

I suspect currency experts will be expecting the US dollar will continue to weaken into 2021, and that will crimp on earnings for a wide range of ASX stocks.

Some ASX shares with material exposure to the greenback include the Boral Limited (ASX: BLD) share price, Brambles Limited (ASX: BXB) share price and Reliance Worldwide Corporation Ltd (ASX: RWC) share price – just to name a few.

On the flipside, the stronger Aussie will benefit importers, such as retailers. Possible winners are the Nick Scali Limited (ASX: NCK) share price and Reject Shop Ltd (ASX: TRS) share price.

More reading

• ASX 200 sinks 1.5%: AMP disappoints, big four tumble, Super Retail surprises
• What’s dragging the CBA, Westpac and AMP share prices lower today?
• Here are the dividends this broker thinks CBA and the big four will pay in 2020
• Fortescue’s share price in focus as it beats guidance on record quarterly shipments
• 2 top ASX dividend shares to buy for income in 2020

Brendon Lau owns shares of BHP Billiton Limited and Westpac Banking. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Reliance Worldwide Limited. The Motley Fool Australia has recommended Reliance Worldwide 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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At lunch on Friday the S&P/ASX 200 Index (ASX: XJO) is on course to end the week with a sizeable decline. The benchmark index is currently down 1.5% to 5,952 points.

Here’s what has been happening on the market today:

AMP update disappoints.

The AMP Limited (ASX: AMP) share price has crashed lower after releasing an update on its expectations for the first half of FY 2020. The financial services company revealed that it expects to report an underlying profit for retained businesses in the order of $140 million to $150 million. This appears to have fallen well short of expectations and was due to a range of negative factors. These include market volatility and a credit loss provision in AMP Bank.

Big four banks tumble on class action news.

The big four banks are all tumbling lower on Friday and acting as a major drag on the ASX 200. The worst performers in the group today are the Commonwealth Bank of Australia (ASX: CBA) share price and the Westpac Banking Corp (ASX: WBC) share price with declines of approximately 2.2%. This appears to be due to news that the banks are to be hit with a new class action. AMP is also being hit with the same class action.

Super Retail surprises.

The Super Retail Group Ltd (ASX: SUL) share price has been a very positive performer on Friday after the release of a surprisingly strong FY 2020 update. After experiencing a 26.2% decline in monthly like-for-like sales in April, they rebounded 26.5% in May and 27.7% in June. This led to Super Retail recording total sales growth of 4.2% in FY 2020. In addition to this, the retailer advised that it expects its pro forma EBITDA to be between $327 million and $328 million. This will be up from $315 million a year earlier.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Friday has been the Super Retail share price by some distance. Its shares have jumped 11% higher following its aforementioned update. The worst performer has been the AMP share price. It is down over 11% after its guidance for the first half of FY 2020 fell well short of expectations.

More reading

• Why Afterpay, Bapcor, NRW, & Super Retail shares are climbing higher today
• The rocketing Aussie is shaping up as a new threat to the profit season
• What’s dragging the CBA, Westpac and AMP share prices lower today?
• Why AMP, FlexiGroup, Marley Spoon, & Origin shares are tumbling lower
• Telstra and 2 more ASX shares I’d like to buy with $5,000

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Super Retail Group 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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The share prices of 3 stalwarts of the S&P/ASX 200 Index (ASX: XJO) have collectively fallen this morning in early trade.

At the time of writing, the Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) share prices have retreated by close to 2% to $71.88 and $17.32, respectively. The AMP Limited (ASX: AMP) share price has been the hardest hit of the 3 financial institutions, falling by as much as 12% to lows of $1.475.

What’s dragging these ASX blue-chips lower?

Class action woes

This morning, the ABC revealed that hundreds of thousands of Australians who were forced to pay ‘excessive insurance premiums’ may have a basis for pursuing compensation claims against the financial companies, as part of 3 separate class actions.

Although court claims against Commonwealth Bank and Westpac’s superannuation arm, BT Group, are expected to be commenced early next week, AMP has already been informed of claims filed against it this week in the Federal Court.

The practice leader for Shine Lawyers, the firm leading the litigation against Commonwealth Bank, AMP and Westpac, said the companies’ “business models were set up to promote their own products and their own interests ahead of those of their own clients and their members.”

The court actions mainly relate to life insurance and income protection policies offered by the 3 institutions.

It is anticipated that the 3 court actions are expected to be some of the largest since the Banking Royal Commission, and that is going to hurt all 3 companies if they are found to be liable for the alleged breaches.

The expected payout if wrongdoing is proven could be in the tens of millions, and that’s a significant headwind sending the share prices of all 3 lower.

AMP has also been hit hard due to its announcement to the market this morning pertaining to profit guidance for the first half of FY20. As reported by my Foolish colleague here, the struggling financial institution expects underlying profit to be in the range of $140–$150 million. Judging by the dramatic fall in the AMP share price this morning, the market believes this result is an underperformance.

Is this a buying opportunity?

Some would argue that this morning’s news provides investors with the ability to buy discounted shares in CommBank, Westpac and AMP.

Commonwealth Bank will announce its full-year results and provide an update on its dividend on 12 August, so many investors may take today’s opportunity to buy in and take advantage of its excellent dividend record moving forward. Westpac and CommBank (and until relatively recently, AMP) shares have historically paid out sizeable yields on a fully-franked basis to their shareholders, making these financial institutions a reliable income source for many Australian investors.

On the other hand, this litigation may lead to further negative price movements for these 3 ASX shares in the coming days and weeks, as others may sell out and take profits from the recent resurgence of financial stocks.

The three companies are such large institutions that their share prices will eventually make a comeback, so in my opinion the majority of shareholders will likely take today’s news as a short-term headwind.

More reading

• The rocketing Aussie is shaping up as a new threat to the profit season
• ASX 200 sinks 1.5%: AMP disappoints, big four tumble, Super Retail surprises
• Why AMP, FlexiGroup, Marley Spoon, & Origin shares are tumbling lower
• Telstra and 2 more ASX shares I’d like to buy with $5,000
• A top ‘coronavirus share’ to buy this August

Motley Fool contributor Toby Thomas owns shares of Commonwealth Bank of Australia. 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 What’s dragging the CBA, Westpac and AMP share prices lower today? appeared first on Motley Fool Australia.

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There is no better time to start investing in ASX shares than right now. The sooner you start, the more time you’ll have to consolidate gains and grow your investments. You don’t need huge amounts of money to start investing in the ASX or even international share markets. What you do need is the motivation and determination to get started. So how do you do that?

Start small, think big 

Small amounts can add up to a big investment over time. Consistency is key here. Some trading platforms will let you invest with as little as a few dollars at a time. Over time what seemed like inconsequential amounts can add up to something very substantial indeed. 

Calculate how much of your income you want to put towards investments. Then put that money aside, whether on a weekly, fortnightly, or monthly basis. If it helps, you can open a separate account for investment funds. This can remove some of the temptation to access and spend the money. Add to your investment fund incrementally, but regularly. 

Open a share trading account

There are many different online brokerage options available. Investigate these now, before you are ready to actually place a trade. Check the fees involved, the range of securities that can be traded, and any value-added services available. 

Like everything else in life, there is a cost to investing. Trading ASX shares incurs brokerage charges. Ensure you understand the fees and charges levied by your chosen broker. These will impact on your returns. If you trade frequently, you can expect to incur more brokerage fees. If brokerage fees are fixed and you buy smaller portions of shares, your brokerage fees will be proportionately higher. 

Figure out your goals

There are a vast array of investment options available both in Australia and abroad. Before you figure out which investment option(s) you want to pick, it pays to understand what you’re investing for. What are you trying to achieve? You could be looking to get an early start on a retirement nest egg, build a second income stream, or diversify your assets. 

Your investment choices should be informed by your goals and risk tolerance. If you have longer-term goals, you can afford to take on a relatively larger amount of risk – there is a longer time period over which to ride out volatility in returns. Those with lower risk tolerances should opt for investments where returns are more certain. Oftentimes, however, this means returns are also lower. For example, bonds have historically provided lower returns than equity. 

Potential investments should be assessed through a matrix of your goals and risk tolerance. Highly risky investments such as derivatives will not be suitable for many, but blue-chip ASX shares will be appropriate for a lot of investors. Those with longer-term horizons may be more willing to gamble on growth shares for capital gains while those looking for an income stream will instead seek dividend shares. 

Do your research

Take your time to assess the investment landscape. There are more than 2000 shares listed on the ASX. And the ASX itself is only a small proportion of the global investable universe. Narrow down the type of securities you are interested in. This could be bonds, domestic shares, international shares, or something else. It is advisable to diversify across asset classes, although the precise mix of assets will depend on the individual. 

Once you’ve figured out the asset classes you’re interested in, you can look at individual investments. To diversify within an investment class, you could consider exchange-traded funds (ETFs). ETFs are traded like shares and offer exposure to a basket of underlying securities. ETFs are available which provide exposure to ASX shares, international shares, fixed-interest securities, and more.

To invest directly in ASX shares, you will need to assess the companies listed on the ASX and decide which you think will perform well. Your investigations will be informed by your goals and risk profile. If an income stream is a priority, you may look to mature, profitable companies in stable industries like Coles Group Ltd (ASX: COL) and AGL Energy Limited (ASX: AGL). If potential capital growth is more important, you could look for younger, more disruptive companies with high growth prospects, like Afterpay Ltd (ASX: APT) or Megaport Ltd (ASX: MP1).  

Make an investment 

Once you’ve figured out your preferred investments, it’s time to execute on your plan. Presuming you’ve opened an online brokerage, you can put in a trading order. Orders can either be at the price you nominate or at the market price. If the price you nominate is lower than the market price, your trade will only be executed if the share price falls. 

Once your trade has cleared, you will officially be an investor. Congratulations! You might think that you can sit back and take it easy from here, but that is not really the case. It’s important to keep an eye on your investments. Plus you’ll want to keep watching and researching future investment opportunities. 

Remember the value of time

Don’t expect magic overnight. It took years for Warren Buffett to become Warren Buffett. Time is one of our most undervalued assets. Time allows returns to compound, which means, over time, they become greater and greater. Time also allows investors to ride out periods when the market is experiencing a downturn or providing flat returns. Time also allows you to learn and grow from your mistakes.

If you are considering investing in ASX shares, a timeline of five or more years is recommended. This allows a decent period to ride out volatility in share prices. You should keep an eye on your investments while you hold them, but don’t obsess over them. Checking the price of your ASX shares daily multiple times a day will not make a difference to your long-term returns. 

Foolish takeaway

The sooner the better is the motto when it comes to long-term investing. The sooner you start, the sooner your portfolio can start growing. Follow the steps above to get started investing and take control of your financial future. 

More reading

• Why Afterpay, Bapcor, NRW, & Super Retail shares are climbing higher today
• Is the Fortescue share price too expensive?
• Why Fortescue and these ASX 200 shares are at record highs
• Coles and Wesfarmers share prices reach for new highs. Should you invest?
• 3 top ASX shares to buy for growth investors in August

Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends MEGAPORT FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO and COLESGROUP DEF SET. The Motley Fool Australia has recommended MEGAPORT FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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