Author: therawinformant

At the weekend I wrote about how successful $20,000 investments in a number of popular ASX shares had been over the last 10 years. You can read about those investments here.

But that was then, what about the next decade?

Listed below are three ASX shares that I believe could provide market-beating returns for investors throughout the 2020s. Here’s why I would invest $20,000 into them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

I think investors ought to consider putting $20,000 into the BetaShares Asia Technology Tigers ETF. This exchange trade fund gives investors exposure to some of the most exciting technology companies in the Asian market. These include search engine company Baidu, ecommerce stars Alibaba and JD.com, electronics giant Samsung, and WeChat owner Tencent Holdings. These companies are revolutionising the lives of billions of people in the region and look particularly well-placed for growth in the future. In light of this, I believe there’s a strong probability the BetaShares Asia Technology Tigers ETF will outperform the ASX 200 by a decent margin throughout the 2020s.

Cochlear Limited (ASX: COH)

I think Cochlear shares would also be a great place to invest $20,000. It is a global developer, manufacturer, and distributor of cochlear implantable devices for the hearing impaired. I think Cochlear would be a great long term option due to the ageing populations tailwind. This is because as people age, their hearing will more often than not fade and require some form of assistance. So, with the World Health Organization estimating that there will be almost three times more people over the age of 65 by 2050 than there were in 2010, demand for Cochlear’s industry-leading cochlear implantable devices looks likely to grow strongly over the next few decades.

SEEK Limited (ASX: SEK)

A final ASX share to consider investing $20,000 into is this job listings company. I believe the SEEK share price could generate very strong returns for investors over the 2020s. This is thanks to the strength of its core ANZ business, its investment in growth opportunities, and its fast-growing Chinese operations. Combined, I expect them to drive strong earnings growth over the period. And while FY 2020 will be a disappointing year because of the pandemic, I believe it is worth dealing with the short term pain for the potential long term gains.

More reading

• Cochlear and these ASX 200 shares could be fantastic buy and hold investments
• ASX 200 closes 0.4% higher, Cochlear share price up 6%
• Fund managers have been buying these ASX 200 shares
• ASX 200 up 0.55%: Cochlear jumps on FDA approval, Adbri crushed on contract loss
• Cochlear share price charges higher on US FDA update

James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended Cochlear Ltd. and SEEK 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.

The post Where to invest $20,000 into ASX shares for market-beating returns appeared first on Motley Fool Australia.

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From time to time, I like to draw from the wisdom of the great Warren Buffett in order to start my week off right. Warren Buffett — chair and CEO of Berkshire Hathaway Inc. (NYSE: BRK.A)(NYSE: BRK.B) — is often regarded as one of, if not the, best investors of all time. Even though he turns 90 years old this year, Buffett is still a font of wisdom and good investing practice. And we are lucky enough that he is more than happy to pass on his knowledge to all aspiring investors who want to learn from him.

Luckily, our Fool colleagues over in the United States have compiled a comprehensive list of Buffett’s best quotes. So here are 3 that I think are relevant as we start a new week.

“The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.”

I love this quote as it perfectly encapsulates one of the greatest follies growth investors often make. People often mistake a company’s ‘first mover’ status in a new growth area as permanent dominance. If this were so, then it would be Nokia and Blackberry that would control the smartphone market today, rather than Apple, Alphabet and Samsung. So don’t mistake a company’s initial innovation for a sign of permanent success.

Of course, sometimes the first mover manages to retain their edge — just look at how Afterpay Ltd (ASX: APT) shares have performed in recent weeks. But equally common is a company that sparks a trend being unable to follow this through. For every Afterpay, there are 3 Kodaks and BlackBerrys. As such, I think all growth investors should pay attention to this one.

“Buy a stock the way you would buy a house. Understand and like it such that you’d be content to own it in the absence of any market.”

This is a doozy. Buffett here perfectly nails why buying a share because ‘you hope it goes up’ isn’t the right way to go about things. We have seen growing signs in this market today that many investors (especially newer share market converts) are playing a ‘chase the winner’ strategy.

Shares like Afterpay, Zip Co Ltd (ASX: Z1P) and Openpay Group Ltd (ASX: OPY) have delivered triple-digit gains to investors over just the past 3 or so months. This (in my view) has the same mental effect of winning a high-stakes game of roulette for newer investors – after one win, you just want more. These investors may be better of just following Buffett’s advice here and buy for the long-term.

“The best chance to deploy capital is when things are going down.”

This one may sound obvious, but too many investors don’t follow it at all. Too often, a market panic or crash (like we saw in March) scares investors into pulling out their shares from the market when it’s too late — cementing ugly losses of capital.

The best time to sell shares is usually just before a crash when the market tends to get a little carried away. Making sure you have a small-but-potent cash pile ready to go if things turn south is a prudent way to have a ‘foot in both camps’ in my view.

More reading

• Has Warren Buffett lost his magic?
• 3 Warren Buffett quotes to start your week off right
• How to be like Warren Buffett and not lose money investing in ASX 200 shares

Sebastian Bowen 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 Berkshire Hathaway (B shares) and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short September 2020 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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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Whether or not the Reserve Bank will cut rates to zero on Tuesday is difficult to say. But one thing I feel is almost certain, is that interest rates will not be going higher for some time to come.

In light of this, I think ASX dividend shares will continue to be the best place to invest your money for income.

With that in mind, here are two ASX dividend shares that I would buy today:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

The ANZ share price has been out of form in 2020 and is currently trading over 33% lower than its 52-week high. While a decline is not completely unwarranted, I feel the extent of its decline has been overdone. This has left ANZ’s shares trading at around 13x estimated FY 2021 earnings and 0.9x FY 2021 book value. Which I feel is a very attractive level to buy in at.

This is especially the case for income investors, given my expectation that the bank will pay a partially franked dividend of $1.05 per share in FY 2021. If this forecast proves accurate, it will mean that ANZ’s shares provide investors with a very generous 5.5% yield next year.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

If you don’t have enough funds to invest across an adequately diverse group of shares, then the Vanguard Australian Shares High Yield ETF could be worth considering. This is because this exchange traded fund gives investors exposure to a group of high yielding ASX dividend shares through a single investment.

These includes the likes of ANZ and the rest of the big four banks, Telstra Corporation Ltd (ASX: TLS), and mining giants such as BHP Group Ltd (ASX: BHP). At present I estimate that its units provide a FY 2021 dividend yield in the region of 4.3%.

More reading

• ASX 200 Weekly Wrap: Afterpay, Tech push ASX 200 back above 6,000
• Is the ANZ, APA or CSL share price a strong buy?
• Looking to start a share portfolio? Here are 3 quality ASX shares to begin with
• ASX bank shares have experienced a horrible financial year
• 2 biggest areas of risk for ASX bank stocks that are being overlooked

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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 SelfWealth Ltd (ASX: SWF) share price hit a new all-time high of $0.60 today after the company released its quarterly report for the period ending June 2020. The SelfWealth share price is currently up by 13.46% to sit at $0.59 per share.

What were the highlights from SelfWealth’s quarterly report?

SelfWealth has seen 6 consecutive months of record trade volumes, after recording a 112% increase in quarter on quarter trading volume of 340,000 for the June period. In addition, the budget broker saw a 44% quarter on quarter increase in ‘active traders’ over the last 3 months, with 46,445 customers using the platform.

The June quarter also saw SelfWealth report its first ever positive cash flow of $809,000. In addition, the broker also reported a 101% increase in quarter on quarter revenue of $4.18 million for the June period. The influx of new clients and share market rally has seen the total securities held on SelfWealth’s holder identification number (HIN) rise to $2.52 billion at the end of June.  

The company’s management attributed the growth to large numbers of investors entering the share market as a result of the coronavirus pandemic changing investor behaviour. SelfWealth cited ultra low interest rates and the digitisation of investments markets as key factors in drawing in new users.

The company also provided an update on its US equity trading platform, which is expected to launch later in the year.

What does SelfWealth do?

SelfWealth is a budget platform that offers retail investors a flat fee of $9.95 for every trade on the ASX. In addition, the company also offers auxiliary services such as a community sharemarket forum and a premium forum for $20 per month.

In early March, the company completed a $3 million capital raise, with funds being used to build and maintain growth in the business, develop its platform technology and new product initiatives. By offering low-cost brokerage fees and adapting to the digitisation of investment markets, SelfWealth aims to attract new investors, particularly those from the younger demographics.

Foolish takeaway

The SelfWealth share price has more than tripled for the year. At the time of writing, the company’s share price is trading 13% higher after hitting a new all-time high earlier of $0.60 per share.

More reading

• Have $10,000 to invest? I’d pick these ASX shares
• Are Afterpay shares the next Visa?
• Kogan and 1 other ASX share to buy and hold beyond 2025
• ASX 200 falls 0.7%, Qantas and Afterpay make a partnership
• 2 ASX shares I would buy for growth and income

Motley Fool contributor Nikhil Gangaram 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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US stocks are outperforming ASX shares in the COVID-19 rebound and Australian investors are hopping onboard this trend.

While the S&P/ASX 200 Index (Index:^AXJO) performed remarkably well during the coronavirus meltdown, US equities have raced ahead, particularly the tech-laden Nasdaq Composite (INDEXNASDAQ: .IXIC).

Aussies are joining in the party as US tech stocks are among the favourite their picks in the month of June, according to investment platform eToro.

Racing to the top

Electric car icon Tesla Inc (NASDAQ: TSLA) tops the list of US stocks being snapped up by Aussie investors last month – at least that’s the case for eToro’s clients.

The stock recently reached a record high despite its founder Elon Mask’s attempt to talk it down by questioning its lofty valuation.

“Tesla’s share price was up more than 22 per cent in June as it went on to breach $1,000, smashing its record high,” said eTora analyst Josh Gilbert.

“The electric vehicle giant is the world’s most valuable carmaker and can put its recent success down to improved sales in China.

“A recent email leaked from Tesla CEO Elon Musk saw the share price surge more than 8 per cent in June, as Musk showed optimism the company could break even in the second quarter.”

Other popular stocks include some of the FANG stocks such as Facebook, Inc. Common Stock (NASDAQ: FB), which is ranked number five, and Amazon.com, Inc. (NASDAQ: AMZN), ranked seventh.

Taking big risks

However, there are a few interesting US stocks among the top 10 list. One that stands out for me is car rental company Hertz Global Holdings Inc (NYSE: HTZ), which is trading under bankruptcy protection.

The pandemic forced the overindebted group to its knees and the outlook isn’t so good as international travel looks to be off the agenda for a while yet.

But investors have been happy to buy the stock despite the very real risk that they will lose everything. The flood of liquidity from central banks may be one reason why retail investors are clambering to climb the risk curve with greater gusto than professionals.

Other interesting stocks on the list include aircraft maker Boeing Co (NYSE: BA) and carrier American Airlines Group Inc (NASDAQ: AAL). Perhaps Aussie investors are looking for an alternative to Qantas Airways Limited (ASX: QAN).

Foolish takeaway

Investing in blue-chip US stocks is one way to gain diversification in your portfolio as long as you know what you are doing and can spend the time doing your homework.

But there are real concerns about overstretched valuations for some of the more popular US names. While sometimes it can pay to run with the crowd, those that are happy to follow the herd will need to be nimble.

If the tide turns, and that’s a question of “when” not “if”, stocks that have climbed the highest have the farthest to fall.

Those looking for stocks with solid fundamentals even during these trying times might want to read this free report from the experts at the Motley Fool.

Click on the free link below to find out more.

More reading

• Is the Ramsay Health Care share price a buy?
• Why the Mesoblast share price is leading the ASX 200 on Monday
• Afterpay share price pushes higher on Qantas partnership
• Cochlear and these ASX 200 shares could be fantastic buy and hold investments
• The latest ASX 200 stocks crashing on broker downgrades

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors.

Brendon Lau 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 Amazon, Facebook, and Tesla and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Amazon and Facebook. 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 JB Hi-Fi Limited (ASX: JBH) share price has been amongst the ASX 200 retail shares rocketing higher in 2020.

While fears over the coronavirus pandemic sparked the February/March bear market, strong government stimulus measures, together with a surge in online shopping, have sparked the recovery for many retail shares.

In fact, the JB Hi-Fi share price has rocketed 14.3% higher this year and is sitting just shy of its all-time high.

While that seems logical given strong sales in early 2020, let’s rewind the clock. If you had told me in February that ASX retail shares were going to outperform in 2020, there’s no way I would have believed you.

Afterall, this was when we were seeing more voluntary administrations in the sector including big names like Jeanswest. So, is the recent ASX retail rally a flash in the pan or is it time to invest?

Why ASX 200 retail shares are surging

JB Hi-Fi is definitely something of a special case. The nature of COVID-19 restrictions has meant more Aussies have been forced to work from home. This triggered a spending spree on home electronics and accessories, therefore boosting sales.

However, JB Hi-Fi isn’t the only ASX retail share that’s been climbing recently. Although being down for the year, the Super Retail Group Ltd (ASX: SUL) share price has rocketed nearly 140% since 19 March.

That’s despite the group’s brands, which include Supercheap Auto, Macpac, BCF and Rebel Sport, having no obvious relationship with the work from home trend.

I think one big contributing factor here has been the government stimulus measures. Many Aussies have been receiving JobKeeper or JobSeeker and piling that cash into the economy. This has been good news for some retailers which have seen sales grow accordingly.

Will the strong share price growth continue?

The big question right now is what happens in September? That’s when many of the big stimulus measures are set to drop away and expose the economy to reality.

I believe there could be a lot of companies having been propped up over the last few months that may seriously struggle once the government stimulus dries up. 

It’s hard to see where potential share price growth will come from for the rest of the year. If we do see a ‘V-shaped’ recovery, then that could be the spark ASX retail shares need to climb higher.

However, according to an article by a leading fundie published in yesterday’s AFR, even ASX supermarket shares like Coles Group Ltd (ASX: COL) are set to struggle. The reason given was that it is likely the double digit growth recently experienced by many retailers has ‘pulled forward’ future growth. If this really is the case, it suggests the strong sales performances we have witnessed among some retailers in the COVID-19 environment are unsustainable longer term.

Foolish takeaway

There’s no doubt some ASX 200 retail shares have delivered for investors in 2020.  However, I think there are signs that the short-term gains may not be sustainable as a long-term trend.

I’m personally not looking to buy in at current prices with the looming uncertainty surrounding September/October this year. While supermarket shares and even some other areas of retail could offer defensive earnings, I’m not sure there’s great value in buying at current prices.

More reading

• ASX 200 Weekly Wrap: Afterpay, Tech push ASX 200 back above 6,000
• These are 10 most shorted shares on the ASX
• 5 ASX shares rated as strong buys by brokers
• 3 top ASX dividend shares I would buy next week
• 2 ASX dividend shares with yields over 6%

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 Are ASX 200 retail shares like JB Hi-Fi overvalued? appeared first on Motley Fool Australia.

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The Woodside Petroleum Limited (ASX: WPL) share price has plunged 37% lower in 2020, but how does it stack up against its peers?

What do I need to know about Woodside?

Woodside is the largest Australian natural gas producer and a leader in the ASX energy sector. It hasn’t been the best year for oil and gas investors, with the Woodside share price plummeting to to $21.61 per share from highs of around $35 in January.

The coronavirus pandemic has hit ASX shares hard, however, the ongoing oil price war has arguably had a larger impact on ASX energy shares. While tensions between OPEC+ and Russia appear to be easing, the Woodside share price doesn’t look like it is bouncing back anytime soon.

The brinkmanship shown from leading world oil producers has created a supply glut and even briefly sent oil prices negative. These depressed prices don’t bode well for Woodside’s profitability or share price growth in FY 2020.

According to the ASX, Woodside has 954.36 million shares on issue, which currently gives the company a market capitalisation of $20.6 billion. While impressive, that’s a long way shy of its 2 January valuation of $32.9 billion.

The Woodside share price currently trades at a price to earnings (P/E) ratio of 40.76 with a dividend yield of 6.32%. It’s not easy to say whether an ASX share is good value in isolation, so let’s take a look at some other ASX energy shares right now.

How do Woodside compare to its competitors?

	Woodside Petroleum Limited (ASX: WPL)	Santos Limited (ASX: STO)	Oil Search Limited (ASX: OSH)
2020 share price change	-37.91%	-37.28%	-56.23%
Market capitalisation	$20.6 billion	$10.9 billion	$6.6 billion
P/E ratio	40.7	11.3	11.1
Dividend yield	6.3%	3.1%	4.3%

Table: Author’s own. Source: Google Finance, ASX.com.au

Is the Woodside share price good value?

The table above paints a pretty dire picture of the ASX energy sector right now. Despite tough times, Woodside has almost double the market capitalisation of Santos and more than triple that of Oil Search.

While the Woodside share price is yielding 6.3% right now, I wouldn’t bank on that dividend given the tough conditions facing the sector right now.

The company’s shares are also trading at a P/E ratio nearly 4 times higher than its peers. That to me says that the Woodside share price is a touch overvalued, or at the very least, not a cheap buy at its current valuation.

More reading

• ASX 200 Weekly Wrap: Afterpay, Tech push ASX 200 back above 6,000
• 5 things to watch on the ASX 200 on Monday
• Here’s how to play China’s V-shaped growth story
• 5 things to watch on the ASX 200 on Friday
• Is the Oil Search share price worth buying?

Motley Fool contributor Ken Hall 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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