Author: therawinformant

Investing $1,000 every other month may not seem like it has the potential to change your life, but you’d be wrong.

The Australian share market has provided investors with an average total return of 9.2% per annum over the last 30 years.

This means that if you had invested $1,000 every other month and earned the market return, you would have grown your wealth to just under $930,000 today.

This is good for two reasons. Imagine you started investing these funds when you were 20. Now you would be 50 years old and have a share portfolio worth almost one million dollars.

If you were to now rotate your portfolio into high yield income shares that collectively offer a yield of 5%, you would generate $46,500 of income each year from these investments. That could arguably be enough for some people to quit the day job and start living a life of leisure if they have paid off their mortgage already.

Overall, I believe this demonstrates why investing on a regular basis and with a long term view can be a very rewarding endeavour and something you’ll be very thankful for in the future.

With that in mind, here are three shares that I think would be great options for a $1,000 investment today:

a2 Milk Company Ltd (ASX: A2M)

I think a2 Milk Company could be a great option for that first $1,000 investment. Although the company has been growing at a very strong rate over the last few years, I’m confident it still has a long runway for growth. Especially given the increasing demand for its infant formula products. In addition to this, I believe a2 Milk Company could accelerate its growth with new product launches and acquisitions in the near future.

Altium Limited (ASX: ALU)

This award-winning printed circuit board (PCB) design software provider could be another ASX share to buy. It has also been growing at a rapid rate over the last few years. This has been driven by the proliferation of electronic devices globally which has led to increasing demand for its software. Pleasingly, with the Internet of Things boom still accelerating, I think the future looks very bright for Altium.

IDP Education Ltd (ASX: IEL)

A final option to consider investing $1,000 into is IDP Education. It is a leading provider of international student placement services and English language testing services. Although its near term growth will inevitably be impacted by the pandemic, I expect it to rebound strongly once the crisis passes. Outside this, I believe its long term outlook is very positive due to its sizeable opportunity, strong market position, and growing software business.

More reading

• Why these ASX shares could help you beat the market
• 3 ASX shares to buy and hold for the next decade
• Is the Altium share price the steal of the century?
• Leading brokers name 3 ASX 200 shares to buy right now
• Why Appen, Healius, IDP Education, & Propel shares are racing higher

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 Altium and Idp Education Pty Ltd. The Motley Fool Australia owns shares of A2 Milk. 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 How to become wealthy by investing $1,000 into ASX shares appeared first on Motley Fool Australia.

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It’s hard to know whether to buy or sell ASX 200 shares right now. The S&P/ASX 200 Index (ASX: XJO) has been volatile in recent days as investors worry about the recent bull run.

But despite the share market heating up, now is not the time to panic.

Here are a few things that I think are worth considering if you’re nervous about buying right now.

3 reasons to buy ASX 200 shares right now

The first thing to remember is why you’re investing in the first place. While it could be to make a quick buck, it’s most likely to build long-term wealth and enjoy a nice retirement.

That means that stepping out of the market while ASX 200 shares are volatile may not be the best strategy.

For instance, many investors missed out on huge winners like Afterpay Ltd (ASX: APT) because they cashed out of the market.

There are many Aussie companies that have shed billions in value this year. That could present some great buying opportunities right now.

The coronavirus pandemic hit global markets hard and ASX 200 shares like Woodside Petroleum Limited (ASX: WPL) have crashed lower in 2020.

That leads me to my second point: market timing.

In the long-run, it’s just not possible to time the market correctly. It’s easy to say that but not follow through, especially in a bear market. However, if you’re investing for the long-term, you should drown out the noise.

Consistently investing in ASX 200 shares is the best way to achieve long-term returns. That means you can invest for your time horizon in the decades ahead and not worry about current movements.

Transaction costs and taxes are two factors that can deplete your after-tax returns which investors often forget.

A final reason to invest in ASX 200 shares right now is that there aren’t many other good options available.

Interest rates are at record lows which means savings accounts and bonds don’t offer much yield.

Aussie property tends to be very expensive which means shares are really one of the few high-yield options available right now.

Foolish takeaway

These are just a few reasons to buy ASX 200 shares in the current market rather than not investing at all and holding cash.

More reading

• Is $1,000 invested in AGL Energy shares a smart investment?
• Will the Afterpay share price hit $100 in 2020?
• Why Afterpay and these ASX shares just stormed to new highs
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 jumps almost 4%, Webjet share price soars

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. 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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If you’re looking for a source of income from dividend shares, then I think Commonwealth Bank of Australia (ASX: CBA) is a great option to consider.

I believe it is the highest quality bank on the Australian share market and expect its shares to provide investors with a very generous yield in 2021 (even after factoring in a dividend cut).

However, given that a lot of investors already have meaningful exposure to the banks, it might not be suitable for everyone.

In light of this, I have picked out three ASX dividend shares which I think would be quality alternatives to the banks. They are as follows:

Aventus Group (ASX: AVN)

I think Aventus could be a good dividend option. It is a retail property company specialising in large format retail parks across Australia. Aventus’ rental income has a reasonably high weighting towards everyday needs, with homewares, electrical, furniture, bedding and hardware making up the balance. I think this is a good and robust mix and leaves it well-placed for growth over the coming years. In respect to its distribution, Goldman Sachs recently forecast a ~17.3 cents per unit distribution in FY 2021. This equates to a forward ~7.9% distribution yield.

Dicker Data Ltd (ASX: DDR)

Another dividend share to consider buying instead of the banks is Dicker Data. It is a leading distributor of information technology products. It has delivered consistently solid earnings and dividend growth over the last few years thanks to its strong market position, growing demand, and the addition of new vendors. The good news is that I remain confident that this growth can continue over the coming years. And based on the high levels of insider buying it continues to report, its management team does as well. This year Dicker Data intends to pay a 35.5 cents per share. This represents a fully franked ~5% yield.

Wesfarmers Ltd (ASX: WES)

Lastly, I think this conglomerate is a dividend share to buy. Wesfarmers is the company behind brands such as Bunnings, Kmart, Target, online retailer Catch, and Officeworks. In addition to its retail exposure, the company owns a number of businesses in the chemicals and industrials industries. It also has a hefty cash balance which I suspect could be used to make earnings accretive acquisitions in the near term. Combined, I believe Wesfarmers is well-placed to grow its earnings and dividends at a solid rate over the coming years. At present I estimate that its shares offer a forward fully franked ~3.5% dividend yield.

More reading

• 3 high yield ASX dividend shares for income investors
• ASX 200 jumps 3%: CBA rebounds, Afterpay hits a new record high
• Why I would buy Wesfarmers and these ASX dividend shares
• Can ASX big banks generate an attractive sustainable dividend yield from FY21?
• 2 of the best ASX dividend shares for retirees to buy today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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 Webjet Limited (ASX: WEB) share price was on fire on Tuesday and rocketed materially higher.

The online travel agent’s shares jumped over 11% to finish the day at $4.10.

Despite this strong gain, the Webjet share price is still down over 57% since the start of the year.

Does this make Webjet shares a bargain buy?

Unfortunately, at the current level I think Webjet is far from a bargain buy. In fact, I believe it shares are very expensive despite their significant decline.

As I mentioned here previously, at the start of the year when nobody had heard of COVID-19, Webjet’s market capitalisation stood at just under $1.3 billion.

A market capitalisation is essentially the value of the company. It represents the total number of shares on issue multiplied by the share price of the time. At that point Webjet had a total of ~135.6 million shares outstanding and a share price of $9.49.

How much do you think Webjet’s market capitalisation is today?

Given that its shares price is down 57% since the start of the year, you might expect that its market capitalisation would be down by the same amount to $559 million. But it isn’t.

Webjet actually has a market capitalisation of approximately $1.4 billion.

Yes, you read that correctly. Despite the tourism industry grinding to a halt during the pandemic and the next year or two looking incredibly uncertain, investors are giving Webjet a higher valuation.

How is this possible? This appears to have been caused by investors not taking into account Webjet’s highly dilutive capital raising.

This capital raising means there are now a total of ~339 million shares outstanding. Which, when multiplied by the current share price, equates to a market capitalisation ~$100 million higher than its pre-pandemic valuation.

Short interest building.

In light of this, I can’t say I’m surprised that short sellers have begun to target Webjet. Short sellers are investors that profit when a share price declines.

On Monday, Webjet had 9.2% of its shares held short, making it one of the 10 most shorted shares on the ASX.

In light of the above, although I am a big fan of Webjet and its brands, I think it is a very risky share to own at the current level.

More reading

• ASX 200 jumps almost 4%, Webjet share price soars
• ASX 200 falls 2%, ASX travel shares drop heavily
• These 5 ASX shares were last week’s best performers
• Is the Webjet share price ridiculously cheap?
• ASX winners and losers from last week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet 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 Afterpay Ltd (ASX: APT) share price has rocketed 93% higher since the start of the year to $56.52.

That would be impressive growth at the best of times, let alone after a steep bear market. Afterpay shares slumped as low as $8.01 before rocketing more than 600% higher in the last three months.

It’s been a wild ride for long-term Afterpay shareholders in recent years. In fact, the Afterpay share price was trading at just $2.95 in June 2017.

But could Afterpay repeat the trick and double again in 2020?

Why the Afterpay share price could surge higher

It’s fair to say investors panicked as coronavirus restrictions took hold in February. Shares in the buy now, pay later company plummeted lower before rocketing even higher than where they started.

Afterpay has a $15.1 billion market capitalisation right now. This means the Aussie payments company could leapfrog into the ASX 50 by the end of the year.

$100 per share seems like a long way from the current Afterpay share price of $56.52. However, Afterpay has proven time and again that it can deliver strong growth to shareholders.

The group’s retail merchant networks continue to grow and bad debts are staying low. Successful expansions into the United States and the United Kingdom have also been strong growth factors.

But there’s no such thing as a sure thing in ASX shares, particularly in this market. I’m expecting there to be more volatility on the way, especially as government stimulus measures are wound back.

If we see another strong earnings result, then the Afterpay share price could surge towards $100 per share. However, any slight wobble could send the company’s shares into another slump.

Foolish takeaway

The Afterpay share price has already delivered strong returns for long-term shareholders. But now it’s always a question of, ‘is it too late to buy?’.

I think there’s still strong growth potential for Afterpay despite increasing competition at home and abroad.

I wouldn’t say $56.52 per share is a cheap buy, but if earnings continue to grow then who knows how high it could go.

More reading

• Why Afterpay and these ASX shares just stormed to new highs
• ASX 200 jumps almost 4%, Webjet share price soars
• ASX tech shares are soaring – these are my top 3 today
• The Zip Co share price is up 500%. Too late to invest?
• Why Afterpay, Super Retail, Uniti, & Viva Energy are charging higher

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. 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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The All Ordinaries (ASX: XAO) returned to form on Tuesday and raced notably higher.

While the majority of shares on the index pushed higher, some climbed more than most.

Three ASX shares that climbed so strongly they reached new highs are listed below. Here’s why they are flying high right now:

Afterpay Ltd (ASX: APT)

The Afterpay share price hit a new record high of $57.07 on Tuesday. Investors have continued to pile into the buy now pay later sector on the belief that the pandemic has accelerated the adoption of the payment method. In addition to this, strong sales and customer growth in the United States and the prospect of an expansion into the Asia market in the future has got investors excited. The latter follows recent news that WeChat owner Tencent Holdings has become a substantial shareholder.

Macquarie Telecom Group Ltd (ASX: MAQ)

The Macquarie Telecom share price reached an all-time high of $35.00 yesterday. Investors were buying the data centre and telecom company’s shares on Tuesday after it revealed plans to build a new data centre. Macquarie Telecom will start building the Intellicentre 5 Bunker (IC5 Bunker) at its Canberra campus in July. This is in response to increased demand for cloud and cyber security services in its government segment. Stage one is expected to complete in December.

Ramelius Resources Limited (ASX: RMS)

The Ramelius share price stormed to new high of $1.86 on Tuesday. When the gold miner’s shares reached that level, it meant they were up 130% since this time last year. Investors have been buying Ramelius’ shares after the gold price charged higher in 2020 due to the pandemic and interest rate cuts. The company’s shares were also given a boost last week when S&P Dow Jones indices announced its inclusion in the S&P/ASX All Australian 200 Index from 22 June 2020.

More reading

• ASX 200 jumps almost 4%, Webjet share price soars
• Why I would buy CSL and these ASX blue chip shares
• ASX tech shares are soaring – these are my top 3 today
• The Zip Co share price is up 500%. Too late to invest?
• Why Afterpay, Super Retail, Uniti, & Viva Energy are charging 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 Macquarie 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.

The post Why Afterpay and these ASX shares just stormed to new highs appeared first on Motley Fool Australia.

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On Tuesday the S&P/ASX 200 Index (ASX: XJO) rebounded strongly and recorded a very strong gain. The benchmark index jumped 3.9% to 5,942.3 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 poised to extend its gains.

It looks set to be another good day of trade for the ASX 200. According to the latest SPI futures, the benchmark index is expected to open the day 26 points or 0.45% higher this morning. This follows a positive night of trade on Wall Street which saw the Dow Jones rise 2.05%, the S&P 500 jump 1.9% higher, and the Nasdaq index stormed 1.75% higher. Strong U.S. retail sales data helped drive Wall Street higher.

Oil prices rise.

Energy producers such as Oil Search Limited (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) could be on the rise today after oil prices pushed higher. According to Bloomberg, the WTI crude oil price rose 2.4% to US$37.99 a barrel and the Brent crude oil price climbed 2.5% to US$39.76 a barrel. Supply cuts have been supporting oil prices.

Gold price jumps.

It could be a positive day of trade for gold miners including Evolution Mining Ltd (ASX: EVN) and Saracen Mineral Holdings Limited (ASX: SAR). Overnight the gold price stormed higher amid concerns over a coronavirus outbreak in China. According to CNBC, the spot gold price is up 0.5% to US$1,735.90 an ounce

Viva Energy given buy rating.

The Viva Energy Group Ltd (ASX: VEA) share price was a very strong performer on Tuesday but could still go higher according to analysts at Goldman Sachs. This morning its analysts retained their buy rating and lifted their price target on the fuel retailer’s shares to $2.15. The broker notes that fuel volumes are recovering quicker than expected and its guidance is well ahead of consensus expectations.

Jumbo Interactive to return.

The Jumbo Interactive Ltd (ASX: JIN) share price is scheduled to return from its trading halt this morning. The online lottery ticket seller requested the halt on Monday while it prepared an announcement relating to the Western Australia lottery market. Last year the state government suggested it might privatise its wagering.

More reading

• ASX 200 jumps almost 4%, Webjet share price soars
• Top brokers just upgraded these ASX 200 shares today
• 3 ASX 200 shares to buy for income and growth
• Why I think this ASX 200 rally is fake
• UBS picks the best ASX retail stocks for the post COVID-19 world

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive 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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