Category: Stock Market

Investing in your 40s is about balance. You’re no longer just building from scratch, but you’re also not in full capital-preservation mode. You still need growth, yet you probably want more resilience and structure than you did in your 20s.

For many investors in this stage of life, exchange-traded funds (ETFs) can provide exactly that mix of growth, diversification, and simplicity.

Here are three ASX ETFs I think could make a lot of sense for investors in their 40s.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

In your 40s, I still believe global exposure is essential.

The Vanguard MSCI Index International Shares ETF provides access to around 1,300 stocks across developed markets outside Australia. That includes global leaders in technology, healthcare, consumer goods, and industrials.

The Australian market is heavily concentrated in banks and miners. The VGS ETF helps diversify away from that concentration and gives exposure to sectors that can drive long-term structural growth.

With potentially 20 or more years until retirement, maintaining meaningful exposure to global growth remains important.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

If I’m in my 40s, I’d be increasingly focused on quality.

The VanEck Morningstar Wide Moat ETF invests in US-listed stocks that analysts believe have competitive advantages, or moats, and are trading at attractive valuations.

This aligns closely with the philosophy of investors like Warren Buffett, who emphasise buying wonderful businesses with sustainable advantages rather than chasing speculative growth.

For someone in their 40s, the MOAT ETF can offer exposure to high-quality global stocks while maintaining a valuation discipline. It is a way to position a portfolio for resilience and strong business fundamentals without selecting individual stocks.

Vanguard Diversified Growth Index ETF (ASX: VDGR)

Simplicity becomes increasingly valuable as life gets busier.

The Vanguard Diversified Growth Index ETF provides exposure to Australian, international, and emerging-market shares, as well as fixed income, in a single fund. It is designed as a diversified growth portfolio, meaning it leans toward equities but includes some defensive assets.

For investors in their 40s who may not want to manage asset allocation themselves, the VDGR ETF can act as a core holding. It automatically maintains diversification across asset classes, helping to smooth volatility over time.

That structure can make it easier to stay invested during market swings.

Why ETFs can be powerful in your 40s

By your 40s, wealth is often starting to compound meaningfully. The priority shifts from chasing maximum upside to building something durable.

ETFs help reduce single-stock risk, provide broad diversification, and keep costs relatively low. They also make regular investing straightforward, which is crucial for staying disciplined.

A combination of global market exposure through the VGS ETF, quality-focused investing via the MOAT ETF, and diversified asset allocation through the VDGR ETF could form a well-balanced framework for this stage of life.

Foolish Takeaway

Your 40s are a pivotal investing decade. There is still time for growth, but portfolio construction and risk management matter more than ever. ASX ETFs can provide a thoughtful blend of global exposure, quality tilt, and diversification.

The post Why these ASX ETFs could be strong buys for investors in their 40s appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs for a stress-free start to investing
• The $10,000 ASX share portfolio I’d build for a 25-year-old today
• 2 incredible ASX share investments I’d buy to build long-term wealth
• How to make $25,000 of passive income a year
• The lazy investor’s guide to ASX ETFs

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended VanEck Morningstar Wide Moat ETF and Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

While the broader S&P/ASX 200 Index (ASX: XJO) has edged just 5.8% higher this year, the real opportunities may be lurking beneath the surface. Brokers have identified 2 ASX 200 shares that could outpace the benchmark in 2026: Mesoblast Ltd (ASX: MSB) and Zip Co Ltd (ASX: ZIP).

Here’s why analysts think these ASX growth shares are gearing up to outperform.

Mesoblast: high-risk, high-reward biotech

This ASX 200 share is not for the faint-hearted. It’s a classic high-risk, high-reward biotech play, that has lost 25% in value so far this year.

However, momentum seems to be finally swinging its way. Mesoblast released its half-year result and an operational update on Friday.

For the six months to 31 December 2025, the ASX 200 share delivered total revenue of US$51.3 million. That’s a massive jump from just US$3.2 million a year earlier. While the company still reported a net loss of US$40.2 million, this was an improvement on last year’s US$47.9 million loss.

Operationally, the rollout of Mesoblast’s leading product Ryoncil continues to build momentum. So far, 49 transplant centres are up and running, with a target of 64 centres covering 94% of US transplants. Ryoncil generated gross sales of US$57 million and net revenue of US$48.7 million after adjustments. The product also delivered gross profit (excluding amortisation) of US$44.2 million during the half.

Mesoblast finished the period with US$130 million in cash and locked in a US$125 million five-year non-dilutive credit facility, giving its balance sheet a serious boost.

But let’s be clear — this story still carries real risk. Mesoblast has burned significant capital over years of development. The cell therapy space is competitive. Regulatory delays have tested investor patience before. And even with approvals in hand, commercial execution must deliver.

If momentum continues, the upside could be meaningful. If it stumbles, another nosedive of the ASX 200 share will follow just as quickly.

Bell Potter is bullish on the $3 billion biotech stock. The broker just retained its speculative buy rating and $4.45 price target. Based on its current share price, this points to potential upside of roughly 116% over the next 12 months.

Zip: sharp selloffs, punchy rebounds

The ASX 200 share has been a rollercoaster in recent weeks. A sharp sell-off after its full-year result was followed by punchy a rebound as bargain hunters stepped in. Still, the damage for this year stands at a 45% decline to $1.75 at the time of writing.

On the surface, the numbers of the ASX 200 share weren’t bad. Earnings jumped. Guidance ticked higher. Momentum looked solid. But investors zoomed in on the details.

Margins slipped to 7.9% as the faster-growing, lower-margin US business drove more volume. Net bad debts edged up to 1.73% of TTV — still within board targets, but high enough to keep nerves on edge.

Management also flagged that second-half cash EBITDA will mirror the first. In other words, profit growth may stall before it accelerates again.

The deeper issue is confidence. The buy now, pay later space still faces regulatory pressure, rising competition, and the threat of higher credit losses if consumers tighten spending. Those risks haven’t gone away. And for an ASX 200 share that’s already been heavily sold, every hint of weakness gets punished.

What happens next?

Execution is everything. Zip needs to turn new products into reliable, repeat revenue and prove margins can stabilise.

Not everyone is bearish. UBS remains positive, keeping its buy rating on the ASX 200 shares and a $4.50 price target. That suggests potential upside of 157% over the next 12 months.

The post 2 ASX 200 shares tipped to more than double in value appeared first on The Motley Fool Australia.

More reading

• Why this ASX 200 stock is being tipped to rocket 100%
• 2 battered ASX shares that look too cheap to ignore
• Why Zip shares are bouncing back 5% today
• What’s going on with Mesoblast shares today?
• Mesoblast shares: Revenue surges on Ryoncil® US launch in H1 FY2026

Motley Fool contributor Marc Van Dinther 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.

Not everyone wants to monitor earnings updates, track sector rotations, or decide which individual dividend stock to buy next.

Some investors simply want reliable income, broad diversification, and minimal effort. If that sounds appealing, I think there’s a strong case for building a “lazy” passive income portfolio using just one ASX ETF.

If I had to choose only one, I’d look at the Vanguard Australian Shares High Yield ETF (ASX: VHY).

Here’s why.

Diversification in a single trade

The VHY ETF currently holds 79 ASX shares, focusing on companies with higher forecast dividend yields.

With one purchase, you gain exposure to some of the largest income generators in the Australian market. Its top holdings include BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), Telstra Group Ltd (ASX: TLS), Rio Tinto Ltd (ASX: RIO), Woodside Energy Group Ltd (ASX: WDS), and Transurban Group (ASX: TCL).

That mix gives exposure across banks, resources, infrastructure, energy, and telecommunications. Instead of trying to pick which bank will perform best or whether BHP is preferable to Rio, the ETF spreads your money across them.

For a passive-income investor who wants simplicity, that level of diversification is powerful.

A balanced income stream

The Vanguard Australian Shares High Yield ETF currently averages a dividend yield of around 4%, paid quarterly.

In my view, that is an attractive starting point. It is high enough to generate meaningful income, but not so high that it suggests excessive risk. Very high dividend yields can sometimes signal stretched payout ratios or vulnerable earnings. A diversified 4% yield backed by large, established ASX shares feels more sustainable.

For investors who are still accumulating wealth, those dividends can be reinvested to buy more ETF units, which in turn generate more income. Over time, that compounding effect can significantly boost total returns.

For investors approaching retirement, the same income stream can instead be used to support living expenses.

Why this suits “lazy” investors

A one-ETF approach removes complexity.

There is no need to monitor individual earnings reports closely or worry about whether one company might cut its dividend. The ETF structure spreads that risk across dozens of holdings.

It also makes regular investing straightforward. You can add to the same fund consistently each month or quarter without constantly reassessing your portfolio construction.

That simplicity can be an advantage. In my experience, the fewer moving parts in a portfolio, the easier it is to stay disciplined during market volatility.

The trade-off to understand

Of course, using just one ETF means your exposure is concentrated in the Australian market. The VHY ETF has meaningful weightings in banks and resource companies because those sectors tend to offer higher dividend yields.

That concentration is part of the design. It supports income, but it also means performance will be influenced by how those sectors perform over time.

For an investor seeking global diversification, a single high-yield Australian ETF may not be enough. But for someone who wants a straightforward, income-focused strategy with minimal effort, it can be a very practical solution.

Foolish Takeaway

Building a passive income portfolio does not need to be complicated.

With the Vanguard Australian Shares High Yield ETF, you gain exposure to 79 dividend-paying ASX shares in a single trade, with an average yield of around 4%.

For investors who value simplicity, diversification, and steady income over constant stock picking, this kind of one-ETF strategy could be one of the easiest ways to build a truly “lazy” passive income portfolio on the ASX.

The post How to build a ‘lazy’ passive income portfolio with just 1 ASX ETF appeared first on The Motley Fool Australia.

More reading

• How to make $25,000 of passive income a year
• Here’s a $50,000 starter dividend portfolio delivering passive income
• 3 ASX ETFs for investors chasing yield and growth
• These are my top ASX passive income picks
• How ETFs can help investors build significant passive income

Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia and Transurban Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group and Transurban Group. The Motley Fool Australia has recommended BHP Group and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Buying the right ASX shares offers one of the best means I know of for Australians to secure a welcome extra passive income during their retirement years.

One of the advantages we have Down Under, which investors in US and many international stocks don’t, is that a lot of ASX dividend shares come with full franking credits.

That means the companies you’ve invested in have already stumped up the 30% corporate taxes on the dividends they’re paying. Meaning you get credit for that when it comes time to pay your own taxes.

Nice, right?

Now, there’s no getting around this first part.

If you don’t have any savings at 30, and you’re aiming to retire with an extra $24,600 of passive income a year by 65, you’ll need to start putting away a little extra cash each month to buy ASX shares.

Let’s say $100 per month. That’s less than $25 each week.

Buy $100 a month of quality ASX shares

To begin with, you don’t need to stick strictly to ASX dividend stocks. Instead, do your own research – or reach out for expert advice – and invest in a diversified basket of quality shares. Ones that are likely to outperform or at least match the benchmark returns to reach your passive income retirement goal.

Let’s use the S&P/ASX 200 Gross Total Return Index (ASX: XJT) – which includes all cash dividends reinvested on the ex-dividend date – as our benchmark.

Over the last five years, the ASX 200 Total Return Index has gained 64.6%. That works out to around a 10.5% annual gain, compounded.

Now, here’s the real power of compounding at work.

By investing $100 a month in ASX shares and returning an average of 10.5% per year, you’ll have secured $21,801 in 10 years, $81,050 in 20 years, $251,640 in 30 years, and … drum roll please … $432,264 at the end of 35 years.

All from that $100 per month, or a total of $42,000 invested in ASX shares over the years.

Reposition into top ASX passive income stocks

Now you’ve reached 65, with one eye firmly on that retirement boosting passive income stream.

Here is where you can reposition your investment portfolio wholly into dividend-paying ASX 200 shares. Ideally, ones offering full franking credits.

If you were eyeing a similar situation today, three top ASX dividend shares you might want to consider adding to your passive income portfolio are Woodside Energy Group Ltd (ASX: WDS), Fortescue Ltd (ASX: FMG), and Bank of Queensland Ltd (ASX: BOQ).

Over the past 12 months, Bank of Queensland shares have delivered 38 cents per share in fully-franked dividends. That sees the ASX 200 bank stock trading on a trailing dividend yield of 5.5%.

Fortescue shares have paid (or shortly will pay) $1.22 in fully-franked dividends over 12 months. Fortescue shares trade on a trailing dividend yield of 6%.

And Woodside shares have paid out (or shortly will) $1.652 apiece in fully-franked dividends over a year. Woodside shares trade on a 5.5% trailing dividend yield.

So, how about that passive income?

Well, if you were to invest an equal amount into all three ASX 200 shares, you’d earn an average yield (based on the past 12 months) of 5.7%.

Meaning you can now take out $24,639 a year in passive income from your $432,264 investment portfolio without drawing down on that capital.

The post No savings at 30? Here’s how I’d aim for an extra $24,600 a year in retirement boosting passive income buying ASX shares appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Oil prices rocket to 4-year high as ASX energy giants surge
• Why Ampol, EOS, Lynas, and Woodside shares are roaring higher today
• Why Brainchip, Fortescue, Qantas, and Westpac shares are dropping today
• Santos and Woodside shares surging higher on Monday as oil price in focus amid Iran strikes

Motley Fool contributor Bernd Struben 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.

The S&P/ASX 200 Index (ASX: XJO) managed to kick off the trading week on a positive note, despite a rough start to trading this morning. Amid concerning geopolitical developments over the weekend, the ASX 200 opened deep in the red this morning, but managed to recover throughout the day to close 0.0025% higher.

That leaves the index right on yet another record high of 9,200.9 points.

This volatile start to the trading week for Australian investors follows a decidedly negative finish to the American trading week on Saturday morning (our time).

The Dow Jones Industrial Average Index (DJX: .DJI) finished its week on a low note, sinking 1.05%.

The tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) was in a similar boat, dropping 0.92%.

But let’s return to this week and the local markets now with a look at how the different ASX sectors handled today’s temperamental trading conditions.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

More reading

• These ASX defence stocks are rallying. Is it too late to buy?
• This ASX 200 energy stock just jumped 13%. Here’s why
• Oil prices rocket to 4-year high as ASX energy giants surge
• Why DroneShield shares soared in February and are rocketing into March
• Why Ampol, EOS, Lynas, and Woodside shares are roaring higher today

Motley Fool contributor Sebastian Bowen has positions in Newmont. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. 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.

The team at Morgans has been busy reviewing the countless results released last month.

Let’s see what the broker is saying about the popular ASX shares listed below and whether it thinks there’s a buying opportunity here for investors. Here’s what it is saying:

HMC Capital Ltd (ASX: HMC)

The broker notes that this diversified investment company’s headline earnings were well short of expectations. However, it thinks it is worth sticking with this one.

This is especially the case given its current valuation, which could be cheap according to the broker. As a result, it has retained its buy rating with a trimmed price target of $4.45. It said:

Management fee revenue grew 34% to $84.5m as AUM expanded 4% to $19.5bn, with headline EPS of 10.1c pre-tax softer yoy and well below consensus expectations, as energy transition gains are to fall in 2H26. The KKR Energy Transition partnership, closing mid-26, de-risks the balance sheet and unlocks a 5.7GW development pipeline, with full-year guidance reaffirmed at 40+c pre-tax EPS.

We still see value in HMC, with our market-to-market NTA at c.$2.30 per share, or c.$3.00 when we factor in our valuation for the listed co-investments (HDN, HCW, DGT), while the c.$60m of recurring funds management EBITDA adds additional value. We retain a Buy with a $4.45 price target (down from $4.85).

Ramsay Health Care Ltd (ASX: RHC)

This private hospital operator delivered a profit that was better than expected during the first half. This was driven partly by a solid operational performance.

However, with ongoing cost headwinds, the broker has only retained its hold rating with an improved price target of $40.77. It commented:

1HFY26 underlying net profit exceeded expectations, assisted by lower finance charges and favourable non-controlling interest movements. Operationally, performance was solid, led by improving Australian activity and earnings, while UK acute held its own, Elysium remained soft, but continues its gradual turnaround, and EU is stable on better cost control.

While progress is being made across the portfolio, the sustainability of profitable remains in question, with ongoing cost headwinds, the early stage of a multi-year transformation program in Australia and a largely qualitative FY26 outlook. We adjust FY26-28 earnings, with our price target increasing to A$40.77. Hold.

Sigma Healthcare Ltd (ASX: SIG)

The owner of Chemist Warehouse reported a solid half-year result according to Morgans.

However, due to its current valuation, the broker has downgraded Sigma’s shares to an accumulate rating with a $3.36 price target. It said:

SIG posted a solid 1H26, which was in line with consensus. The highlights included solid CW LFL sales growth (up 15%), revenue growth higher than cost growth by 4.5%, and synergy targets on track. We have made modest downgrades to forecasts (D&A and interest charges) resulting in a slight reduction to our target price of A$3.36 (was A$3.39). We move to an ACCUMULATE (was Buy) due to YTD share price strength.

The post Buy, hold, sell: HMC Capital, Ramsay Health Care, and Sigma shares appeared first on The Motley Fool Australia.

More reading

• 5 of the best ASX 200 stocks to buy and hold in February revealed
• 2 great ASX 200 blue-chip shares I’d buy right now
• What is Morgans saying about Ramsay Healthcare and Karoon Energy shares?
• 7 ASX All Ords shares finish earnings season on a 52-week high
• Here’s everything you need to know about Ramsay’s latest dividend

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

The WiseTech Global Ltd (ASX: WTC) share price is under pressure once again on Monday.

At the time of writing, WiseTech shares are down 5.03% to $45.15. That leaves the stock trading near its recent lows and well below where it stood this time last year.

After such a dramatic fall, investors may be wondering just how low WiseTech shares could go from here.

A steep decline from peak levels

It has been a brutal 12 months for this former market darling.

WiseTech shares reached a 52-week high of $121.31 in July last year. Today, they are trading more than 60% below that peak.

The stock recently fell to as low as $40.59 on 13 February before staging a modest rebound. Even so, the broader trend remains firmly downward.

From a technical perspective, WiseTech is still making lower highs and lower lows, which is the textbook definition of a downtrend.

Where is support?

The $40 to $41 region is now the key level to watch. That marked the February low and is the closest clear area of support on the chart.

If that level fails, there is little obvious historical support until the mid $30’s, which acted as a consolidation zone back in 2022.

On the upside, the $50 level now shapes as near-term resistance. The shares have repeatedly struggled to reclaim that area in recent weeks. Above that, the $60 zone could present the next hurdle, having previously acted as support before breaking down.

What do the technical indicators show?

Momentum indicators suggest the sellers still have the upper hand.

The relative strength index (RSI) is sitting around 38. That is not yet in deeply oversold territory below 30, but it does indicate weak momentum and limited buying pressure.

Meanwhile, the share price is trading close to the lower Bollinger Band. While this can sometimes signal that a stock is stretched in the short term, shares can continue to track the lower band for extended periods during strong downtrends.

Do brokers see value at these levels?

Despite the sharp decline, some brokers remain constructive on the long-term outlook.

UBS recently reiterated its buy rating with a price target of $89. That implies potential upside of close to 100% from current levels, assuming its growth and margin assumptions are met.

Bell Potter has also retained a buy recommendation, though it trimmed its price target to $83.75. Even at that lower target, the broker sees material upside from the current share price.

However, it is worth noting that price targets have been progressively reduced over recent months as earnings expectations have been revised.

So how low can it go?

Technically, as long as WiseTech shares remain below key resistance levels and continue to trend lower, the risk of another leg down cannot be ruled out.

A decisive break below $40 could open the door to a move into the mid $30s. On the other hand, a sustained move back above $50 would be the first sign that selling pressure is easing.

At this stage, the chart continues to favour a cautious approach. Longer term, however, brokers clearly believe the current weakness could present an opportunity for patient investors willing to tolerate volatility.

The post How low can WiseTech shares go? appeared first on The Motley Fool Australia.

More reading

• Follow Warren Buffett: 3 cheap ASX 200 shares worth a closer look
• ASX 200 at a record high? Here’s where I still see value
• If I had to build an ASX share portfolio from scratch today, here’s how I’d do it
• The boss of which tech company has just bought $1m worth of shares?
• Why this expert thinks the WiseTech share price can rise 80% in the next 12 months

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

The Lynas Rare Earths Ltd (ASX: LYC) share price has surged to a fresh 5-month high on Monday after the company confirmed a major regulatory milestone.

At the time of writing, shares are up 4.32% to $19.80. Earlier in the session, the stock climbed to $20.30, its highest level since October 2025.

The rally follows a strong few weeks for the rare earths producer, with momentum building after last week’s half-year results.

10-year licence renewal removes key overhang

Lynas announced today that its Malaysian operating licence has been renewed for a further 10 years, commencing 3 March 2026.

The renewal secures the long-term future of its Malaysian processing operations, a critical link in Lynas’ global rare earths supply chain.

Management said the extended term provides greater investment certainty for the company and its customers. Importantly, it also removes a regulatory overhang that has periodically weighed on investor sentiment in past years.

Governments are prioritising supply chain security and reducing reliance on China. Against that backdrop, the decision strengthens Lynas’ position as the largest producer of separated rare earths materials outside China.

Strong half-year result underpins momentum

The latest announcement builds on solid half-year numbers released just last week.

For the 6 months to 31 December 2025, revenue climbed to $413.7 million, up from $254.3 million a year earlier. Net profit after tax (NPAT) jumped to $80.2 million, compared to $5.9 million in the prior corresponding period.

EBITDA increased significantly to $152.4 million, reflecting improved pricing and higher NdPr volumes.

Lynas ended the period with $1.03 billion in cash. The strong cash position supports its balance sheet and gives the company flexibility to fund expansion initiatives under its ‘towards 2030’ growth strategy.

What are the charts signalling?

From a technical perspective, Lynas is trading near the upper Bollinger Band, suggesting strong upward momentum.

The relative strength index (RSI) is sitting around 76, which places the stock in overbought territory. While that can indicate short-term consolidation risk, strong trends can remain overbought for extended periods.

The $20.30 level now acts as near-term resistance. A decisive break above this level could open the door to a retest of the $22 region, where the stock previously peaked in 2025.

On the downside, initial support appears around $18.50, with stronger support near $16 if sentiment were to cool.

Can the rally continue?

The outlook will hinge on rare earth pricing and Lynas’ ability to execute on its expansion plans.

Earnings momentum has clearly improved, the balance sheet remains strong, and regulatory uncertainty in Malaysia has now been addressed. That provides a firmer foundation than the company has had in previous cycles.

That said, after a strong run and with the RSI in overbought territory, some consolidation would not be surprising. Whether the stock can push above $20.30 may depend on continued strength in the rare earths markets and broader investor sentiment toward critical minerals.

The post Lynas shares jump to 5-month high. Can this rally continue? appeared first on The Motley Fool Australia.

More reading

• Why Ampol, EOS, Lynas, and Woodside shares are roaring higher today
• 5 of the best ASX 200 stocks to buy and hold in February revealed
• Lynas Rare Earths shares: Malaysia licence renewed for 10 years
• ASX 200 materials sector leads as earnings season ends with a record high
• These ASX 200 shares jumped 15% or more in February

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lynas Rare Earths Ltd. 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 defence shares are charging higher as escalating conflict in the Middle East fuels expectations of higher military spending.

Tensions between the United States, Israel, Iran, and Hezbollah intensified over the weekend. Iran reportedly launched waves of Shahed 136 one-way attack drones toward targets across the Gulf region, including the United Arab Emirates.

The escalation has pushed oil prices higher and put defence capability back at the centre of investor focus.

Here are 3 ASX defence stocks leading the charge.

DroneShield Ltd (ASX: DRO)

The DroneShield share price is up 10.50% today to $4 apiece.

That brings its gains to roughly 24% over the past week.

DroneShield specialises in counter-drone detection and mitigation systems. Its technology is designed to identify, track, and disable hostile drones, including systems similar to the Shahed 136 platform reportedly used in recent attacks.

As drone warfare becomes more prominent, demand for anti-drone solutions has accelerated globally. Governments are reassessing defence readiness, particularly around critical infrastructure, airports, and military facilities.

The latest developments in the Middle East have only highlighted how relevant DroneShield’s technology has become.

Elsight Ltd (ASX: ELS)

The Elsight share price is up 10.99% today to $5.25.

Even more striking, the stock has surged almost 50% in just 1 week.

Elsight provides secure connectivity solutions for drones and autonomous systems. Its Halo platform enables reliable data transmission across multiple communication networks, which is critical for military, emergency response, and unmanned operations.

As drone deployment expands across conflict zones, secure and uninterrupted connectivity becomes increasingly important. That longer-term shift appears to be driving renewed interest in the company.

However, after such a rapid move, volatility is likely to remain high in the near term.

Electro Optic Systems Holdings Ltd (ASX: EOS)

The EOS share price is currently up 10.58% to $9.93. Earlier in the session, the stock was up more than 15%.

EOS shares are now up close to 40% over the past week.

The company recently announced it had secured a contract with a Middle Eastern country for its remote weapon systems (RWS). These systems are designed to deliver highly accurate defensive fire, including against drone threats.

In a region now experiencing live drone and missile attacks, that capability is clearly front of mind for defence planners. The timing of the contract has strengthened the view that EOS sits in a strategically important segment of the market.

Is it too late to buy?

History shows defence spending usually climbs when global tensions rise. And once governments lift budgets, they rarely reverse those decisions quickly.

Right now, drone warfare and counter-drone defence are at the forefront of modern conflicts.

All 3 stocks have surged in a matter of days. That reflects genuine shifts in global risk, but it also means expectations have moved quickly.

The real test will be execution. Can these companies convert stronger demand into sustained revenue growth and improve margins?

If tensions in the Middle East persist, these defence names could remain in favour. But after such rapid gains, investors should expect volatility and manage position sizes carefully.

The post These ASX defence stocks are rallying. Is it too late to buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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 DroneShield and Electro Optic Systems. 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 think the best ASX stocks to own are ones that can grow their earnings (and dividends) over time. This gives a business the ability to provide both passive income and capital growth. I want to highlight why Nick Scali Ltd (ASX: NCK) could be a top choice today for passive income.

Nick Scali is a furniture retailer that sells through three different business divisions – in Australia, it has Nick Scali and Plush. Nick Scali is also working on a UK expansion plan.

It has an impressive dividend history. The company increased its annual dividend each year between FY13 and FY23. However, profitability has struggled in the annual results since then due to inflation, interest rates, and challenging trading conditions.

But the FY26 half-year result saw a recovery in conditions, profit, and the dividend. It was the largest interim dividend since FY23. Let’s look at why this is a good time to invest in the ASX stock for passive income.

Exciting outlook for the ASX stock

The numbers the business reported for the first six months of the 2026 financial year were very positive.

In HY26, the business revealed that group revenue increased 7.2% to $269.3 million, the gross profit margin improved 310 basis points to 65.4%, operating profit (EBIT) climbed 25% to $68.5 million, and underlying net profit after tax (NPAT) increased 23.1% to $41 million.

Looking at the individual markets, the UK business is going through a transition to Nick Scali branding. It’s refurbishing and rebranding a number of stores, which is why UK revenue declined 38.5% to $17.6 million and the underlying net loss worsened by 100% to $5.6 million.

ANZ revenue increased 13.1% year over year, and ANZ net profit jumped 29.4% to $46.6 million.

Statutory net profit jumped 36.4% to $41 million, allowing the business to hike its interim dividend per share by 30% to 39 cents per share.

The performance in January was positive too, with ANZ written sales orders increasing by 3.1% year over year. A further five new stores are confirmed to open in ANZ, and additional opportunities are being reviewed. Extra stores are a big driver of earnings.

A majority of the UK store refurbishment program is now complete, and it has “seen improvement in written sales compared to the prior year”. Total January written sales came to $6.7 million.

The four Nick Scali-branded stores in the UK that were trading in both January 2025 and January 2026 saw like-for-like sales growth of 32%. The gross profit margin is steadily rising in the UK, too, as it sells more Nick Scali items.

The projection on CommSec suggests that Nick Scali could pay an annual dividend per share of 78.1 cents in FY26. That translates into a forward grossed-up dividend yield of 6.3% after today’s 5% decline in the Nick Scali share price, following a volatile weekend of geopolitical events.

Making $200 a month of passive income

The ASX stock doesn’t pay dividends monthly, so it’s good to think of the annual total and then divide it by 12.

To reach $200 per month of annual passive income, we’re talking about a total of $2,400. To receive that amount, that would require 3,033 Nick Scali shares, assuming the forecast becomes correct.

With the prospect of rising dividends in the coming years, I think this ASX stock is a solid long-term buy, particularly with its potential in the UK for store network growth and margin improvements.

The post I’d buy 3,033 shares of this ASX stock to aim for $200 a month of passive income appeared first on The Motley Fool Australia.

More reading

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• 35 ASX All Ords shares with ex-dividend dates next week
• ASX retail shares: Experts rate 2 to buy and 2 to sell
• What have we learned from earnings season so far?
• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nick Scali. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.