Category: Stock Market

S&P/ASX 200 Index (ASX: XJO) consumer discretionary shares led the 11 market sectors last week with a 3.61% gain.

Meanwhile, the ASX 200 Index drifted 0.73% lower to finish at 8,764.2 points on Friday.

Economic data released last week suggests the Reserve Bank (RBA) may keep interest rates on hold for a while.

Unemployment fell 0.1% to to 4.4% and annual inflation dropped 0.2% to 4% in May, according to the Bureau of Statistics.

Commonwealth Bank of Australia (ASX: CBA) economist Ashwin Clarke said a 1.3% increase in household spending last month “surprised markets to the upside”.

Analysts are pricing in an 81% chance that the RBA will keep interest rates on hold at the next meeting on 11 August.

This is why ASX 200 retail shares outperformed their peers last week.

Let’s take a look at some individual company performances.

Consumer discretionary shares led the ASX sectors last week

The Wesfarmers Ltd (ASX: WES) share price rose 5.81% to finish at $90.74 on Friday.

Shares in gaming technology company Aristocrat Leisure Ltd (ASX: ALL) lifted 6.81% to $58.69.

The Lottery Corporation Ltd (ASX: TLC) share price rose 1.26% to $5.63.

The JB Hi-Fi Ltd (ASX: JBH) share price ascended 4.98% to $81.84 on Friday.

Guzman Y Gomez Ltd (ASX: GYG) shares increased 7.42% to $20.27.

Temple & Webster Group Ltd (ASX: TPW) shares ripped 8.64% to $6.16.

The Harvey Norman Holdings Ltd (ASX: HVN) share price rose 1.04% to $4.88.

Super Retail Group Ltd (ASX: SUL) shares finished the week steady at $13.12.

ASX 200 travel share Flight Centre Travel Group Ltd (ASX: FLT) managed a 0.52% lift to $11.99.

Shares in Premier Investments Ltd (ASX: PMV) rose 2.45% to $14.65.

Myer Holdings Ltd (ASX: MYR) shares rose 6.9% to close the week at 31 cents per share.

The Breville Group Ltd (ASX: BRG) share price inched 0.38% ahead to $31.43.

Not all ASX 200 retail shares followed the trend.

The Light & Wonder Inc (ASX: LNW) share price tumbled 13.68% to $110.78.

Eagers Automotive Ltd (ASX: APE) shares dropped 4.5% to $21.43 apiece.

Lovisa Holdings Ltd (ASX: LOV) shares eased 0.68% to $23.25.

ASX 200 market sector snapshot

Here’s how the 11 market sectors stacked up last week, according to CommSec data.

Over the five trading days:

S&P/ASX 200 market sector	Change last week
Consumer Discretionary (ASX: XDJ)	3.61%
Consumer Staples (ASX: XSJ)	3.26%
Utilities (ASX: XUJ)	2.42%
Healthcare (ASX: XHJ)	1.64%
A-REIT (ASX: XPJ)	1.62%
Industrials (ASX: XNJ)	1.31%
Financials (ASX: XFJ)	(0.02%)
Communication (ASX: XTJ)	(1.22%)
Materials (ASX: XMJ)	(4.06%)
Energy (ASX: XEJ)	(4.13%)
Information Technology (ASX: XIJ)	(5.19%)

The post ASX 200 retail shares outperform on growing hopes interest rates have peaked appeared first on The Motley Fool Australia.

More reading

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• Buy, hold, sell: Beach Energy, Flight Centre, and Judo Capital shares
• How to invest $500, $5,000, and $50,000 on the ASX
• 3 top ASX shares to buy for an SMSF
• 6 ASX shares with upgraded ratings from experts this week

Motley Fool contributor Bronwyn Allen 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 Light & Wonder Inc, Lovisa, Super Retail Group, Temple & Webster Group, The Lottery Corporation, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Harvey Norman and Super Retail Group. The Motley Fool Australia has recommended Eagers Automotive Ltd, Flight Centre Travel Group, Light & Wonder Inc, Lovisa, Myer, Premier Investments, Temple & Webster Group, The Lottery Corporation, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are times when the market gives investors a better price for businesses that still have plenty going for them.

I think this could be one of those moments for two ASX 200 shares that have just fallen to 52-week lows.

REA Group Ltd (ASX: REA) hit a 52-week low of $131.07 on Friday, while Hub24 Ltd (ASX: HUB) shares dropped to a 52-week low of $68.70.

I see those prices as a chance to look again at two high-quality businesses with long-term growth potential.

REA Group shares

REA Group is one of the ASX businesses I would be happy to own for the long term.

The share price has come under pressure for a few reasons. Proposed changes to negative gearing, higher interest rates, and housing market weakness have all weighed on sentiment toward the property sector.

I can understand why investors are cautious. If sellers hold back, listings volumes can soften, and that can affect a business like REA.

But I think a lot of that concern is now reflected in the share price.

REA still sits close to one of the most important financial decisions many people make: buying and selling property. When someone is searching for a home, checking a suburb, comparing prices, finding inspection times, or contacting an agent, the process often starts online.

That is a powerful position because property advertising has high intent. A serious buyer is valuable to agents, sellers, developers, lenders, and other related businesses.

I also think REA has more ways to grow than just waiting for listing volumes to improve. It can keep improving the consumer experience, offer agents better digital tools, expand premium products, and use data to make the property search more useful.

If interest rates ease, I would expect housing confidence and listing activity to recover over time. At this lower price, I think REA is worth buying before that rebound becomes obvious.

Hub24 shares

Hub24 is another ASX 200 share I would buy after its recent pullback.

The company is exposed to a part of the financial system that keeps becoming more demanding. Financial advisers are dealing with more complex client needs, more reporting requirements, more investment options, and higher expectations around transparency.

That creates a real operational challenge. A strong wealth platform can help advisers manage portfolios, reporting, tax information, managed accounts, and client communication more efficiently. That is where Hub24’s appeal sits for me.

It is not just a business collecting funds under administration. I think it is becoming part of how advisers run their practices.

Australia’s wealth pool remains large, and the need for advice should continue as more people navigate retirement, superannuation, inheritance, and portfolio decisions. If Hub24 can keep making life easier for advisers and their clients, it should have a long runway for growth.

The risks include competition, valuation, market movements, and weaker investor sentiment toward growth shares. But I think Hub24 still has the usefulness and customer relevance to become more valuable over time.

Foolish Takeaway

I like using market pullbacks to revisit businesses with strong positions and clear long-term demand.

Neither of these ASX 200 shares needs perfect conditions to be attractive. They need to stay useful, keep improving their platforms, and remain important to the customers who rely on them.

At these lower prices, I think both are worth buying now.

The post 2 quality ASX 200 shares at 52-week lows to buy now appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Karoon Energy, Brambles, REA shares
• Why these top fundies are buying REA and TechnologyOne shares
• 3 quality ASX shares I’d buy (that aren’t CBA or Wesfarmers)
• 5 ASX growth shares I want in my portfolio in FY27
• These ASX 200 shares are down 40% to 65% and could be bargain buys

Motley Fool contributor Grace Alvino has positions in Hub24. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24. The Motley Fool Australia has recommended Hub24. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Woodside Energy Group Ltd (ASX: WDS) shares are one of the most popular ASX dividend options because of the company’s strength, dividend yield and potential future passive income payouts.

The ASX energy share usually has a good dividend yield, superior to that of peers like Santos Ltd (ASX: STO) and Beach Energy Ltd (ASX: BPT).

Woodside’s dividend has jumped around over the last decade, with significant shifts in resource prices over time.

In the company’s FY25 annual result (reported in February), it said that operating revenue declined 1%, underlying net profit declined 8%, statutory net profit dropped 24% and operating cash flow rose 23%. This led to the full-year dividend declining by 8%.

In this article, we’re going to look at the potential annual FY27 dividend, which will be paid partly in 2027 and partly in 2028 because its FY27 annual result and final dividend won’t be announced until February 2028.

FY 2027 dividend projection for owners of Woodside shares

According to the projection on Commsec, the ASX energy share is estimated to pay an annual dividend per share of A$2.918 for the 2027 financial year.

At the time of writing, this forecast translates into a dividend yield of 10.1% excluding franking credits and 14.5% including franking credits.

If someone were to invest $8,000 in Woodside, they would be able to buy 278 Woodside shares (with a little bit of money left over).

With those 278 Woodside shares, investors could receive $811.20 of cash and perhaps $347.66 of franking credits.

Is this a good time to invest in the ASX energy share for passive income?

According to CMC Invest, there have been nine recent analyst rating calls on the business in the last three months.

Of those nine ratings, two were a buy, five were a hold and two were a sell. So, on average, the investment professionals are neutral on the company’s valuation right now (at the time of writing).

The average price target of those nine analyst ratings is $31.39. That means, collectively, those analysts are predicting the Woodside share price will (at the time of writing) rise by around 10% over the next year.

In the past year, the Woodside share price has been close to $22 and above $35. So, analysts are expecting the company to be closer to its 52-week high than its 52-week low, following the Middle East events. The dividend could play an important part in whether the Woodside shares deliver a market-beating return in the next 12 months or not.

But, energy prices can be volatile, so other ASX shares may prefer investments that are more stable and are more predictable.

The post If I invest $8,000 in Woodside shares, how much passive income will I receive in 2027? appeared first on The Motley Fool Australia.

More reading

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• Is the Woodside share price a buy in July?
• 5 things to watch on the ASX 200 on Thursday

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 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.

When it comes to building long-term wealth for my kids, my focus is on high-quality ASX shares that can compound over decades.

After all, my kids are still little. So there’s no point in me chasing the next big booming growth stock when consistent growth is much more valuable for my kids’ futures

Here are two ASX 200 shares I’d buy and hold for my kids.

iShares S&P 500 ETF (ASX: IVV)

I think one of the best ASX shares to buy for kids is a broad-market ETF. Rather than picking individual stocks, an ETF gives its shareholders a stake in multiple companies at once.

IVV is a great example. The ETF provides its shareholders with exposure to around 500 of the largest US-listed companies, including well-known global brands, businesses with large customer bases, and those with strong balance sheets. 

The ETF holds major names that even your kids would be aware of. Such as Nvidia, Apple, Amazon, Tesla, Netflix and many others.

The benefit of investing in an ETF rather than a single stock is that if one company suffers a share price decline, it would have a limited impact on the ETF as a whole. 

And this is ideal for investors looking to buy ASX shares for their kids to hold for the long term. 

IVV is generally a low-risk investment versus trying to pick an individual winner. Instead of betting on a single company, investors are effectively buying their kids a slice of all the largest US businesses at once.

IVV pays passive income, too. It generally pays its shareholders four dividends per year. Most recently, it paid shareholders 13.95 cents per share in April, which translates to a trailing dividend yield of roughly 1% at the time of writing.

Telstra Group Ltd (ASX: TLS)

If I were to buy a single stock for my kids, it would be a classic ASX defensive share, such as Telstra.

The telecommunications company is dominant in Australia. It operates one of the country’s largest mobile networks and is a major fixed-line internet provider. 

Mobile phone and internet use are already considered necessities, and I think both services will only continue to grow over the next few decades.

This stable and growing demand means Telstra is also well-positioned to benefit from recurring revenue and earnings. And this will be the case regardless of the stage of the economic cycle we are in. 

This type of stock is also perfect for investors who want to hedge against potential volatility elsewhere in their kids’ portfolio.

And if that isn’t enough, Telstra’s defensive nature means it can also pay shareholders a consistent passive income, too.

The ASX 200 telco most recently paid shareholders a dividend of 10.5 cents per share in March, 90.48% franked. Analysts forecast Telstra to pay a total dividend of 21 cents in FY26. This translates to a forward dividend yield of around 4.1% excluding franking credits, at the time of writing.

Washington H. Soul Pattinson and Company Ltd (ASX: SOL)

If I were to focus on long-term dividend income. Soul Patts is another ASX share I’d consider buying for my kids. 

Soul Patts is an Australian diversified investment house. It’s often compared to Warren Buffett’s Berkshire Hathaway because it invests in a broad portfolio of assets ranging from ASX-listed companies, to private credit, to real estate, and others.

Not only is it widely regarded as Australian dividend royalty, but it’s also one of the few ASX shares that have continually raised its dividend payments over the past 28 years.

Soul Patts historically pays its fully-franked dividends twice per year in May and a final dividend in December. It occasionally also pays shareholders an additional special dividend.

For the first half of FY26, Soul Patts paid a fully-franked interim dividend of 48 cents per share. This was a 9.1% increase on the prior corresponding period.  At the time of writing, the ASX shares have a grossed-up dividend yield of around 2.4%, including franking credits.

The post 3 ASX shares I’d buy and hold for my kids appeared first on The Motley Fool Australia.

More reading

• Where should I invest inside SMSFs instead of property?
• Why US stocks have hit record highs while ASX shares have barely risen in 2026
• How to invest $500, $5,000, and $50,000 on the ASX
• Want a pay rise? These ASX dividend shares keep delivering
• 3 strong ASX ETFs for beginner investors

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended iShares S&P 500 ETF. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX dividend shares are some of my favourite investments in my portfolio because they provide a mix of passive income and long-term growth.

I own a mixture of ASX dividend shares, ASX growth shares and exchange-traded funds (ETFs) for a variety of investment purposes.

One of the businesses that I’ve made among my biggest positions is L1 Long Short Fund Ltd (ASX: LSF).

For me, there are three key reasons that I really like the listed investment company (LIC).

Good and growing passive income

The LIC has an impressive track record of delivering consistent dividend growth.

It has increased its annual payout each year since it started paying in FY21. The business recently changed to paying a quarterly dividend and it has been increasing its dividend every quarter.

If it continues growing its quarterly dividend at a similar pace, the next four dividends would come to a grossed-up dividend yield of 4.9%, including franking credits, at the time of writing.

I think that’s a solid starting point, with plenty of room for further dividend growth as a result of strong investment performance. I expect the November 2026 quarterly dividend to be 11.4% larger than the November 2025 quarterly dividend.

Strong investment performance

A LIC funds its dividends from the investment performance of its portfolio. With the ASX dividend share’s excellent long-term performance, it can continue paying pleasing passive income and funding growing payouts.

The performance has been so good that it has been able to deliver excellent capital growth too. In the past eight years, the L1 Long Short Fund share price has risen close to 130%.

The LIC targets a mixture of both ASX shares and international shares, through both normal investing and short-selling. Through that strategy, it’s able to utilise both good value and expensive shares, locally and globally, to its advantage.

In the past five years, the L1 Long Short Fund portfolio has returned an average of 17% (net) per year. That’s a great return, in my opinion! Of course, past performance is not a guarantee of future performance.

Diversification

One of the best reasons I like this business is how it generates returns. It hasn’t relied on technology businesses due to how it invests – it’s more likely to short a tech stock than invest in it for the long-term.

Instead, it looks at opportunities in other areas such as gold shares, copper shares, industrials and telecommunications. In other words, the ‘real’ economy.

You can make good returns in almost any business, including cyclical ones, if bought at the right price. So, by investing in this ASX dividend share, I’m getting exposure to companies and sectors I don’t in other parts of my portfolio.  

But, this isn’t the only ASX dividend share I want to buy for my portfolio.

The post Why I made this top ASX dividend share one of my biggest investments appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Tristan Harrison has positions in L1 Long Short Fund. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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.

Working out what superannuation balance you need at any retirement age depends entirely on your living situation, financial situation, and the lifestyle you want to live when you finally stop working.

The average retirement age in Australia is 65. But some like to wait a little longer, until they can (if eligible) access the Age Pension at age 67. Meanwhile, others might delay their retirement into their 70s to let their superannuation compound a little longer.

Don’t want to wait any longer than the average Aussie? Let’s break down what retiring at 65 might look like and how much money you will need.

What type of retirement do you want?

In Australia, retirement is generally split into two broad categories: modest and comfortable. 

A modest retirement, according to the Association of Superannuation Funds of Australia (ASFA), is defined as being able to cover expenses slightly above what the full Centrelink Age Pension would provide from age 67. This would cover things like basic health insurance and home repairs, but wouldn’t leave much room for leisure activities, and certainly not a holiday.

ASFA defines a comfortable retirement as one that enables retirees to maintain a good standard of living well beyond the age pension. It budgets for expenses beyond a modest retirement, including top-tier private health insurance and regular leisure activities. It allocates funds for home repairs or renovations, and perhaps even an annual holiday. 

What will a modest or a comfortable retirement cost me?

ASFA estimates that a modest retirement will cost around $36,434 per year for singles and $52,473 per year for couples. These figures assume you’ll also receive a part Age Pension.

For many Australians, a modest retirement is achievable, but it’ll require a tight budget, strict financial goals, and careful planning. But it goes without saying that every Australian strives to live a comfortable retirement far above the bare minimum.

A comfortable lifestyle means your budget will be a lot more flexible. 

ASFA data shows that a comfortable retirement is estimated to cost around $55,923 per year for singles and $78,566 for couples. Again, it assumes you’ll receive a part Age Pension and that you own your home in full. 

What do I need in my superannuation by age 65 to be able to afford that?

In order to fund a modest retirement, singles will need around $110,000 in their superannuation when they retire, and couples around $120,000. This should be achievable by the majority of Aussies by the time they reach age 65 and want to retire.

A comfortable retirement requires a lot more, though. Single Australians will need around $630,000 in their superannuation by age 65, and couples will need around $730,000.

There’s another catch

Keep in mind also that ASFA calculates these figures assuming you’ll access your superannuation from age 67. If you want to retire a little earlier at age 65, you’ll need to account for those two extra years of funds. 

You’ll also need to take into account your life expectancy from that point. 

For example, $54,840 per year on a balance of approximately $640,000 means ASFA’s data assumes you’ll only need to fund around 11 years of a comfortable retirement.

Add an extra two years on that, and your superannuation money will need to be spread more thinly.

Also, if you don’t own your home outright, you’ll also need to consider how you’ll pay your mortgage or rent on top of your other bills. 

It’s also wise to have an emergency fund set aside.

The post How much superannuation do I really need to retire comfortably at age 65? appeared first on The Motley Fool Australia.

More reading

• Where should I invest inside SMSFs instead of property?
• Could Woolworths shares be a smart defensive buy for FY27?
• Why US stocks have hit record highs while ASX shares have barely risen in 2026
• Buy, hold, sell: Beach Energy, Flight Centre, and Judo Capital shares
• How to invest $500, $5,000, and $50,000 on the ASX

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

Self-managed superannuation funds (SMSFs) are a great way to invest in a variety of asset classes, including ASX shares. Residential property is one potential investment, though that area may be less attractive if SMSFs can’t borrow to buy.

Labor and the Greens have reportedly struck a deal to pass the capital gains tax (CGT) and negative gearing changes announced in the Federal budget, while including a new measure to end SMSF borrowing to buy properties.

With that change in mind, I think there are still plenty of compelling investment opportunities, particularly on the ASX share market.

Commercial properties AKA real estate investment trusts (REITs)

SMSF investors could decide to invest in commercial properties instead, which may provide a higher yield than residential properties.

I like investing in real estate investment trusts (REITs) because they’re easy to transact on the ASX. We can buy into a portfolio of properties in a single investment, and the properties are managed for us by property fund managers.

There are various REITs to choose from, including ones based on industrial properties, farmland and so on.

Three of my favourites in the sector include Rural Funds Group (ASX: RFF), which owns farmland, Centuria Industrial REIT (ASX: CIP), which owns industrial property, and Charter Hall Long WALE REIT (ASX: CLW), which owns a diversified portfolio of properties with long leases.

There are other REIT sectors, like shopping centres and office buildings, though they face headwinds, so I’d be very selective about those two areas and only buy REITs at an attractive discount to their net asset value (NAV).

ASX dividend shares with fully franked dividends

An even more attractive area to invest could be companies that pay attractive, fully franked dividends. Franking credits are refundable tax offsets, which are great for Australian SMSF investors.

ASX blue-chip shares could be some of the most reliable businesses to own. I’m thinking of names like Telstra Group Ltd (ASX: TLS), Bunnings and Kmart owner Wesfarmers Ltd (ASX: WES) and Coles Group Ltd (ASX: COL). They each have a solid dividend yield and a track record of increasing their dividends annually over the last few years.

There are a few other S&P/ASX 200 Index (ASX: XJO) shares that have a strong track record of reliability, including Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and APA Group (ASX: APA). Lovisa Holdings Ltd (ASX: LOV) and JB Hi-Fi Ltd (ASX: JBH) also have an impressive track record of growing dividends over the long-term.

Finally, I’m a big fan of listed investment companies (LICs), which allow investors to diversify and gain exposure to quality assets while also receiving attractive dividend yields and growing payouts.

Some of my favourite LICs for passive income are MFF Capital Investments Ltd (ASX: MFF), WCM Global Growth Ltd (ASX: WQG), L1 Long Short Fund Ltd (ASX: LSF), Future Generation Global Ltd (ASX: FGG), Future Generation Australia Ltd (ASX: FGX), Hearts and Minds Investments Ltd (ASX: HM1) and WAM Microcap Ltd (ASX: WMI).

The post Where should I invest inside SMSFs instead of property? appeared first on The Motley Fool Australia.

More reading

• How to invest $500, $5,000, and $50,000 on the ASX
• Want a pay rise? These ASX dividend shares keep delivering
• 3 top ASX shares to buy for an SMSF
• 3 ASX stocks that should be in every retirement portfolio 
• 3 ASX dividend favourites are hitting 52-week highs today. Are investors getting defensive?

Motley Fool contributor Tristan Harrison has positions in Future Generation Australia, Future Generation Global, Hearts And Minds Investments, L1 Long Short Fund, Mff Capital Investments, Rural Funds Group, Wam Microcap, Washington H. Soul Pattinson and Company Limited, and Wcm Global Growth. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Apa Group, Mff Capital Investments, Rural Funds Group, Telstra Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Lovisa and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Woolworths Group Ltd (ASX: WOW) has not been the easiest ASX share to own recently.

Supermarket investing can look simple from the outside, but the reality is more demanding. Customers want value, suppliers want fair prices, regulators are watching, costs keep moving, and competition does not disappear.

Even so, I think Woolworths could be a smart defensive buy for investors looking ahead to FY27.

A business built around repeat decisions

The appeal of Woolworths starts with frequency.

Most households do not think about groceries as an investment theme. They just keep buying them. Week after week, people need food, cleaning products, personal care items, pet supplies, and household essentials.

That repeat demand gives Woolworths a strong base.

The company has a large store network, a major online presence, loyalty data, supply chain scale, and relationships with millions of customers. That gives it many ways to improve the shopping experience, manage stock, personalise offers, and make the weekly shop easier.

I think that customer connection is valuable.

In retail, small gains can matter. A better app, a faster delivery slot, fewer out-of-stocks, sharper pricing on key items, or a cleaner store experience can all influence where people spend their grocery budget.

Defensive does not mean effortless

Woolworths still has plenty of work to do.

Grocery retail has become politically sensitive because households are under pressure. The company needs to balance margins, customer trust, supplier relationships, staff costs, and investment in stores and technology.

That is a difficult balance.

But I think the best defensive businesses are not the ones with no challenges. They are the ones with enough scale, relevance, and cash generation to keep working through them.

Woolworths has those qualities.

It also has a place in the economy that should remain important regardless of market mood. People may delay a holiday, a new appliance, or a home renovation. They still need groceries.

Why I’d consider buying Woolworths shares

For investors, the question is whether Woolworths can turn its defensive position into acceptable long-term returns.

I think it can.

The company does not need to become a high-growth technology stock. It needs to keep earning customer trust, improve productivity, use data well, invest in online and store operations, and return cash to shareholders over time.

That may sound unexciting, but it can be valuable in a diversified portfolio.

Woolworths can provide a different kind of exposure to the ASX. It is linked less to commodity prices or banking margins and more to everyday household spending. That can make it useful when investors want stability.

Foolish takeaway

Woolworths is not a perfect business, but I think it remains a useful one.

The company sits close to Australian households, has scale that few retailers can match, and operates in a category where demand keeps returning. In FY27, that kind of resilience could be appealing if investors remain nervous about the economy.

The investment case is about owning a business that can keep serving customers, generating cash, and adapting to a tougher retail environment. For investors wanting a defensive ASX share with long-term relevance, I think Woolworths is worth considering.

The post Could Woolworths shares be a smart defensive buy for FY27? appeared first on The Motley Fool Australia.

More reading

• 3 ASX dividend favourites are hitting 52-week highs today. Are investors getting defensive?
• Are Woolworths shares still a buy at a 52-week high?
• This ASX 200 giant just hit a 52-week high. Is it getting too expensive?
• Woolworths shares soar to new multi-year high: Buy, sell or hold?
• One ASX dividend and one ASX growth stock to buy now

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 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.

US stocks have set new records this year while Australia’s benchmark S&P/ASX 200 Index (ASX: XJO) has barely risen.

The S&P 500 Index (SP: INX) is up 9% in the calendar year to date (YTD) and hit a record 7,620.9 points on 2 June.

The Nasdaq Composite Index (NASDAQ: .IXIC) reached a new peak of 27,190.21 points on 1 June, and is up 13% YTD.

The Dow Jones Industrial Average (DJX: .DJI) touched a new high of 52,281.19 points on 17 June, and has lifted 8% YTD.

Meanwhile, at the time of writing, ASX 200 shares have risen by less than 1% in 2026.

Here’s why.

US stocks are smashing ASX shares in 2026

Drew Meredith, a principal advisor at Wattle Partners, says the performance gap can be attributed to artificial intelligence (AI).

In an article on The Golden Times, Meredith explained:

The United States market is being driven by a small number of companies with outsized earnings power, almost all tied to artificial intelligence infrastructure.

Nvidia, Microsoft, Alphabet, Meta, and Amazon have delivered earnings growth that justifies, at least in part, the premium valuations US indices now carry.

Meanwhile, ASX shares are being held back by several elements that have little to do with the quality of our listed companies.

Meredith says:

The Federal Budget’s CGT reform package has weighed on sentiment in financial stocks, property, and healthcare.

The US-Iran conflict has created energy price uncertainty that hurts an economy reliant on stable commodity exports.

The Australian consumer sector is also weak, with confidence falling to one of its poorest levels in 50 years last month.

On top of that, the ASX does not have many companies exposed to the AI earnings cycle in the same way that the US markets do.

Our tech sector is pretty small. In fact, tech shares comprise just 2.1% of the ASX 200.

Should you buy US stocks?

Meredith warns against chasing performance, commenting:

If you are sitting with a predominantly Australian portfolio watching the gap widen, you are probably feeling a pull to do something.

That pull is understandable. It is also the thing most likely to cost you money.

Meredith explains a phenomenon called “recency bias”.

When one market dramatically outperforms another for two or three years, investors feel they were wrong to be diversified. That feeling is not evidence. It is recency bias.

The periods of sharpest US outperformance relative to global peers have consistently been followed by periods of mean reversion.

This happened after the dot-com peak in 2000. It happened in the early years after the GFC when US banks were recovering and Australian miners were printing money.

It does not happen on a schedule you can predict, which is precisely why systematic diversification matters more than tactical shifts.

‘Mean’ is a statistical term for ‘average’. Mean reversion is the idea that share prices don’t stay unusually high or low forever. They tend to move back toward their historical average over time.

How switching from ASX shares to US stocks will cost you

One of the biggest reasons not to switch from underperforming ASX shares into outperforming US stocks today is the tax implications.

Meredith, a retirement wealth specialist, explains it this way:

For many retirees who built their Australian equity positions over decades, switching from Australian to global exposure carries a meaningful capital gains tax cost.

Selling a long-held parcel of BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), or CSL Ltd (ASX: CSL) to buy more Vanguard MSCI Index International Shares ETF (ASX: VGS), Global X Fang+ ETF (ASX: FANG), or iShares S&P 500 AUD ETF (ASX: IVV) is not a free transaction.

If those shares have large embedded gains and you are selling them in a year where the CGT discount is already under political threat, the timing adds an additional layer of risk.

What should you do?

Meredith said investors shouldn’t sell ASX shares while they’re soft today to buy US stocks at a cyclical high.

You may end up paying a big CGT bill for what will become a diminishing performance gap as US stocks undergo mean reversion.

The most prudent step is to check how your portfolio’s composition has changed this year.

Meredith advises:

Check your allocation. Not your recent returns, your allocation.

If your target was 40 per cent Australian equities, 25 per cent global equities, 20 per cent fixed income, and 15 per cent cash two years ago, what is it now?

If market movements have drifted you significantly off target, a disciplined rebalance to target is reasonable. That is not performance chasing. It is maintenance.

If you have cash to invest and want more global exposure, a regular contribution into the plethora of global ETFs could be an option.

The post Why US stocks have hit record highs while ASX shares have barely risen in 2026 appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in BHP Group and Vanguard Msci Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, CSL, Meta Platforms, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool Australia has recommended Alphabet, Amazon, BHP Group, CSL, Meta Platforms, Microsoft, Nvidia, Vanguard Msci Index International Shares ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are searching for some new investment options, then it could pay to listen to what the team at Morgans is saying about the three in this article.

Does it rate them as buys, holds, or sells? Let’s find out:

Beach Energy Ltd (ASX: BPT)

Morgans hasn’t been impressed with this energy producer’s operational performance. And, unfortunately, it believes the trend will continue and suspects that it could fall short of guidance in FY 2027.

As a result, it recently downgraded Beach Energy shares to a sell rating with a reduced price target of 81 cents. This compares to its current share price of 85 cents. It said:

We mark-to-market our second half estimates for weaker spot gas prices, while also trimming our Waitsia output forecasts for FY26-28 on continuing struggles. After downgrading our Q4 estimates for daily production rates, we see potential for BPT to fall just short of its FY27 group production guidance.

While BPT’s share price has already been under pressure, its earnings outlook has declined at a faster rate, with its forward EV/EBITDA actually rising. We downgrade our recommendation to Sell (from Hold) with a revised target price of A$0.81 (was A$1.10).

Flight Centre Travel Group Ltd (ASX: FLT)

While this travel agent recently downgraded its earnings guidance, Morgans has been far more forgiving.

It appears to believe that the worst is now behind the company and that a sharp rebound in earnings and its valuation could be on the cards soon.

This has seen Morgans put a buy rating and $14.80 price target on its shares. This is meaningfully higher than the current Flight Centre share price of $11.99. It commented:

Given recent downgrades from other travel industry peers due to the conflict in the Middle East, FLT’s downgrade wasn’t a surprise. Given its balance sheet strength and depressed share price, a new up to A$200m share buyback was announced. We have made only minor changes to our forecasts given FLT’s guidance was broadly in line with our previous forecast.

While a peace agreement and eased travel restrictions are positive, we think 1H27 will still be challenging. We forecast a strong recovery in 2H27. If it wasn’t for this conflict, FLT would have had a great year given its results for the first nine months were strong. We are buyers of FLT because when operating conditions ultimately improve, both its earnings and share price will be materially higher.

Judo Capital Holdings Ltd (ASX: JDO)

Another ASX share the broker is sticking with after an earnings guidance downgrade is small business lender Judo Capital.

It thinks the selling has been overdone and has retained its buy rating with a reduced price target of $1.47. This compares to the current Judo Capital share price of 88 cents. It said:

JDO downgraded its FY26 PBT guidance by c.8% at the mid-point. Even more disappointing was first-time FY27 PBT guidance which was c.16% below expectations at the mid-point. The share price drawdown was vicious (particularly considering the decline that had already occurred since February).

While the earnings growth outlook has moderated, we still forecast c.30% EPS growth across both FY26 and FY27 with the stock now trading on a c.6.8x PER (FY27F) and 0.6x P:BV (end-FY26). A significant risk premium or probability of failure has been priced into the stock. BUY.

The post Buy, hold, sell: Beach Energy, Flight Centre, and Judo Capital shares appeared first on The Motley Fool Australia.

More reading

• Brokers name 3 ASX shares to buy right now
• 6 ASX shares with upgraded ratings from experts this week
• Why Beach Energy, Ioneer, Solstice Minerals, and Transurban shares are pushing higher today
• Why 4DMedical, Centuria Capital, Judo Capital, and Worley shares are dropping today
• Why DroneShield, WiseTech and Judo shares are leading the ASX 200 lower this week

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