Category: Stock Market

Looking for a growth share or maybe two to buy? If you are, you may want to look at the two listed below.

Here’s why these ASX growth shares are rated highly right now:

Altium Limited (ASX: ALU)

The first ASX growth share for investors to look at is Altium.

Altium is a software company that focuses on electronics design systems for 3D PCB design and embedded system development.

Its products are found everywhere from world leading electronic design teams to the grassroots electronic design community. The former includes the likes of BAE Systems, Dell, Microsoft, NASA, and Tesla.

The good news is that despite being a leader in the industry, management isn’t resting on its laurels and is targeting strong subscription and revenue growth in the coming years. In respect to the latter, Altium is aiming to achieve US$500 million in revenue by 2026. This will be more than double FY 2022’s revenue of US$220.8 million.

Jefferies is a fan of the company. It currently has a buy rating and $38.13 price target on its shares.

Xero Limited (ASX: XRO)

Another ASX growth that has been named as a buy is Xero.

Xero is a global small business platform which provides its 3.3 million global subscribers with a core accounting solution, as well as payroll, workforce management, expenses and projects solutions. In addition, Xero provides access to financial services, an ecosystem of more than 1,000 connected apps, and more than 300 connections to banks and other financial institutions.

The good news for investors is that Goldman Sachs highlights that even with 3.3 million subscribers, Xero still only scratching at the surface of its global market opportunity of ~45 million+ subscribers. It is partly because of this “compelling global growth story” that Xero is the broker’s “preferred large cap technology name in ANZ.”

Last week, Goldman Sachs reiterated its buy rating on Xero’s shares with a $112.00 price target.

The post Analysts name the ASX growth shares to buy appeared first on The Motley Fool Australia.

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More reading

• US$10 billion was just wiped from the value of Atlassian. How are ASX 200 tech shares responding?
• What’s the outlook for the Xero share price in November
• How are ASX 200 tech shares faring after the overnight NASDAQ plunge?
• Top ASX shares to buy in November 2022
• Analysts name 2 ASX growth shares to buy next 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 positions in and has recommended Altium and Xero. The Motley Fool Australia has positions in and has recommended Xero. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

If exchange-traded funds (ETFs) like the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) or the SPDR Dow Jones Industrial Average ETF Trust (NYSEMKT: DIA) just aren’t your thing as an investor, you’re not alone. Putting your money into individual stocks is considerably more exciting, as each one offers you the chance to plug into a particular company’s growth story. Conversely, ETFs are just big baskets of equities bundled into logical groupings, and their results can be weighed down by their laggards as much as they’re lifted by their leaders.  

Don’t assume, though, that this lack of excitement means they’re destined to be subpar performers. Exchange-traded funds generally perform just as well as most portfolios of hand-picked stocks do — if not better — and are just as capable of turning your consistent stream of moderate investments into a million-dollar retirement stash.  

In fact, ETFs may actually be better suited for the task of retirement investing than individual stocks are.

The broad market is bullish enough

Most investors inherently understand that ETFs such as the aforementioned SPDR S&P 500 ETF Trust and the SPDR Dow Jones Industrial Average ETF Trust reflect the performances of the S&P 500 (SNPINDEX: ^GSPC) and Dow Jones Industrial Average (DJINDICES: ^DJI), respectively. For better or worse, they’re meant to match the performance of the broad market rather than beat it.

What you may not fully appreciate, however, is just how well the broad market performs over time. Even after this year’s bear market sell-off, the S&P 500 is 50% higher than where it was five years ago, and is up by more than 180% over the past 10 years. Over the past couple of decades, it’s up more than 300%.

Those results are in line with the market’s long-term averages. When factoring in reinvested dividends, the S&P 500’s average compound annual return for the past 100 years stands just above 10%. Some years are better, and some are worse. Some years are even losers. Given enough time, though, a well-diversified portfolio of stocks can reasonably be expected to gain on the order of 10% per year.            

In practical terms, this means that if you make moderate-sized annual investments of $5,000 into an S&P 500 fund within a tax-deferred account, your balance should be about $1 million after 31 years. While it could be tougher in some years than others to scrape together that $5,000, even for those living on average incomes, becoming a millionaire by the time you retire is certainly possible.

This leads to an obvious question: If booking “market average” results can do that, wouldn’t chasing after the market’s best “story stocks” offer you an even easier shot at building an even bigger fortune? Maybe. But, the data says don’t count on it.

Stock picking is just plain hard to do well

For the record, the majority of professional stock pickers do not consistently beat the market. Most of their actively managed portfolios produce returns below those of benchmarks like the S&P 500, in fact.

Standard & Poor’s keeps tabs on the performance of each and every mutual fund available to U.S. investors, and publishes updated information on their results every few months. Like every other update thus far, the one posted in September — for results through June — indicates that most large-cap funds failed to beat the S&P 500 over the past 12 months. Specifically, more than 55% of large-cap funds trailed the index.

So 45% did outperform it, which is … not terrible. But that factoid requires a major footnote. The fund industry as a whole fared relatively better than usual through the first half of the year — most likely because the market suffered losses that were largely expected by the pros, who shifted some assets out of stocks in anticipation. Not being fully invested in stocks helped their comparative performances. Looking back at the past five years reveals more typical results: More than 84% of U.S. funds underperformed the S&P 500. And over the past 10 years, 90% of mutual funds sold to investors in the United States trailed the S&P 500’s net gain.

Those lagging performances are largely the result of fund managers’ efforts to beat the market.

It’s not just the mainstream mutual fund industry with a performance problem either. Most hedge funds lag the overall market as well. In the same vein, the average short-term “day trader” also regularly misfires. While performance estimates regarding traders in this category should be taken with a grain of salt in light of how little data is actually collected from them, it’s believed that between 70% and 90% of retail, non-buy-and-hold stock speculators end up losing money rather than making it.

All of these poor performances ultimately reflect how unlikely it is that individuals will manage to pick strategies that consistently outperform the market. And when you’re trying to beat the averages by guessing what is essentially unguessable, it’s easy to slowly nickel and dime your portfolio to death.

When investing in ETFs, however, people typically do so with plans to hold those stakes through the good times and bad, and add to them regularly to take advantage of dollar-cost averaging. This makes ETFs well-suited to a strategy that largely relieves you of two hazardous temptations — the urge to lock in short-term gains by selling, and the urge to hold off on putting money into the market until there’s a major low. By dodging those market-timing snares, you avoid playing the version of the investing game that even most professionals lose.

You can still beat the market with ETFs

If, after reading all that, you’re still interested in hunting for investment options that at least give you a fighting chance at outperforming the S&P 500 — no problem. While the SPDR S&P 500 ETF Trust is a go-to pick as a low-fee foundational portfolio holding, there are many other exchange-traded funds that feature different approaches. For example, mid-cap funds like the iShares Core S&P Mid-Cap ETF (NYSEMKT: IJH) and the Technology Select Sector SPDR Fund (NYSEMKT: XLK) both have long histories of S&P 500-beating performance. Both are also easy to hold for the long haul, even during periods when things get rocky.

The bottom line is investing in ETFs can turn you into a millionaire just as readily as buying individual stocks can. Better yet, they can give you a path to that outcome that doesn’t require the sort of active investing that often ends up doing more harm than good.   

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Can you actually retire a millionaire with ETFs alone? appeared first on The Motley Fool Australia.

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More reading

• Analysts name the ASX growth shares to buy
• Top brokers name 3 ASX shares to buy next week
• Why did the A2 Milk share price go backwards in October?
• Morgans names 2 more of the best ASX shares to buy in November
• Should investors buy the dip on Amazon stock?

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.

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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Goodman Group (ASX: GMG)

According to a note out of Citi, its analysts have retained their buy rating and $23.50 price target on this industrial property company’s shares. Citi was pleased with Goodman’s first quarter update and believes it had more positives than negatives. The only disappointment was that its guidance was unchanged. Though, the broker believes there is still potential for an upgrade given its positive start to the year. The Goodman share price closed the week at $16.83.

Macquarie Group Ltd (ASX: MQG)

A note out of Morgans reveals that its analysts have retained their add rating on this investment bank’s shares with a slightly reduced price target of $214.30. Morgans was pleased with Macquarie’s performance during the first half of FY 2023 and notes that its profits were stronger than it expected. In light of this, the broker remains positive on Macquarie, particularly given the quality of its franchise and its exposure to structural growth areas. The Macquarie share price was fetching $170.37 at Friday’s close.

Woolworths Group Ltd (ASX: WOW)

Analysts at Goldman Sachs have retained their conviction buy rating on this retail giant’s shares with a trimmed price target of $41.70. While Goldman was a touch disappointed with the performance of its supermarket businesses during the first quarter, it saw enough to remain positive. Overall, the broker remains confident that Woolworths is the superior operator within Australian supermarkets and well-placed for growth in the coming years. The Woolworths share price ended the week at $32.56.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• Why I’m seriously considering investing $10,000 in these ASX 200 shares
• Brokers name 3 ASX shares to buy today
• Morgans names 3 of the best ASX 200 shares to buy in November
• Would you like to bag the latest Macquarie dividend? Read this
• 5 big ASX announcements making news 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 Macquarie Group Limited. 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 A2 Milk Company Ltd (ASX: A2M) share price didn’t join in the broader market rally in October.

Shares in the fresh milk and infant formula company closed out September trading for $5.40 and finished October swapping hands for $5.26 apiece.

That puts the A2 Milk shares down 2.6% over the month just past, while the S&P/ASX 200 Index (ASX: XJO) managed to gain 6%.

Here’s what happened.

What happened in October?

The A2 Milk share price had a solid start to the month.

On 3 October, the company reported it had renewed its import and distribution arrangements with China State Farm Agribusiness Holding Shanghai (CSFA). The renewed agreement runs for a period of five years.

A2 Milk has partnered with CSFA since 2013 to import its China product labels.

The A2 Milk share price gained 5.1% the following day, 4 October.

But shares edged lower or traded flat over the following days, despite A2 Milk commencing its share buyback on 5 October.

Splashing out NZ$150 million (AU$163 million), the company intends to buy back some 37.2 million shares over a 12-month period at market prices.

However, as my Fool colleague James Mickleboro noted at the time, the commencement day of the buyback doesn’t mean the company is obliged to buy shares. Indeed, it can “suspend without notice or vary or terminate the buyback program at any time”.

A2 Milk shares dropped another 1% on 25 October. That was when the company announced the pending departure of its chief operations officer, Shareef Khan. Khan started with the company in 2012.

How has the A2 Milk share price performed in 2022?

While the A2 Milk share price underperformed the benchmark in October, the company is still outperforming over the calendar year.

Since the opening bell on 4 January, A2 Milk shares are down 3% compared to a 9% loss posted by the ASX 200.

The post Why did the A2 Milk share price go backwards in October? appeared first on The Motley Fool Australia.

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More reading

• Brokers name 3 ASX shares to buy today
• Why A2 Milk, Bravura, Magellan, and Pendal shares are dropping
• Here are the top 10 ASX 200 shares today
• Why A2 Milk, New Hope, Perpetual, and Talga shares are charging higher
• It’s not all bad news for ASX All Ords shares today. Here are some big winners

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 recommended A2 Milk. 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 team at Morgans has been busy again picking out its best ASX share ideas for the month of November.

These are the shares that the broker thinks offer the highest risk-adjusted returns over a 12-month timeframe and are supported by a higher-than-average level of confidence.

The first three shares we looked at can be found here. Read on for the next two:

Santos Ltd (ASX: STO)

Morgans believes that Santos could be a top option for investors looking at the energy sector. Its analysts like the energy producer due to its strong growth prospects and diversified earnings base. The broker said:

The resilience of STO’s growth profile and diversified earnings base see it well placed to outperform against a backdrop of a broader sector recovery. While pre-FEED, we see Dorado as likely to provide attractive growth for STO, while its recent acquisition increasing its stake in Darwin LNG has increased our confidence in Barossa’s development.

Morgans currently has an add rating and $9.40 price target on Santos’ shares.

Westpac Banking Corp (ASX: WBC)

This banking giant has been added to the broker’s best ideas list this month. The broker likes Westpac due to its return on equity improvement potential, cost reduction targets, and attractive dividend yields. It explained:

We view WBC as having the greatest potential for return on equity improvement amongst the major banks if its business transformation initiatives prove successful. The sources of this improvement include improved loan origination and processing capability, cost reductions (including from divestments and cost-out), rapid leverage to higher rates environment, and reduced regulatory credit risk intensity of non-home loan book. Yield including franking is attractive for income-oriented investors, while the ROE improvement should deliver share price growth.

Morgans has an add rating and $26.68 price target on Westpac’s shares.

The post Morgans names 2 more of the best ASX shares to buy in November appeared first on The Motley Fool Australia.

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More reading

• Own Westpac shares? What to expect from next week’s FY22 results
• Is Bendigo Bank the best bet for dividends out of all the ASX 200 bank shares?
• The Westpac share price soared 17% in October, what’s next?
• 5 things to watch on the ASX 200 on Thursday
• Up 14% in a month, why the ANZ share price can keep delivering: Citi

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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 Westpac Banking Corporation. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Amazon (NASDAQ: AMZN) has delivered more than packages over the years — it’s delivered investors huge long-term gains. The e-commerce giant has increased more than 700% over the past decade, for example.

That’s all of the bad news. Now let’s turn to the good news. The first thing to remember is today’s environment of rising inflation and economic woes is temporary. The situation is difficult for Amazon today, but the company has the resources to weather the storm.

Amazon’s revenue has continued to rise throughout these tough times. In the third quarter, net sales climbed 15%. And though AWS revenue growth has slowed, AWS still is increasing revenue and operating income in the double digits.

A stronger cost structure

The company also has made progress on cutting costs across its fulfillment network — and says it’s working on a “stronger cost structure”, which should be a big plus over the long term. All of these efforts may buoy Amazon until the economic situation improves.

It’s also important to remember Amazon is a leader in two growth businesses. E-commerce and cloud computing services are forecast to grow in the double digits over the coming years. Amazon surely will benefit from this.

The company’s efforts to attract more and more Prime subscription-service members are working. Prime’s recent NFL Thursday Night Football premiere sparked the three biggest hours of U.S. Prime sign-ups ever. And AWS continues to expand its infrastructure globally.

Now let’s look at Amazon’s share price. The stock is trading at less than two times sales. This is its lowest by that measure in about six years. At the same time, the company continues to grow its Prime subscription service and e-commerce revenue. And AWS remains a key strength. Historically, it’s driven Amazon’s total operating income.

As mentioned above, Amazon has what it takes to make it through today’s rough patches — and thrive in the long term. That’s why, at today’s level, Amazon shares look like a deal — and one that investors should consider buying on any dips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Should investors buy the dip on Amazon stock? appeared first on The Motley Fool Australia.

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• Amazon stock just tanked. Could this be a canary in the coal mine for ASX 200 retail shares?

 Adria Cimino has positions in Amazon. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon. The Motley Fool Australia has recommended Amazon. 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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Telstra Corporation Ltd (ASX: TLS) shares have had an interesting month. The company has just completed a major corporate restructuring which saw Telstra shares briefly change their ticker code from TLS to TLSDA. Thankfully for traditionalists, all is right with the world again now Telstra is back to the good old TLS.

But investors have historically bought Telstra shares with the expectation of consistent and high dividend income. The company has even increased its annual dividend payments this year, the first time investors have seen a shareholder pay rise in six years.

So with all of this in mind, what kind of dividend income can an investor expect today from the Telstra share price?

What is the current yield on Telstra shares?

Well, Telstra’s last two dividend payments were the April interim dividend worth 8 cents per share, and the final dividend worth 8.5 cents per share that was paid out in September.

That last dividend contained the pay rise that investors craved for so long. As is typical with Telstra, both dividends came with full franking credits.

So given the Telstra share price has closed at $3.90 on Friday (down 1.02%), these two dividends give the telco a trailing dividend yield of 4.23%. That grosses up to an even more impressive 6.04% if we include the value of those full franking credits.

That means that if an investor bought $100,000 worth of Telstra today, they could expect an annual income of $4,230, plus franking, from their new shares.

As we discussed earlier this week, that dividend yield is not the highest Telstra shares have ever traded at. At one point in this telco’s history, its trailing dividend yield reached as high as 10%. But it is still a pretty good return on one’s capital today by ASX standards.

The post What is the current dividend yield on Telstra shares? appeared first on The Motley Fool Australia.

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More reading

• Morgans names 3 of the best ASX 200 shares to buy in November
• Here are the top 10 ASX 200 shares today
• How did the Telstra share price fare over October?
• Telstra ASX code roadmap: what it was, what it is, and what it will be
• Top ASX shares to buy in November 2022

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. 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 positions in and has recommended Telstra Corporation Limited. 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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While I’m not completely convinced that the market has bottomed just yet, now does seem like a good time to start plotting some investments.

Listed below are two ASX 200 shares that I am seriously considering investing $10,000 in soon. Here’s why I think they could be great long-term investments:

CSL Limited (ASX: CSL)

CSL is arguably one of the highest-quality companies that Australia has ever produced. So, when you’re offered the chance to purchase this ASX 200 share at a 14% discount to its 52-week high, it’s hard to say no.

Especially given that plasma collections have improved markedly since the height of the pandemic. Plasma is a key ingredient in CSL’s therapies and had been harder to collect over the last couple of years, which weighed on costs. However, collection levels are now back to normal, which bodes well for CSL’s margins. In addition, the launch of new plasma collection technology looks set to boost yields.

And let’s not forget the acquisition of Vifor Pharma, which has opened the door to new lucrative markets, and CSL’s US$1.1 billion annual spend on research and development activities.

The latter ensures that CSL’s product pipeline is filled to the brim with potential therapies that could provide its sales with a material boost in the coming years.

For example, the company’s Clazakizumab therapy is undergoing phase three trials for the treatment of chronic active antibody mediated rejection in kidney transplant recipients. If successful, Goldman Sachs sees potential for peak sales of US$5.4 billion from the therapy.

All in all, in my opinion, the future looks as bright as ever for CSL.

Goodman Group (ASX: GMG)

Another ASX 200 share that I am considering is integrated property company Goodman Group. Its shares have fared even worse than CSL’s and are trading around 37% lower than their 52-week high.

Investors have been selling Goodman and other property companies this year amid rising rates and concerns over economic growth.

The good news is that last week Goodman released its first-quarter update and stated that it was in “a strong position to withstand and respond to the impacts of a slowing economy in different parts of the world”.

This is “due to the demand for our strategic locations, quality of our assets, [and] strength of our development book.” The latter comprises $13.8 billion of development work in progress across 85 projects.

What Goodman said certainly appears true based on its quarterly performance. The company recorded solid rental growth, a 99% overall occupancy rate, and 100% occupancy on new developments.

In light of this, its significant share price weakness, and guidance for 11% earnings growth, I believe its shares are great value at around 19x forward earnings.

The post Why I’m seriously considering investing $10,000 in these ASX 200 shares appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• What’s happening with the CSL share price today?
• Here’s why brokers rate these blue chip ASX 200 shares as buys
• Why Amcor, Australian Strategic Materials, Goodman, and Pilbara Minerals are dropping
• Top brokers name 3 ASX shares to buy today

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 CSL 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.

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Andrew Forrest was in the headlines multiple times this week. But, he ended the week richer after a pleasing performance by the Fortescue Metals Group Limited (ASX: FMG) share price. Shares of the ASX mining share increased by 7% over the week.

That rise compares to an increase of around 0.57% from the S&P/ASX 200 Index (ASX: XJO).

So, let’s look at what happened this week.

Not enough opportunities for Aboriginals

According to reporting by The Age, former Aboriginal elder of the year and Nyamal woman Aunty Doris Mitchell-Eaton spoke at a ceremony for Iron Bridge, the latest project that Fortescue is involved with.

She said that when traditional owners and Forrest first signed an agreement to mine the land, they were assured that Nyamal people would be employed. However, they have since been told they “didn’t have the capability”, Mitchell-Eaton said. She added:

Give us the opportunity to build that capability, to mine our country. I’m standing here as a proud Nyamal, it’s hurt my feelings to see every people coming in here digging in our country and we haven’t got an opportunity.

Give us this good opportunity, we want to build this capability. That’s the word I learned from FMG because FMG knocked us back with Nyamal Mining.

In response, Forrest said that Indigenous people were being “held back by even the best-intentioned bureaucrats”.

Forrest pointed out that the mining sector was the biggest employer of Aboriginal people in the country and was responsible for advanced, highly paid work for Aboriginal people. He said: “When we take our welfare foot off their necks, they succeed as well as anybody else.”

The Age also reported Forrest as saying Iron Bridge had included $68 million in agreements to Indigenous people and for Indigenous work since the project began. FMG said it had awarded $285 million worth of work to Nyamal businesses.

Fortescue shares in its mining successes

While the ASX mining share may have copped some criticism from an Aboriginal elder, it’s worth noting the latest Australian Taxation Office corporate tax transparency report showed that Australia’s biggest miners contributed almost a third of the entire corporate income tax take in the last financial year. That’s according to reporting by the Australian Financial Review.

Those ‘biggest miners’ include Fortescue, as well as BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and companies controlled by Gina Rinehart.

More staff moving on

Earlier this week, it was reported by The Australian that another senior executive at Fortescue had left the business. The company’s most senior human resources manager, Linda O’Farrell, has reportedly departed this time.

The newspaper noted that only three of the 11 members of Fortescue’s executive leadership team listed in its 2021 annual report remained with the business.

Cost blowouts and scheduling delays at Fortescue’s Iron Bridge project led to the departure of chief operating officer Greg Lilleyman and project director Don Hyma.

A restructuring of its executive incentive system saw $50 million removed from the expected bonus pool. This reportedly saw more departures.

Fortescue shares’ success is likely partly dependent on its management team.

Hotel deal booked in?

Finally, in the week that was, Andrew Forrest is reportedly negotiating a deal to buy the yet-to-be-built Waldorf Astoria hotel, which will front Sydney’s Circular Quay.

The deal could be worth up to $572 million.

According to The Australian, the deal is being negotiated at a rate of “up to $2.6 million for each of the 220 rooms” in the six-star hotel, which is being developed by Lendlease Group (ASX: LLC) as part of the $3 billion One Circular Quay development.

It was reported that while negotiations continue, it’s dependent on the final price.

The post Hotels, hurt feelings, and HR hassles, but Fortescue’s biggest shareholder still got richer this week appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group Limited. 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.

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It’s been a tough year for most asset classes in 2022. Shares, property, bonds… you name it, it’s probably down. Unfortunately, this also extends to gold and by extension, ASX gold shares.

At the start of this year, gold was priced at around US$1,830 an ounce.

Today, it is trading at US$1,643.

This obviously hasn’t done the ASX miners that dig up the yellow metal any favours. Take the S&P/ASX 200 Index (ASX: XJO)’s largest gold miner, Newcrest Mining Ltd (ASX: NCM). Year to date, the Newcrest Mining share price has fallen by a depressing 29%.

That is up the extreme end. But you’d still be hard-pressed to find a gold miner on the ASX that has glittered in 2022. Gold Road Resources Ltd (ASX: GOR) shares are down 16% year to date. The Northern Star Resources Ltd (ASX: NST) share price has lost around 7%.

So what’s gone so wrong for gold? Isn’t this precious metal supposed to be a hedge against inflation, market volatility and general uncertainty, all of which 2022 has delivered in spades?

Well, according to an article in The Australian today, a strong US dollar and rising interest rates are mostly to blame.

Gold’s appeal falls when interest rates rise

When interest rates rise, it reduces the appeal of holding gold as an investment since holding bullion gives off no yield. As such, many investors would rather invest in dividend-paying shares or term deposits. That’s given the cash flow yield one can enjoy when rates are rising.

The US dollar also has a big influence. The yellow metal is usually priced in US dollars for international transactions. This means that when the dollar rises in value against other currencies, the value of gold in US dollar terms declines.

And since we have seen a surging US dollar over the year thus far, this is definitely a factor at play as well.

So are there better times ahead for gold? Well, the report quotes Phil Kosmala, managing partner at investment consulting firm Taiber Kosmala.

Kosmala is reportedly waiting for signs that the US economy is heading for a recession before he buys gold. This is because these periods are when the precious metal’s status as a safe haven really shines through, according to Kosmala.

He is also waiting to see the US dollar retreat from its recent highs and for interest rates to start falling:

We’d like to see all three of those for us to start looking more favourably upon gold.

The post Is there any good news in sight for the gold price and ASX 200 gold shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Newcrest Mining Limited. 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.

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