Category: Stock Market

If you’re searching for dividend shares to add to your income portfolio, then the two listed below could be top options.

Analysts have rated these dividend shares as buys and are forecasting attractive yields in the coming years. Here’s what you need to know about these dividends shares:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to consider is Accent. It is the owner of a growing portfolio of footwear focused store brands including Athlete’s Foot, HYPEDC, Pivot, Platypus, Sneaker Lab, and Stylerunner.

It has unfortunately been a tough year for Accent due to lockdowns and now rising living costs and softer consumer spending. This has seen investors sell down the company’s shares, leaving them trading close to their 52-week low.

The team at Bell Potter appears to see this as a buying opportunity. Its analysts believe investors should focus on the long term due to its “dominant market share in the Australian footwear retailing industry and growth outlook in the youth focused sports apparel.”

The broker currently has a buy rating and $2.20 price target on the company’s shares.

In respect to dividends, Bell Potter has pencilled in a fully franked dividend of 5.8 cents per share in FY 2022 and then 10.7 cents per share in FY 2023. Based on the current Accent share price of $1.39, this will mean yields of 4.2% and 7.7%, respectively.

Wesfarmers Ltd (ASX: WES)

Another ASX dividend share that could be in the buy zone is this conglomerate.

Wesfarmers is the company behind a range of businesses such as Bunnings, Catch, Covalent Lithium, Kmart, Officeworks, and Priceline.

Although inflation and rising living costs are likely to be putting pressure on its retail businesses, the team at Morgans remains very positive. In fact, its analysts are optimistic the company will be able to navigate the tough retail environment due to its value offering. The broker thinks “Kmart is well-placed to benefit with the average price of an item at around $6-7.”

In light of this, its analysts have put an add rating and $58.40 price target on its shares.

As for dividends, Morgans is forecasting fully franked dividends per share of $1.65 in FY 2022 and $1.81 in FY 2023. Based on the current Wesfarmers share price of $45.51, this will mean yields of 3.6% and 4%, respectively.

The post Why analysts say these excellent ASX dividend shares are buys appeared first on The Motley Fool Australia.

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More reading

• How much have Wesfarmers shares paid in dividends over the last 5 years?
• Broker names 2 more blue chip ASX 200 shares to buy in July
• What’s the outlook for the Wesfarmers share price over the rest of 2022?
• Does the FY23 outlook make ASX retail shares look like bargains?
• 2 top ASX dividend shares that analysts rate as buys

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 positions in and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Accent Group. 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 AVZ Minerals Ltd (ASX: AVZ) share price was scheduled to return to trade on Friday after being suspended for over two months.

However, once again, the lithium developer has requested that its shares remain offline.

What’s going on with the AVZ share price?

The AVZ share price has been out of action since 9 May while it sorts out an ownership dispute relating to the Manono Lithium Project in the Democratic Republic of the Congo.

It is battling a proceeding relating to what it describes as the “meritless claim that La Congolaise D’Exploitation Miniere SA (Cominière) has transferred a 15% interest in Dathcom Mining SA (Dathcom) to Jin Cheng.” Dathcom is the owner of the mining licence for the Manono Lithium Project.

There are concerns that AVZ could be left owning 60% of Dathcom if things don’t go to plan. But that’s before the proposed sale of a 24% stake to Suzhou CATH Energy Technologies. If that also goes ahead, the company could end up with just a 36% interest in Dathcom and the Manono Lithium Project.

What are they fighting over?

The Manono Lithium Project is located 500km north of Lubumbashi in the south of the Democratic Republic of Congo. It is home to the Roche Dure Mineral Resource, which is believed to be one of the largest undeveloped hard rock lithium deposits in the world.

Despite being a long way from any decent infrastructure, the company believes it is strategically positioned as a clean, sustainable source of lithium. Management also believes it could significantly contribute to the green energy transition and feed the global lithium-ion battery value chain.

Once operational, initial production is expected to be 700,000 tonnes per annum of lithium spodumene concentrate with 6% lithium oxide content (SC6) and 46,000 tonnes per annum of primary lithium sulphate.

As a comparison, Pilbara Minerals Ltd (ASX: PLS) is targeting production of 373,000 to 377,000 dmt of spodumene concentrate in FY 2022.

What’s the latest?

This morning the company requested that its suspension continue until 29 July. It commented:

The Company regrets that the voluntary suspension period has lasted longer than was intended. During this period, the Company has been actively engaged with the highest levels of the Government with respect to the grant of the Mining Licence and an update regarding its exploration rights for the Manono Project.

Whilst the Company remains confident of a positive outcome, it will be necessary to continue the period of voluntary suspension as the subject of the initial trading halt request remains incomplete.

Drilling resumes

In other news, AVZ revealed that diamond drilling is recommencing at the Manono Project with the objective of significantly increasing lithium resources and reserves at Roche Dure.

AVZ’s Managing Director, Nigel Ferguson, said:

Given the imperatives around sourcing battery minerals for the global green-energy transition and in line with our February 2022 announcement of funding of a drilling program as part of our Early Works Program, I am pleased to confirm that drilling has recommenced at Roche Dure.

Drilling at the north-east end of the known orebody, in areas previously inaccessible due to surface water, is aimed at significantly increasing the known lithium-rich ore resources in this area. This will underpin our future plans to extend the stated mine life at Manono, should this drilling campaign prove to be successful.

The post What’s going on with the AVZ share price? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Why did the AVZ share price thump the market in FY22?
• Guess which 2 ASX shares were the best and worst All Ordinaries performers of FY22
• The AVZ Minerals share price went nowhere in June. Here’s why
• ASX 200 midday update: Regis Resources jumps, BHP and Rio Tinto drop

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 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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Despite falling 16.5% so far in 2022, the JB Hi-Fi Limited (ASX: JBH) share price has gained modest value over the past five years — up by almost 65%.

The retailer’s shares hit an all-time high of $56.85 on 30 March but have since tumbled due to extreme market volatility and negative sentiment.

Investors have expressed their concerns about a possible recession due to high inflation levels and rate hikes by the Reserve Bank.

For context, the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) is down by 21% this year.

Nevertheless, while the JB Hi-Fi share price trades near 52-week lows, have the dividends been worthwhile over the long term?

JB Hi-Fi dividend history

Regardless of the company’s recent share price weakness, the JB Hi-Fi board has continued to increase its dividends to shareholders.

Below, we take a look at the past five years’ worth of dividends from JB Hi-Fi.

• September 2017 – 46 cents (final)

• March 2018 – 86 cents (interim)

• September 2018 – 46 cents (final)

• March 2019 – 91 cents (interim)

• September 2019 – 51 cents (final)

• March 2020 – 99 cents (interim)

• September 2020 – 90 cents (final)

• March 2021 – $1.80 (interim)

• September 2021 – $1.07 (final)

• March 2022 – $1.63 (interim).

Calculating the above JB Hi-Fi dividends since 2017 gives us a total figure of $9.59 for every share owned. That’s almost a quarter of the value of JB Hi-Fi’s last traded share price – $40.77.

Even without factoring in the 63.7% capital gain delivered to investors since 2017, the JB Hi-Fi dividend has shown its worth – particularly since 2021.

JB Hi-Fi share price snapshot

Over the past 12 months, JB Hi-Fi shares have lost 15% following tough macroenvironmental conditions.

JB Hi-Fi has a dividend yield of 6.62% which is one of the highest yields for an ASX 200 company.

In terms of market capitalisation, the company is valued at approximately $4.45 billion.

The post Has the JB Hi-Fi dividend been worthwhile in the past 5 years? appeared first on The Motley Fool Australia.

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More reading

• Does the FY23 outlook make ASX retail shares look like bargains?
• Why did the JB Hi-Fi share price fall more than 20% in FY22?
• Down 16% in June: What put the JB Hi-Fi share price on sale?
• Why are ASX 200 retail shares getting bought up today?
• How did ASX 200 retail shares perform in June?

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 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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The Rio Tinto Limited (ASX: RIO) share price will be on watch this morning.

This follows the release of the mining giant’s second-quarter production update.

What did Rio Tinto report?

For the three months ended 30 June, Rio Tinto reported iron ore shipments of 79.9Mt. This was up 5% over the prior corresponding period and 12% quarter on quarter.

The good news for the Rio Tinto share price is that this was ahead of expectations. For example, Goldman Sachs was expecting quarterly iron ore shipments of 78.7Mt and the consensus estimate was for 79.3Mt.

This took Rio Tinto’s first-half iron shipments to 151.4Mt, which is down 2% over the prior corresponding period. This was driven by skilled labour supply constraints, COVID-19 disruptions, first quarter delays of mine replacement projects, and significantly higher than average rainfall in May.

What else?

Rio Tinto also reported a 4% quarter on quarter increase in bauxite production to 14.1Mt, a 1% lift in mined copper production to 126kt, and a 1% decline in aluminium production to 731kt.

This is a mixed result compared to Goldman’s forecast of 13.8Mt, 137kt, and 755kt, respectively.

Guidance

Despite warning that it is currently experiencing elevated levels of unplanned absences at its Pilbara operations due to COVID-19 case spikes in Western Australia, the mining giant has left its FY 2022 iron ore shipments guidance unchanged at 320Mt to 335Mt.

It has also left its bauxite production guidance unchanged at 54Mt to 57Mt and its copper production guidance unchanged at 500kt to 575kt.

However, it has been forced to downgrade its alumina production range to 7.6Mt to 7.8Mt (from 8Mt to 8.4Mt) and aluminium production by 0.1Mt to 3Mt to 3.1Mt.

Positively, the company’s Pilbara iron ore 2022 unit cost guidance of US$19.5 to US$21 per tonne remains unchanged. As does its copper C1 unit cost guidance of 130-150 US cents/lb.

Though, it has warned that higher rates of inflation have increased its closure liabilities and impacted its underlying earnings. In the first half, this resulted in increased charges of approximately US$400 million pre-tax within underlying earnings compared with the first half of 2021, including a US$300 million increase in amortisation of discount, with the remainder impacting underlying EBITDA.

Management commentary

Rio Tinto’s chief executive, Jakob Stausholm, appeared pleased with the quarter. He commented:

We strengthened our operational performance at a number of sites, which we will now replicate across the portfolio.

We made progress against our four objectives during the first half and we are determined to further strengthen Rio Tinto while investing to grow in the commodities needed for the energy transition, decarbonise our portfolio, be a partner and employer of choice, maintain our tight capital allocation and continue to pay attractive dividends.

The post Rio Tinto share price on watch after stronger than expected iron ore shipments appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Own Rio Tinto shares? The company’s leaning into demand for this high-value metal
• These ASX 200 mining shares are bolstering the market today
• Why did the Rio Tinto and BHP share price struggle today?
• Here’s the outlook for the Rio Tinto share price in FY23

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 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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What a rollercoaster it has been for the Zip Co Ltd (ASX: ZIP) share price.

After hitting a record high of $14.53 in February 2021, shares in the embattled buy now, pay later (BNPL) company are down big time.

Just last month, investors shook their heads in disbelief as the Zip share price hit a multi-year low of 43.5 cents. To put that into perspective, it’s a 95% loss from the same time last year.

Since then, the company’s shares have recovered some ground to finish at 54 cents at yesterday’s market close.

Investors appear to have liked the decision not to proceed with the Sezzle acquisition, with the Zip share price up 8% since the announcement on Tuesday.

Zip share price volatility amid market turmoil

Extreme volatility on the back of inflationary movements and rate hikes has put selling pressure on the Zip share price.

For context, the S&P/ASX 200 Financials Index (ASX: XFJ) has shed almost 10% in 2022 following the broader sell-off.

A perfect storm of the above macroenvironmental factors is causing havoc with investors running for the hills.

It appears there are particular concerns about Zip’s books and whether there is an upside for the BNPL industry.

In the company’s FY22 first-half results, management reported a staggering loss before tax of $214.2 million for the period.

This was despite revenue increasing by 89% to $302.2 million, underpinned by growth in transaction volumes.

However, the spotlight on Zip’s bad debts and credit losses seems to be weighing down investor sentiment.

This metric stood at $148.3 million compared to the $29.5 million written off in H1 FY21 – a 402.7% increase.

Cash on hand also dwindled by 19% to $266.8 million.

Whether or not management can turn around the company’s fortunes remains to be seen.

Some experts are anticipating that the BNPL sector will fall further this year as tighter regulation looms.

The Australian Government wants to treat BNPL products the same as other credit products.

If adopted, this would likely put a financial strain on Zip’s balance sheet as extra lending checks would need to be ticked off.

What do the brokers think?

Despite the current economic climate and possible regulation, some brokers believe the Zip share price is undervalued.

According to ANZ Share Investing, Morgans cut its price target by 32% to 86 cents apiece on the BNPL’s shares.

On the other hand, Jefferies had a more bearish outlook, massively chopping its rating on Zip by 62% to a share price target of 38 cents.

Factoring in the above, while Zip shares have slightly rebounded for now, further falls could be on the way. Especially if the government’s plan to close the loophole in the national credit code succeeds.

The post Has the Zip share price finally hit rock bottom? appeared first on The Motley Fool Australia.

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More reading

• Is the Zip share price going to take off?
• What’s the outlook for ASX BNPL shares in FY23?
• Sezzle shares plunge another 16%, now down 60% in a week
• ASX 200 midday update: ANZ confirms MYOB talks, energy shares fall
• Are falling BNPL shares pushing the ASX banks higher today?

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 ZIPCOLTD FPO. 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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The Adairs Ltd (ASX: ADH) share price could be an opportunity ripe for the picking, according to experts.

It has been a tough time for the ASX retail share which has lost more than 40% in value over 2022 to date.

However, one expert feels that the fall has been too hard and now the company is an opportunity.

There’s no way of truly knowing what is going to happen next on the share market unless you have a crystal ball. Mine isn’t working at the moment.

But, as investors, we have to decide whether opportunities are good value and worth pursuing, or not.

UBS is a broker that sees substantial upside for the Adairs share price over the next year.

Broker rating on the Adairs share price

UBS rates Adairs a buy with a share price target of $3.70. That implies a possible rise of over 60% if the broker ends up being right.

Why does the broker see so much potential growth? A key part of the investment thesis is the cheap price-to-earnings (P/E) ratio. That’s the multiple of earnings that the Adairs share price is valued at.

At the current Adairs share price, UBS thinks it’s valued at around eight times FY23 estimated earnings.

However, the broker does acknowledge that the wider economic impacts of rising inflation and interest rates could hurt Adairs’ revenue and profit. Profit margins may settle at a lower level.

But, not every expert is convinced. Morgans recently shifted its rating to hold, on expectations of a tough retail environment because Aussies will have less money to spend on the products that Adairs sells.

Even so, Morgans also thinks that Adairs has a low P/E valuation and it could pay a pretty large dividend. Morgans’ numbers put the Adairs share price at seven times FY23 estimated earnings with a potential grossed-up dividend yield of 11.3%.

What’s Adairs working on?

The Adairs share price could be influenced by some of the retailer’s business plans for FY23 and beyond.

They recently acquired the Focus on Furniture business, giving Adairs greater access to the bulky furniture category (an $8 billion market). It plans a store rollout, online growth, and category and range expansion.

For the Adairs brand, the company wants to grow its store count and upsize some stores, expand its membership numbers, and broaden its range.

With Mocka, the online furniture business, Adairs wants to increase brand awareness, grow its range, and add a physical presence.

In FY23, Adairs will be cycling against periods of FY22 when there were lockdowns.

What is next?

Unless the business reveals a trading update or something else before earnings season, the next major update should be the FY22 result and probably a trading update for the first few weeks of FY23.

Adairs share price snapshot

Over the past month, the Adairs share price has risen by 33%. This compares with an 0.93% rise in the S&P/ASX All Ordinaries Index (ASX: XAO).

The post Why the Adairs share price could be a bargain in FY23 appeared first on The Motley Fool Australia.

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More reading

• Does the FY23 outlook make ASX retail shares look like bargains?
• What were some of the key lessons for ASX investors in FY22?
• What caused the Adairs share price to halve in FY22?
• Why did the Adairs share price fall 18% in June?
• Best ASX shares to buy in July 2022

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 positions in and has recommended ADAIRS FPO. The Motley Fool Australia has positions in and has recommended ADAIRS FPO. 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 Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has dropped by around 15% since 30 May. It closed yesterday’s session down 2.23% to $21.93.

How are things looking for 2023?

The 2022 financial year has just finished for most businesses and individuals, however, ANZ has a different financial calendar that ends on 30 September.

While ANZ’s FY22 may not have finished, it could be a useful idea to think about what could happen in the short to medium term for the bank.

ANZ is one of the big four ASX banks alongside Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), and Westpac Banking Corp (ASX: WBC).

However, just because it’s a big four bank doesn’t mean that it can’t suffer sizeable share price falls and be impacted by the wider economic environment.

Let’s look at what could happen over the next year.

Acquisition talk 

In just the past few days, ANZ confirmed that it was in discussions with private equity group KKR about potentially buying the accounting software business MYOB. ANZ told the market that it hasn’t reached an agreement yet with KKR and there is no certainty it will proceed.

However, if it did it is possible that it could help ANZ’s business division by working more closely with business customers.

Another acquisition that ANZ is interested in is the banking division of Suncorp Group Ltd (ASX: SUN), according to reporting by the Australian Financial Review (AFR).

ANZ reportedly has a team talking to Suncorp about its banking division, which could potentially be put up for sale. The deal could add “scale at a time when it has struggled to catch up to its larger rivals.”

How much scale? It would add $60 billion in customer loans, with around 80% of that being mortgages. It would also geographically add more exposure for ANZ to the markets of Queensland and NSW.

What’s dragging on the ANZ share price?

ANZ and other banks have seen their share prices drop after the latest moves by the Reserve Bank of Australia (RBA) to increase interest rates.

It may be strange to see that the banks are suffering when lower interest rates were supposedly hurting their profitability.

As Macquarie and other brokers have pointed out, while higher interest rates should help the banks’ net interest margins (NIM), the problem is that if interest rates go too high too quickly, it could lead to rising arrears and bad debts, which would detract from profits.

What are the brokers‘ thoughts on the ANZ share price?

A price target indicates where a broker thinks a share price will be in 12 months from now.

Macquarie currently rates ANZ as neutral with a price target of $23.50. As mentioned, it’s concerned about potential impairments and how higher interest rates will impact growth.

The broker Morgan Stanley is currently equal weight on the big four ASX bank, with a share price target of $24.30. It also recognises that bad debts are likely to increase.

However, Ord Minnett is more positive on the bank with a price target of $28.30. It’s positive about the prospect of a rising NIM.

All of these brokers are expecting sizeable dividends from ANZ.

For example, Ord Minnett has projected a grossed-up dividend yield of almost 10% in FY23.

The post What’s the outlook for the ANZ share price in 2023? appeared first on The Motley Fool Australia.

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More reading

• Analysts name 2 ASX dividend shares to buy with 5%+ yields
• Why might ASX-listed ANZ want to snap up MYOB?
• Surprise US inflation pumps the brakes on ASX 200 bank shares
• What’s the outlook in FY23 for ASX 200 bank shares?
• ASX 200 midday update: ANZ confirms MYOB talks, energy shares fall

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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 Macquarie Group Limited and 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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Okay, we get it. Inflation is high so interest rates need to rise.

But after a whopping 125 basis point increase over the past couple of months, grocery bills surging, record-high petrol prices and a pummelling of our ASX shares, isn’t that enough pain?

Surely putting people through such financial stress can’t be good for the economy either?

AMP Ltd (ASX: AMP) chief economist Dr Shane Oliver explored this very dilemma this week.

“Many are still questioning why central banks need to do much – what will RBA rate hikes do to bring high lettuce prices back down?” he said on the AMP blog.

“And that central bank worries about wages growth picking up causing a wage-price spiral are just a baby boomer fantasy. So just sit it out.”

Authorities are scarred by the 1970s

The reason why central banks want to kill off inflation at any cost is because of the experience from the 1970s.

There were a bunch of reasons for inflation creeping up high that decade in Australia and the United States.

According to Oliver, the problem was exacerbated in Australia with wages growth of more than 20% and huge fiscal stimulus in 1974.

“The automatic indexation of wages to inflation from 1975 just helped lock in high inflation,” he said.

“The end result was a decade of high inflation and high unemployment.”

Unfortunately, central banks and governments did not help the situation.

“The problem was that policymakers were too slow to realise the extent of the inflation problem initially and then were too quick to ease which enabled inflation to quickly pick up again and move higher,” said Oliver.

“The longer inflation persisted the more inflation expectations rose – with wage growth rising – making it harder to get inflation back down.”

Will we go back to the future?

So how can 2022 turn into the 1970s?

Labour markets are once again very tight. In the US, wages growth has burst out to about 5%, while Australia’s unemployment rate is now at a 48-year-low of 3.5%.

The war in Ukraine has resulted in supply shocks for both food and energy, which have surged in price. In Australia, the east coast floods have added to the food inflation.

Recent geopolitics and the COVID-19 pandemic have changed the way nations and corporations conduct business.

“The globalisation that followed the end of the USSR and trade with China is under threat and appears to be reversing, not helped by a desire to onshore supply chains.”

Decarbonisation of economies are also boosting short-term capital spend and demand for certain metals.

Also, authorities are just coming out of a long period of low inflation.

“Policymakers were caught focussing on the last war of disinflation coming out of the pandemic just as they were in the 1960s when the big fear was a return to 1930s deflation,” said Oliver.

“This saw massive fiscal stimulus and money supply growth.”

Inflation leads to inflation expectations, which is dangerous

All these reasons are why central banks are so determined to blunt inflation, even if it means our ASX shares take a beating and economies might even fall into recession.

Inflation is running around 9% in the US and Europe, while in Australia it’s estimated to be about 6%.

“And, as we saw in the 1970s, the longer it remains high the more businesses and workers will expect it to remain high and they will plan accordingly,” said Oliver.

“That is, inflation expectations will move up, which will make it harder to get inflation back down.”

Central banks can’t bring down the cost of lettuce or unleaded fuel. But they’re correct in trying to do whatever they can to dampen demand, according to Oliver.

“They are right to have moved to a more aggressive strategy as it will slow demand and by stressing that they are committed to returning inflation to target will help keep inflation expectations down.”

Oliver is optimistic that the authorities will be successful and that the world will not slip into the awful stagflation spiral of the 1970s.

“Longer-term inflation expectations remain low (at 3.1% in the US compared to nearly 10% in 1980) and wages growth is still relatively low, suggesting it should be easier to bring inflation down than it was in 1980,” he said.

“While inflation may not go back to pre-pandemic lows and the longer-term tailwind for investment markets from ever lower inflation and interest rates may be behind us, a full-on return to the 1970s malaise looks unlikely.”

The post Why interest rates need to rise despite ASX carnage: economist appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo 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.

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Rising inflation and interest rates have probably got you thinking about the potential impact on your wallet.

It’s certainly crossed my mind. So I spent time thinking about ways to stretch my family’s money further.

I’ll note that it was also important to me and my wife to have money left over for savings and/or investments.

So, here are some ways that I’m saving money.

Budget 

First and foremost, I got a budget going. 

I used a free budget template on Google Sheets which I found here. At the top right of the page, click “Template Gallery” and I chose the “Monthly Budget” option.

I got pretty precise with my estimates, using actual figures I came up with by analysing my bank statements from the past 12 months. In reality, however, using ‘reasonable estimates’ is a good starting point to seeing where your money goes each month.

You’ll probably be surprised at how much you’re spending on some items, which could be a perfect starting point to make savings!

Put away for big expense items 

I think this is a big one for most people. One month (or week, or fortnight – whatever your schedule for getting paid is) you seem to have plenty of spare cash to spend, and the next you’re back in the red. The culprit: a large land tax payment, a child’s birthday, or a car registration. Sometimes you can split these payments into more manageable bites, but others you can’t. When that’s the case, set cash aside regularly for these payments.

For example, if you expect your land rates bill to be $1,500 for the year, that’s $28.85 per week or $125 per month. Sure, it’s still a decent chunk of change, but either of those options are probably more bearable than a $1500 lump-sum payment.

So, list these big-ticket items in your budget. Add up the total annual amount due for those and chip away at them through the year. In effect, you’re smoothing out your expenses and setting yourself up for a better routine.

Choose annual payments

This mightn’t suit everyone, but where possible I’ve changed my subscriptions to the ‘annual’ payment option. 

Take Disney+ – a streaming service from Disney (NYSE: DIS) which my kids love – as an example. It’s currently $11.99 per month, or $119.99 for the year, which works out to be $10 per month – a saving of 16.6%. Then, in the months between, I’m putting away $10 per month into a separate account (just like I am for the land rates bill and water bills, etc.) to make sure I’ve got the money set aside for next year’s payment.

In doing so, though, it’s important to be careful not to create a cash-flow problem for yourself in the immediate future.

Find discounted alternatives

Human beings are typically a pretty routine species. We find something that works and often stick with it for simplicity. But that habit might be costing you. 

Here’s an example. To buy a 48-pack of nappies costs us $32 at Woolworths (ASX: WOW). I decided to check out prices on Amazon (NASDAQ: AMZN)’s store. Not only was it cheaper, I could get them even cheaper still by setting up a recurring purchase of that item. You won’t be able to do that for everything, but it’s worth a look for some of your more regular purchases.

Identify other habits

Speaking of habits, it could be worth looking into habits elsewhere in your life. Our grocery bill is typically pretty large. One way we can cut that back is changing what I have for lunch. I was regularly buying pre-made salads from Woolworths for simplicity at $6 a pop. It’s convenient, sure, but I can make something just as healthy (if not healthier) for less.

Invest in yourself

From the get-go, I figured out what my family’s monthly income was expected to be. After I accounted for the absolute top-priority payments (e.g. any debt repayments), I calculated what 10% of that total income would be and committed that to savings and/or investments.

This takes discipline and it could well require you to cut out some other expenditures that you deem to be less necessary. 

But this is an important step. After all, very few of us want to work forever. Saving money effectively buys you flexibility with your time – maybe not today, but in the future.

Interest rates are going up, which means any cash saved could earn a higher return. Perhaps even more opportunistic is the fact that the stock market has also come down, affording those people with a long-term time horizon an opportunity to buy shares at very attractive prices. 

If you can commit to setting aside a certain amount of money each week, fortnight, or month, doing so could be an excellent way to reward the future you.

The post Here’s how I’m saving money, despite higher inflation & interest rates appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Ryan Newman 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 Alphabet (A shares), Alphabet (C shares), Amazon, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Walt Disney. 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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On Thursday, the S&P/ASX 200 Index (ASX: XJO) was on form and charged higher. The benchmark index rose 0.45% to 6,650.6 points.

Will the market be able to build on this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to end the week in the red following a poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 53 points or 0.8% lower this morning. In the United States, the Dow Jones fell 0.45%, the S&P 500 dropped 0.3%, and the Nasdaq traded flat.

Oil prices edge higher

Energy producers including Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a decent finish to the week after oil prices edged higher. According to Bloomberg, the WTI crude oil price is up 0.15% to US$96.44 a barrel and the Brent crude oil price is up 0.25% to US$99.81 a barrel. Supply concerns boosted prices.

Rio Tinto’s quarterly update

The Rio Tinto Limited (ASX: RIO) share price will be on watch this morning when the mining giant releases its second quarter and first half production update. According to a note out of Goldman Sachs, its analysts expect quarterly iron ore shipments of 78.7 Mt and the consensus estimate is for 79.3Mt. The market will also be listening out for commentary on cost inflation.

Gold price drops

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a tough finish to the week after the gold price dropped overnight. According to CNBC, the spot gold price is down 1.6% to US$1,708.20 an ounce. Growing US Fed rate hike bets weighed on the safe haven asset.

AVZ shares poised to return

AVZ Minerals Ltd (ASX: AVZ) shares are poised to return from their lengthy suspension on Friday morning. This embattled lithium developer is currently fighting legal action from a Chinese company that claims it owns a stake in the Manono Lithium project. If things don’t go the company’s way, there are fears that AVZ could end up owning as little as 36% of the project.

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

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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 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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