Category: Stock Market

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) had a poor session and dropped into the red. The benchmark index fell 0.3% to 7,726.8 points.

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

ASX 200 expected to rise

It looks set to be a positive day for the Australian share market on Wednesday following a good session in the United States. According to the latest SPI futures, the ASX 200 is expected to open the day 36 points or 0.4% higher. On Wall Street, the Dow Jones rose 0.3%, the S&P 500 pushed 0.5% higher, and the Nasdaq charged 0.75% higher.

Oil prices tumble

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a tough session after oil prices tumbled overnight. According to Bloomberg, the WTI crude oil price is down 1.1% to US$78.25 a barrel and the Brent crude oil price is down 1% to US$82.64 a barrel. Traders were selling oil after the US Federal Reserve admitted that inflation has been stickier than expected in 2024.

Federal budget

The Federal Budget was announced last night and could have ramifications for some ASX 200 shares. Companies focusing on green energy, such as Fortescue Ltd (ASX: FMG), look set to benefit from the government’s $19.7 billion pledge to turn Australia into a renewable energy power. There are also new tax incentives for critical minerals. This includes $8 billion for green hydrogen. Bunnings owner Wesfarmers Ltd (ASX: WES) could benefit from $4.3 billion of new housing expenditure funding.

Gold price pushes higher

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a good session after the gold price charged higher overnight. According to CNBC, the spot gold price is up 0.8% to US$2,362.2 an ounce. Gold pushed higher despite the release of a hotter than expected inflation reading in the United States.

Buy AP Eager shares

The Eagers Automotive Ltd (ASX: APE) share price is good value according to analysts at Bell Potter. This morning, ahead of the release of the auto retailer’s annual general meeting update next week, the broker has retained its buy rating on its shares with a trimmed price target of $14.75. This implies potential upside of 18% for investors over the next 12 months. In addition, the broker expects 5.9% fully franked dividend yields in FY 2024 and FY 2025.

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

More reading

• Here are the top 10 ASX 200 shares today
• Why is the ASX 200 eerily quiet today?
• Should you buy Fortescue shares for that fat 8% dividend yield?
• 2 reasons Thursday is shaping up to be a huge day for the ASX 200
• Inherited a substantial sum of money? Here’s how I’d spend it (including the ASX stocks I’d buy)

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Eagers Automotive Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Income investors are a lucky bunch. That’s because the Australian share market is filled to the brim with ASX dividend stocks offering generous yields.

Four such stocks are listed below. Here’s what analysts are expecting from these buy-rated shares over the next couple of years:

BHP Group Ltd (ASX: BHP)

Mining behemoth BHP could be a great option for income investors according to analysts at Goldman Sachs.

The broker thinks the Big Australian’s shares are good value and could provide investors with decent dividend yields in the near term. For example, it is forecasting fully franked dividends of US$1.45 (A$2.19) per share in FY 2024 and then US$1.26 (A$1.90) per share in FY 2025. Based on the current BHP share price of $43.15, this equates to dividend yields of 5.1% and 4.4%, respectively.

Goldman has a buy rating and $49.20 price target on the miner’s shares.

QBE Insurance Group Ltd (ASX: QBE)

Goldman Sachs’ analysts also think that this insurance giant could be a top ASX dividend stock for income investors to buy.

The broker is forecasting dividends per share of 62 US cents (A$0.936) in FY 2024 and 63 US cents (A$0.951) in FY 2025. Based on the current QBE share price of $17.36, this equates to dividend yields of 5.4% and 5.5%, respectively.

Goldman has a buy rating and $20.90 price target on its shares.

Super Retail Group Ltd (ASX: SUL)

A third ASX dividend stock that Goldman thinks could be a buy for income investors is Super Retail. It is the owner of BCF, Supercheap Auto, Macpac, and Rebel.

Goldman expects Super Retail to be in a position to pay fully franked dividends per share of 67 cents in FY 2024 and then 73 cents in FY 2025. Based on its current share price of $13.51, this will mean yields of 5% and 5.4%, respectively.

The broker has a buy rating and $17.80 price target on its shares.

Universal Store Holdings Ltd (ASX: UNI)

A final ASX dividend stock that has been given the thumbs up by analysts is Universal Store. It is the youth fashion retailer behind the Universal Store, Perfect Stranger, and Thrills brands.

Morgans is very positive on the company and expects some nice yields from its shares despite a significant rally in recent months. It is forecasting fully franked dividends per share of 26 cents in FY 2024 and then 29 cents in FY 2025. Based on the current Universal Store share price of $5.35, this will mean attractive yields of 4.85% and 5.4%, respectively.

The broker has an add rating and $6.50 price target on its shares.

The post Buy BHP and these ASX dividend stocks appeared first on The Motley Fool Australia.

More reading

• Why more ASX mining shares could soon turn to takeover bids
• Inherited a substantial sum of money? Here’s how I’d spend it (including the ASX stocks I’d buy)
• BHP share price slides amid no deal on ‘compelling opportunity’
• Get paid huge amounts of cash to own these ASX dividend shares
• BHP shares on watch after new $64b Anglo American takeover offer rejected

Motley Fool contributor James Mickleboro has positions in Universal Store. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Super Retail Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Those who have been paying attention to ASX mining shares on the stock market over the past couple of years might have noticed a bit of a trend. Mergers and acquisitions (M&A) in the mining space are all the rage at the moment.

This was brought into sharp focus last month with the blockbuster $60 billion bid for the British miner Anglo American (LSE: AAL). As it currently stands, BHP Group Ltd (ASX: BHP) and Anglo remain locked in a delicate courtship dance. However, we’ve seen other marriages that have been proposed and, in some cases, consummated, on the ASX recently.

The merger of the old Newcrest Mining Ltd with US gold mining behemoth Newmont Corporation (ASX: NEM) last year would probably be the best example. But there are many others.

A long story short, M&A seems to be the flavour of the month.

This might cause some consternation amongst some ASX fans of mining shares. After all, there are plenty of examples throughout the ASX’s history of miners embarking on acquisition sprees when they are flush with cash at the height of a commodity cycle, only to shred shareholder capital when prices fall, but debts remain.

However, one ASX expert not only reckons that this latest wave of M&A is good for investors but also predicts that merger activity is still on its way up.

Expert: Don’t fear ASX mining share M&A

As reported by the Australian Financial Review, BlackRock Mining Trust’s Evy Hambro is telling investors not to fear. Hambro argues that, as a general rule, current conditions mean buying other companies or their assets is cheaper and more efficient for miners than building out new mines themselves.

Hambro, whose fund is the world’s largest mining fund, has reportedly chided miners for focusing too much on M&A in the past at the expense of shareholder returns. But those are not concerns he appears to currently hold.

Here’s some more of what he said:

Right now what we are seeing … is the cost of building new [mine] capacity has risen, we are seeing higher costs of constructing, we are seeing higher risks … around resource nationalism…

So I think the value of assets trading in the liquid market probably doesn’t reflect the fully risk-adjusted cost of building new capacity, and I am sure that has caught the attention of many management teams.

We think M&A is just normal business, and there is a point in the cycle when things tend to pick up a bit…. We would be absolutely in support of companies maintaining that disciplined approach to how they allocate capital, and that is an essential part, I think, of maintaining trust with investors and maximising the returns.

So, no doubt that will come as some welcome assurance for many followers of ASX mining shares who might be feeling a little apprehensive about the M&A boom that we’ve been witnessing. Let’s see which company comes up with a marriage proposal next.

The post Why more ASX mining shares could soon turn to takeover bids appeared first on The Motley Fool Australia.

More reading

• Buy BHP and these ASX dividend stocks
• Inherited a substantial sum of money? Here’s how I’d spend it (including the ASX stocks I’d buy)
• BHP share price slides amid no deal on ‘compelling opportunity’
• BHP shares on watch after new $64b Anglo American takeover offer rejected
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Sebastian Bowen has positions in Newmont. 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.

If you are lucky enough to have $10,000 burning a hole in your pocket, you might want to consider putting it to work in the share market.

After all, with the share market providing investors with a 10% per annum return over the long term, it could turn that money into something much larger in the future if you have no immediate use for it.

With that in mind, let’s now see if Telstra Group Ltd (ASX: TLS) shares would be a good option for those funds.

Are Telstra shares a good option?

It is fair to say that the telco giant has not been a great place to invest over the last 12 months.

Over this time, the company’s shares have lost 16% of their value. This compares to a 6.3% gain by the ASX 200 index.

Though, it is worth noting that this decline has little to do with Telstra’s performance and more to do with interest rates. As Telstra’s shares are treated like a bond proxy by many investors, demand falls when rates rise.

But that was then. What about now? Could an investment in Telstra shares deliver strong returns over the next 12 months? Let’s find out.

What could $10,000 become?

Firstly, if you were to invest $10,000 (and $1 more) in the telco giant, you would end up owning 2,740 shares at the current share price of $3.65.

According to a recent note out of Goldman Sachs, its analysts believe the company’s shares are undervalued at the current share price. That note reveals that the broker has put a buy rating and $4.55 price target on the company’s shares.

This means that if your 2,740 Telstra shares rose to that level, they would be worth $12,467. This is almost $2,500 or 25% greater than your original investment.

But the returns shouldn’t stop there. Telstra is historically one of the more generous dividend payers on the Australian share market and Goldman expects this to remain the case in the future.

The broker is forecasting a fully franked dividend of 18 cents in FY 2024. This represents a 4.9% dividend yield and will boost the value of your investment by $490 if you reinvest the income.

In total, this would mean that a $10,000 investment in Telstra shares becomes worth $12,957. That represents a total 12-month return of almost $3,000 or 30%, which is approximately triple the average market annual return.

The post How much could $10,000 invested in Telstra shares be worth next year? appeared first on The Motley Fool Australia.

More reading

• Inherited a substantial sum of money? Here’s how I’d spend it (including the ASX stocks I’d buy)
• Buy Telstra and these ASX dividend stocks for income
• How to help recession-proof your ASX share portfolio in May 2024
• 3 easy ways to reduce your ASX share portfolio’s volatility right now
• How to choose ASX shares for passive income

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

Sayona Mining Ltd (ASX: SYA) shares have had a year to forget.

One year ago, shares in the S&P/ASX 300 Index (ASX: XKO) lithium stock were trading for 23 cents apiece. Which was already well down from the highs of 36 cents a share in April 2022, when lithium prices were storming towards all-time-highs.

Yesterday, Sayona shares closed at 4.6 cents, putting the stock down 80% over 12 months.

As you’d expect, that kind of fall has also knocked the stuffing out of Sayona’s market cap, which has dropped to $471.95 million.

Unfortunately, this only caused more pain, as the market cap reduction led to Sayona Mining shares being booted from the S&P/ASX 200 Index (ASX: XJO) in March as part of the S&P Dow Jones Indices quarterly rebalance. This means some fund managers, limited to investing in the biggest pool of stocks, won’t be able to hold shares.

But the biggest and really inescapable pressure has been the massive retrace in lithium prices over the past 18 months. However, it’s worth noting that the price of the battery-critical metal looks to have found a floor in 2024.

So, after crashing 80% in a year, are Sayona Mining shares now good value?

What’s been happening with the ASX lithium miner?

Sayona’s primary focus is its North American Lithium (NAL) project, located in Quebec, Canada.

NAL is a joint venture project. Sayona Mining owns 75%, and Piedmont Lithium Inc (ASX: PLL) owns the other 25%.

Despite a stabilising lithium price and maiden production in H1 FY 2024, Sayona Mining shares have slumped 37% in 2024 to date.

With maiden half-year revenue of $118 million for the first half, the miner closed out 2024 with a cash balance of $158 million as at 31 December.

But it’s been burning through cash since then.

At its quarterly update, released on 26 April, the company reported achieving an 18% increase in production from the prior quarter to 40,439 dry metric tonnes (dmt).

Costs also increased, however, with unit operating costs up 10% quarter on quarter to $1,536 per dmt.

Rather alarmingly for Sayona Mining shares, while the lithium miner’s concentrate sales volumes increased by 142% from the prior quarter to 58,055 per dmt, it received an average realised price of $999 per dmt.

Or more than $500 per dmt less than it cost to produce.

Management reported cash holdings of $99 million as at 31 March, down $59 million over the three months.

Time to buy Sayona Mining shares?

With these figures in mind, it’s hard to make a case for buying Sayona Mining shares right now.

Indeed, the ASX lithium stock again finds itself among the top-ten most shorted stocks on the ASX this week, with a short interest of 8.1%.

Not that short sellers don’t often get it wrong, mind you.

And on the plus side, the Federal government has flagged ongoing and increased support for miners of critical minerals, which includes lithium.

But with the lithium price forecast to remain subdued in the year ahead, and with the production costs at NAL in mind, I’d put Sayona Mining shares on a watch list for now and hold off on buying.

The post Down 80% in a year, are Sayona Mining shares now a buy? appeared first on The Motley Fool Australia.

More reading

• Why ANZ, Fletcher Building, Macquarie, and Sayona Mining shares are dropping today
• What’s happening with the Sayona Mining share price on Monday?
• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares

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

Despite the Australian share market currently trading within sight of its record high, that doesn’t mean there aren’t any bargain shares out there for investors.

For example, three Australian shares that could be both cheap and offer big dividend yields are listed below.

Here’s what you need to know about these buy-rated shares:

Accent Group Ltd (ASX: AX1)

The first Australian share that could be both cheap and offer big dividend yields is Accent Group. Through brands such as HypeDC, Sneaker Lab, Platypus, Stylerunner, and The Athlete’s Foot, it operates over 800 physical stores and multiple online stores.

Bell Potter is a very big fan of the footwear focused retailer. It has a buy rating and $2.50 price target on its shares. This is notably higher than its current share price of $1.84.

In respect to income, Bell Potter is expecting the company to pay fully franked dividends per share of 13 cents in FY 2024 and then 14.6 cents in FY 2025. Based on its current share price, this represents yields of 7% and 7.7%, respectively.

Healthco Healthcare and Wellness REIT (ASX: HCW)

Another bargain Australian share could be Healthco Healthcare and Wellness REIT. It is a property company with a focus on health and wellness assets.

Bell Potter thinks its shares are dirt cheap at current levels. The broker currently has a buy rating and $1.70 price target on them. This compares to its current share price of $1.17, which is only a fraction above its 52-week low.

The broker also expects some big dividend yields from its shares in the coming years. It is forecasting dividends per share of 8 cents in FY 2024 and then 8.3 cents in FY 2025. This will mean dividend yields of 6.8% and 7.1%, respectively, for investors.

IPH Ltd (ASX: IPH)

A final Australian share that could be a bargain is IPH. It is an intellectual property solutions company with operations across the world.

Goldman Sachs is very positive on the company and sees significant value in its shares at current levels. The broker currently has a buy rating and $8.70 price target on its shares. This compares to its latest share price of $6.07.

As with the others, the broker also expects some big dividend yields from its shares in the near term. It is forecasting fully franked dividends per share of 34 cents in FY 2024 and then 37 cents in FY 2025. This would mean yields of 5.6% and 6.1%, respectively.

The post 3 bargain Australian shares with over 5% dividend yields appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Why Bellevue Gold, IPH, Life360, and Ramelius Resources shares are racing higher
• These ASX dividend shares offer 6%+ yields
• 4 excellent ASX 200 dividend shares to buy for your income portfolio
• 2 ASX dividend stocks 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 positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Accent Group and IPH. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It has been an uncharacteristically underwhelming 12 months for CSL Ltd (ASX: CSL) shares.

Over the period, the ASX biotech stock has lost around 10% of its value.

As a comparison, over the past 15 years, this magnificent company’s shares have generated an average total return of 16.6% per annum.

This would have turned a $10,000 investment in the ASX stock back in 2009 into $100,000 today.

And while recent weakness is very off-brand for CSL and disappointing for shareholders, it could prove to be a buying opportunity for non-shareholders.

That’s the view of a large number of analysts, which currently have buy ratings on the company’s shares with price targets implying that market-beating returns are possible.

What are analysts saying about this ASX stock?

One broker that is particularly bullish on CSL is Morgans. In fact, the broker has named the company on its best ideas list again this month. It has an add rating and $315.40 price target on them, which implies potential upside of almost 13% over the next 12 months.

It highlights the company’s shares are undervalued compared to historical averages. This is despite the ASX stock having a very bright outlook. It said:

While shares have struggled of late, we continue to view CSL as a key portfolio holding and sector pick, offering double-digit recovery in earnings growth as plasma collections increase, new products get approved and influenza vaccine uptake increases around ongoing concerns about respiratory viruses, with shares trading at 25x, a substantial discount (20%) to its long-term average.

Analysts at Macquarie are even more bullish on the ASX stock. They currently have an outperform rating and $330.00 price target on CSL’s shares. This suggests that upside of 18% is possible between now and this time next year.

The broker is very positive on the company’s outlook. So much so, it sees scope for CSL’s shares to rise to $500 within three years. This is almost double its current share price, which means that some very big annual returns would be coming for investors over the next three years if Macquarie is on the money with its recommendation.

In addition, the team at UBS remains very positive. Last month it retained its buy rating and $330.00 price target on CSL’s shares. UBS believes the ASX stock can achieve high-teens earnings growth over the next few years.

All in all, the broker community appears to believe this magnificent ASX stock could be worth buying and holding at current levels.

The post 1 magnificent ASX stock down 10% to buy and hold forever appeared first on The Motley Fool Australia.

More reading

• 4 founder-led ASX 300 shares that have helped this fund outperform
• 3 easy ways to reduce your ASX share portfolio’s volatility right now
• Buy CSL shares for growing dividends and ‘compelling long-term tailwinds’
• Morgans names more of the best ASX 200 shares to buy in May
• Aussie investors: 3 ASX shares to buy and hold forever

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

I view Warren Buffett as one of the best investors in the world. He has done exceptionally well at growing Berkshire Hathaway into a huge business thanks to the returns generated by himself and Charlie Munger. There are a few ASX shares that I think fit with his philosophy.

Buffett hasn’t outlined every factor that he considers when investing. But, one of the main things he likes to do is stay within his circle of competence, sticking to industries he knows. He also likes businesses that are capable of producing good growth for years ahead.

If I were Warren Buffett, I’d buy these three ASX shares for Berkshire Hathaway’s portfolio.

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

Soul Patts is the ASX share that’s most similar to Berkshire Hathaway. The Australian company is an investment conglomerate that owns private businesses and stakes in listed businesses such as TPG Telecom Ltd (ASX: TPG), New Hope Corporation Ltd (ASX: NHC), Tuas Ltd (ASX: TUA) and Apex Healthcare.

Soul Patts focuses on investments that generate good, defensive cash flows. It invests in the sorts of areas that Buffett may like, and it largely avoids technology companies (like Buffett does).

The ASX share has been listed for over 100 years, so it has shown excellent longevity already.

Soul Patts continues to expand its portfolio by making additional investments – agriculture and bonds/credit have been a recent focus by the company.

As a bonus, it has grown its dividend every year since 2000 and has a trailing grossed-up dividend yield of 4%.

Brickworks Limited (ASX: BKW)

Brickworks is an interesting business – it is the largest brickmaker in Australia and is involved in a number of other building products, including roofing, masonry, cement and battens. Berkshire Hathaway owns Clayton Homes, a modular home manufacturer somewhat similar to Brickworks.

But, Brickworks also owns a sizeable chunk of Soul Patts shares, making its underlying assets closer to Berkshire Hathaway.

Brickworks also has a large amount of money invested in industrial properties. The ASX share owns a 50% share in a joint venture with Goodman Group (ASX: GMG) where large warehouses are being built on excess Brickworks land. Building warehouses on this empty land increases the value of the land and unlocks rental profit.

The growing dividends from Soul Patts and the larger rental profits are funding bigger Brickworks dividends. It offers a trailing grossed-up dividend yield of 3.5%.

Collins Foods Ltd (ASX: CKF)

Fast food business Dairy Queen is owned by Berkshire Hathaway, so Buffett has shown his willingness to invest in the quick service restaurant (QSR) restaurants.

I think Collins Foods is the most compelling food ASX share at the moment. It operates KFCs in Australia, Germany and the Netherlands, as well as Taco Bells in Australia.

Over time, this business is expanding its networks in Australia and Europe, adding scale and boosting the profitability of the business.

KFC is a strong brand, and people keep coming back for more. In the FY24 first-half result, same store sales (SSS) grew by 6.6% at KFC Australia and 8.8% for KFC Europe.

The estimates on Commsec suggest Collins Foods could grow its earnings per share (EPS) by 44% between FY24 and FY26. This would put the Collins Foods share price at under 13x FY26’s estimated earnings.

The post If I were Warren Buffett, I’d buy these 3 ASX shares appeared first on The Motley Fool Australia.

More reading

• Inherited a substantial sum of money? Here’s how I’d spend it (including the ASX stocks I’d buy)
• How ASX growth shares can become top dividend stocks
• 2 top ASX growth shares I’d buy today
• How to choose ASX shares for passive income
• Top ASX shares to buy for your superannuation fund in May 2024

Motley Fool contributor Tristan Harrison has positions in Brickworks, Collins Foods, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway, Brickworks, Goodman Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Berkshire Hathaway, Collins Foods, and Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Superannuation is not high on the list of priorities for young investors, according to a new survey by financial advisory company, Findex.

Young Australians appear not to consider superannuation that important, with just 22% of Millennials and 13% of Gen Zs rating it a key wealth-building investment, says Findex.

Instead, the majority of young investors favour bank savings.

In addition, Gen Zs are the least likely to know their superannuation balances to the nearest $1,000, with 26% having a vague idea and 22% having no idea.

Among Millennials, 23% have a vague idea and 6% have no idea of their superannuation balances.

Knowledge of superannuation varies across life stages

Findex Head of Investment Relations Matthew Swieconek says the way each generation understands superannuation and its benefits differs significantly.

He says different life stages call for different superannuation priorities.

In terms of Millennials, who were born between 1981 and 1995, Swieconek said:

Entering the workforce during the Global Financial Crisis, Millennials are often burdened with student debt and face a volatile job market. They may prioritise responsible investing and seek growth opportunities, despite a higher risk tolerance.

In terms of Gen Z Australians, who were born between 1996 and 2010, he said:

Just starting their careers, Gen Z is digitally savvy and information hungry. They may be interested in innovative investment options and prioritise sustainability factors in their super choices.

Swieconek said the investing preferences of various age groups will influence their superannuation strategies and outcomes.

He commented:

For the younger crowd, it’s all about seizing the moment and aiming high with more aggressive investment choices, geared towards maximising long-term growth potential.

On the flip side, older generations often prefer to safeguard their hard-earned wealth through more conservative approaches, prioritising stability over potential gains.

How much money do you need in retirement?

As we’ve recently covered, Australians tend to overestimate how much money they need in retirement.

The Association of Super Funds of Australia’s Retirement Standard says couples aged 65 to 84 need $690,000 in superannuation, and singles need $595,000 by retirement age (that’s 67).

On top of that, they need a part pension, and altogether, that’s enough to fund a comfortable lifestyle costing an estimated $72,000 per annum for couples and $51,000 for singles.

For a ‘modest retirement’, both singles and couples need $100,000 in superannuation and a part pension to cover living expenses of about $47,000 for couples and $33,000 for singles.

The Association’s estimates assume retirees own their own homes without a mortgage and draw down all their super, invest it, and receive a 6% annual return.

Introduced in 1992, superannuation is the primary savings vehicle for retirement in Australia.

Millennials and Gen Zs will be the first generations to receive mandatory employer superannuation contributions throughout their entire working lives.

The mandatory contribution rate has increased from 3% in 1992 to 11% today.

6 ways young investors can boost their superannuation

Swieconek offers the following six tips to help young Australians maximise their superannuation savings.

Tips for Millennials

• Increase super contributions in line with income growth, leveraging growth strategies to maximise long-term savings and compound interest benefits. Take advantage of employer-matching programs
• Balance debt and super savings. For example, investigating alternative homeownership strategies such as rent-vesting while focusing on debt management and increasing super contributions
• Focus on building a diversified investment portfolio, considering risk tolerance and long-term goals

Tips for Gen Zs

• Initiate contributions to super as soon as possible to leverage compounding interest
• Explore growth-focused investment options within superannuation to align with a longer investment timeline
• Take an interest in your super and investment opportunities. Websites like Young Money can provide financial education, and using budgeting and investment tracking apps can enhance financial literacy

The post 6 ways young investors can boost their superannuation appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Why is the ASX 200 eerily quiet today?
• 2 of the best growth-focused ASX shares to consider buying in May
• Brokers name 4 ASX 200 dividend shares to buy
• What should be in tonight’s Budget

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 no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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Motley Fool contributor Sebastian Bowen 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 Pinnacle Investment Management Group and SiteMinder. The Motley Fool Australia has positions in and has recommended Pinnacle Investment Management Group and SiteMinder. 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.