Apple's senior vice president of software engineering, Craig Federighi (left) spent weeks testing OpenAI's chatbot, ChatGPT (right), per The New York Times.
Josh Edelson/AFP via Getty Images; Smith Collection/Gado via Getty Images
Apple executives knew they needed to upgrade Siri after they started using ChatGPT.
The company's software chiefs spent weeks using the OpenAI chatbot before making the decision.
Apple is expected to unveil its AI offerings in its upcoming Worldwide Developers Conference.
Apple executives realized their digital assistant Siri badly needed an upgrade after they began testing OpenAI's chatbot, ChatGPT.
The company's software chiefs, Craig Federighi and John Giannandrea spent weeks using ChatGPT before making the decision, The New York Times reported on Friday, citing two people familiar with the matter.
Federighi and Giannandrea oversee the company's software engineering as well as machine learning and AI strategy respectively. Both report directly to Apple's CEO Tim Cook.
Representatives for Apple didn't immediately respond to a request for comment from BI sent outside regular business hours.
Speculation about an impending Siri overhaul comes ahead of the Apple's annual Worldwide Developers Conference, which is set to take place from June 10 to June 14. The company is widely expected to unveil its AI offerings then.
"We're excited to share the details of our ongoing work in that space later this year," Cook told investors on February 1.
Unlike most tech giants, Apple has remained relatively coy about how it intends to compete in the field of AI. The Cupertino-based company hasn't announced any major deals with AI companies like Microsoft or try to scoop up as many AI chips as it can like Meta.
But that isn't to say that Apple has taken its eyes off the wheel.
In addition to its in-house efforts, Apple is also in talks with both OpenAI and Google to integrate their chatbots, ChatGPT and Gemini, in the next version of iOS. In fact, Apple is already finalizing an agreement with OpenAI, Bloomberg reported on Friday.
The Sam Altman-led AI company has long been on Apple's radar, with Cook admitting in an interview with Good Morning America last year that he, too, uses ChatGPT.
"Yeah, I'm excited about it. I think there's some unique applications for it and you can bet that it's something that we're looking at closely," Cook said.
McDonald's double cheeseburger with fries and drink.
Aleksandr Zubkov/Getty Images
McDonald's reportedly plans to launch a limited-time $5 meal.
In first-quarter earnings, the company's leadership highlighted how inflation has affected customers.
Other fast food chains are also worried about affordability.
McDonald's is looking to launch a $5 meal in the US in a move to bring back price-sensitive customers.
The meal includes four items, people familiar with the matter told Bloomberg and Restaurant Business. Customers would choose between two of the chain's signature burgers — a McChicken or a McDouble — and get four-piece McNuggets, fries, and a drink. The $5 promotion would last for a month, Bloomberg reported.
It's unclear when the promotion would start and if it would apply to the entire US or other geographies.
The discussions about the new deal come two weeks after the fast food giant's first-quarter earnings call, where leadership highlighted how customers are increasingly price-sensitive.
"I think affordability is clearly an area where consumer expectations are heightened," McDonald's chief financial officer Ian Borden said on the call. "Obviously, they're getting hit," by inflation, he added.
The company previewed a value meal on the earnings call without any specifics. CEO Chris Kempczinski said McDonald's has local value meals around the US, but no standard national offering like competitors do.
A $5 meal would be a stark drop from current prices, especially in higher-cost cities, according to a Business Insider analysis.
A meal consisting of the same four items — a McChicken, fries, a drink, and four-piece chicken nuggets — costs $18.26 in downtown New York City. In downtown San Francisco, the McChicken version costs $16.15, and the burger variant costs $17.75.
The new bundle would be priced lower than a Happy Meal, which starts at $6.39 in downtown Manhattan.
The company's stock has fallen about 7% year-to-date as investors worry about rising costs and intensifying fast-food competition.
Fast-food chains across the US are grappling with fewer orders from customers who no longer find their meals affordable. Wendy's, Shake Shack, Starbucks and Burger King parent Restaurant Brands International have all said in their latest earnings call that they will exercise caution on prices.
"We're going to stay careful on pricing," Gunther Plosch, Wendy's CFO, said in its earnings call earlier this month. "I don't think we're going to get too greedy."
Fast-food giants have also been hit by California's new minimum $20 hourly wage for limited-service restaurants. Franchisees that have raised prices are worried they may lose customers to sit-in dining chains like Chili's and Applebee's, which are not subject to the wage hike.
McDonald's did not respond to an immediate request for comment sent outside standard business hours.
Google Glass, Google's smart glasses, were meant to be revolutionary but were released before they were ready and had a number of quality issues.
Mandel Ngan/AFP via Getty Images
Google Glass existed for almost exactly 10 years before being discontinued.
Google Glass' failure came amid widespread quality issues and a general lack of adoption.
Apple's smart glasses, the Apple Vision Pro, seem to be succeeding where Google Glass failed.
First announced in 2012, and then released to a select number of product testers in 2013, Google Glass was thought by many tech experts and industry watchers to be a revolutionary new device that would change the way human beings and technology interacted.
With the benefit of hindsight, we now know those hopes were overblown.
So, what went wrong? A cocktail of factors led to the failure of Google Glass. But before we discuss the demise, let's establish a baseline understanding of this once-promising hardware.
What did Google Glass do?
Google Glass was first developed by a lab formerly known as Google X. The secretive research initiative, which also developed the self-driving car technology now known as Waymo, is now a subsidiary of Alphabet, Google's parent company.
Google Glass was like a heads-up display and a mini computer joined together in one pair of glasses. It placed a small cube of glass just before its wearer's right eye and had a camera inset into the frame beside that cube.
The camera could be used to do things like identify objects or locations or project a restaurant's menu or a subway station's schedule before the user's vision in real time. It could also share images and videos via Google Meet.
Google Glass even integrated with Google Calendar and could show wearers their schedules or event notifications.
Google Glass used the Google search engine to summon information, allowing wearers to navigate the world hands-free and with their eyes raised from their phone while still enjoying all the benefits of a smart device.
The hardware was controlled via voice command or a touchpad on the side of the frame. Google Glass could also do many things a smartphone can, like send and receive texts, take photos, and so on.
Why did Google Glass fail?
Google launched several editions of Google Glass — some for consumers and others for businesses — but none achieved widespread adoption.
Kimihiro Hoshino/AFP via Getty Images
Google Glass was released before it was ready. Early users complained about short battery life, slow upload times, inferior camera quality, and spotty voice control and voice recognition abilities.
The system often misheard words and was unable to pick up commands over loud background noise. And despite being essentially a smart pair of glasses, the physical design of early Google Glass editions was not that smart: the arms of the glasses did not fold down, so storing a Google Glass when it was not being worn was a frustration.
It also must be said that, in many ways, Google Glass was an answer to a problem that did not exist. Despite the best efforts of Google co-founder Sergey Brin, who frequently wore the glasses in public, the public did not have much interest in the technology.
In fact, many people hated the sense that they were always being filmed and monitored by people wearing Google Glass.
Though the technology had a brief ascendence used in professional settings, with businesses like Volkswagen and Boeing seeing increased productivity in workers wearing a headset, even the specialized "Enterprise Edition" of Google Glass failed. There was simply not enough adoption.
Can you still buy Google Glass?
You can find pairs of Google Glass for sale on Amazon and on eBay and at certain other platforms, so you can still purchase a set for yourself. But Google no longer offers any support for the device, thus if you have an issue with the hardware, you're on your own.
There will be no further updates, no technical assistance, and certainly no repair or replacement of a Google Glass bought via a third-party seller.
You can expect to pay between $150 and $300 on average for a Google Glass set today, though some Enterprise and Expedition editions sell for much more than that. In comparison, a brand-new Apple Vision Pro currently costs $3,499.
How is Apple Vision Pro different from Google Glass?
Unlike Google Glass, which used only voice and touch control, users can control the Apple Vision Pro through highly precise hand motions.
Tayfun Coskun/Anadolu via Getty Images
Whereas Google Glass used a small, semi-transparent screen perched before one eye, an Apple Vision Pro headset fully covers both eyes and can create a truly immersive experience.
And whereas Google Glass simply added to its user's real-time experience, Apple Vision Pro can transform it. The former can display videos, whereas the latter brings you into the visual experience.
Google Glass and Apple Vision Pro also used different control features. As noted, Google Glass was controlled by voice or by touch.
Apple Vision Pro is controlled by hand motions and voice, with those motions being highly precise. You can, for example, type on a virtual keyboard or pinch to zoom with your fingers simply grasping at the air.
Russian President Vladimir Putin and Andrei Belousov in 2017.
Mikhail Svetlov/Getty Images
Russian President Vladimir Putin is replacing his defense minister with a civilian economist.
Andrei Belousov will lead Russia's military-industrial complex as Putin prepares for a protracted war.
The move shows Russia's wartime economy has become a key pillar of growth.
Russian President Vladimir Putin replaced his defense minister with a civilian economist on Sunday. The move has surprised analysts and signaled to some observers that Putin has no intention of ending the war in Ukraine any time soon.
The Russian leader proposed Andrei Belousov, a 65-year-old former deputy prime minister, as defense minister to replace his longtime ally Sergei Shoigu.
The personnel changes still need to be approved by Russia's parliament, but given Putin's grip on power, there are few doubts they will be checked off.
Kremlin spokesman Dmitry Peskov said the Russian defense military's budget is nearing that of the former Soviet Union in the mid-1980s.
"Today on the battlefield, the winner is the one who is more open to innovation," Peskov said of Belousov's appointment, per TASS state news agency.
"Therefore, it is natural that at the current stage, the president decided that the Russian Ministry of Defense should be headed by a civilian," Peskov added.
Putin is putting the war at the center of Russia's economy
Putin's cabinet reshuffle comes as the war in Ukraine drags well into its third year.
Russia continues to face sweeping Western sanctions that were designed to cripple its economy. However, Russia's economy has appeared to remain resilient.
Reports from Russia suggest the country's economy is primarily driven by wartime activities that generate a demand for military goods and services, subsidies that steady the economy, and sharp policy-making from its top central banker, Elvira Nabiullina.
However, the Russian leader's appointment of a civilian economist with no military experience as defense minister signals Putin expects the military-industrial complex to be a key pillar of Russia's wartime economy amid the conflict in Ukraine.
"Belousov's appointment to the position of Russian Defense Minister is a significant development in Putin's efforts to set full economic conditions for a protracted war," the analysts added.
Defense minister Belousov will be a 'financial administrator'
Belousov's appointment to defense minister is unlikely to impact military operations on the ground.
Valery Gerasimov, Russia's top general and chief of general staff, will remain in his position and is expected to continue playing a key role in directing the Ukraine war, Mark Galeotti, the director of the London-based Mayak Intelligence consultancy, told Reuters. Gerasimov reports directly to Putin.
"In that context, having an economist, someone who has been speaking about the need to basically subordinate much of the economy to the needs of the defense sector, makes a certain amount of sense," Galeotti told the news agency. "It is now essentially a financial administrator's job and Belousov can do that."
"The protests on college campuses are almost like performative art, and we're not actually helping Palestinians or Israelis with these surreal protests," the hedge fund billionaire told the Financial Times in a story published Saturday.
Pro-Palestinian protests have rocked American colleges like Columbia University and UCLA since April, with students calling upon their schools to sever any financial ties with Israel.
"Freedom of speech does not give you the right to storm a building or vandalize it. That's not freedom of speech. That's just anarchy," Griffin said of the student protesters.
The US, Griffin said, has "lost sight of education as the means of pursuing truth and acquiring knowledge." Instead, US colleges were now seized by a narrative that sees the country as one that is "plagued by systemic racism and systemic injustice," he added.
"What you're seeing now is the end-product of this cultural revolution in American education playing out on American campuses, in particular, using the paradigm of the oppressor and the oppressed," Griffin said.
Representatives for Griffin didn't immediately respond to a request for comment from BI sent outside regular business hours.
This isn't the first time Griffin has weighed in on the anti-Israeli sentiment that has gripped US colleges. Back in January, Griffin said he was pausing his donations to his alma mater, Harvard University over its approach to on campus antisemitism.
Griffin, who donated over $500 to Harvard over four decades, is one of university's most generous donors, per The Harvard Gazette.
"Or are we going to educate a group of young men and women who are caught up in a rhetoric of oppressor and oppressee and, 'This is not fair,' and just frankly whiny snowflakes?" he continued.
When asked about what Harvard should do next, Griffin told the FT that the Ivy League institution should "embrace our Western values" and get their students to "manifest these values throughout the rest of their life."
Representatives for Harvard didn't immediately respond to a request for comment from BI sent outside regular business hours.
Griffin's criticisms of student protesters highlight the huge influence that Corporate America has on higher education. Besides withholding donations, corporate leaders also hold immense power over the career prospects of college graduates.
Last month, ExxonMobil CEO Darren Woods told CNBC that the oil giant "wouldn't be interested" in hiring students who took part in the anti-Israel protests.
"Here's your résumé with a picture of you burning a flag. See that one. That goes in this pile over here, cause I can get the same person's talent in this pile that's not burning anything," O'Leary said.
The S&P/ASX 200 Index (ASX: XJO) managed to snatch a win from the jaws of defeat today, giving up an early plunge to finish slightly ahead. By the closing bell, the ASX 200 had added a tentative 0.013%, leaving the index at exactly 7,750 points.
This underdog start to the week comes after a decent end to the American trading week last Friday night (our time).
The Dow Jones Industrial Average Index (DJX: .DJI) was clearly looking forward to the weekend and galloped 0.32% higher.
We can’t say the same for the Nasdaq Composite Index (NASDAQ: .IXIC) though, which inched 0.033% lower.
But let’s get back to the ASX now, with an analysis of how the various ASX sectors kicked off their respective weeks.
Winners and losers
It was a fairly subdued day of trading for Australian investors this Monday.
The worst place to be ended up being the energy sector. The S&P/ASX 200 Energy Index (ASX: XEJ) had a shocker, tanking by 0.73%.
Tech stocks didn’t get a look in either. The S&P/ASX 200 Information Technology Index (ASX: XIJ) was walked backwards by 0.56%.
Industrial shares fared a little better than that, but the S&P/ASX 200 Industrials Index (ASX: XNJ) still retreated by 0.15%.
Financial stocks were fairly flat, evidenced by the S&P/ASX 200 Financials Index (ASX: XFJ)’s 0.03% slide.
Even flatter were miners, with the S&P/ASX 200 Materials Index (ASX: XMJ) slipping by 0.02%.
Real estate investment trusts (REITs) stayed exactly where they were on Friday though. The S&P/ASX 200 A-REIT Index (ASX: XPJ) ended today exactly where it started.
Turning to the winners now, and today’s best sector was consumer discretionary shares. The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) had a ball, banking a healthy rise of 0.52%.
That was closely followed by consumer staples stocks. The S&P/ASX 200 Consumer Staples Index (ASX: XSJ) rose by 0.48%.
Healthcare shares were also a great place to be, evidenced by the S&P/ASX 200 Healthcare Index (ASX: XHJ)’s 0.41% increase.
As were gold stocks, although less so. The All Ordinaries Gold Index (ASX: XGD) gave up an early surge to book a 0.06% gain.
Utilities shares almost mirrored those returns, with the S&P/ASX 200 Utilities Index (ASX: XUJ) lifting by 0.03%.
Communications stocks were our final winners for the day, although the S&P/ASX 200 Communication Services Index (ASX: XTJ) only managed a slight 0.02% improvement.
Top 10 ASX 200 shares countdown
Coming in best this Monday was gold stock Bellevue Gold Ltd (ASX: BGL).
Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.
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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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Smartgroup and Super Retail Group. The Motley Fool Australia has recommended Bapcor, IPH, and Jb Hi-Fi. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
Volunteers, together with the police, inspect the site of the explosion and remove sharp objects from the road on May 12, 2024 in Vovchansk Kharkiv Region, Ukraine.
Vlada Liberova/Libkos/Getty Images
A Ukrainian commander complained that promised defenses in Kharkiv are missing, per the BBC.
Denys Yaroslavskyi called the lack of defense like mines a "betrayal," blaming corruption or negligence.
Russia has launched a renewed assault on Kharkiv, with an estimated 35,000 troops pushing on the northern front.
The commander of a Ukrainian reconnaissance unit said defenses in Kharkiv have been lacking as Russia tries to push into the region, blaming corruption or negligence from officials.
"There was no first line of defense," Denys Yaroslavskyi told the BBC, which reported from Vovchansk on Sunday. "We saw it. The Russians just walked in. They just walked in, without any mined fields."
Jonathan Beale, a defense correspondent at the outlet, wrote that Yaroslavskyi showed him drone footage of Russian troops walking past Ukraine's northeastern border without resistance.
Yaroslavskyi, who heads a Ukrainian Special Reconnaissance Unit, told the BBC that at least some defenses promised by officials were missing in Kharkiv.
"Either it was an act of negligence, or corruption. It wasn't a failure. It was a betrayal," he said, per the outlet.
He and his men were set to deploy to the front line in Vovchansk at the time of the BBC's report.
The Armed Forces of Ukraine's General Staff press office did not immediately respond to a request for comment sent outside regular business hours by Business Insider.
Lying on Kharkiv's northeastern border, Vovchansk is one of Ukraine's closest cities to the Russian region of Belgorod. Kharkiv saw months of heavy fighting in the early stages of the war, when Russian forces initially seized it but were later rebuffed by Kyiv.
Now, Russia is trying to re-establish a foothold in the region through a new offensive, claiming this weekend to capture several border villages.
Oleksandr Syrskyi, chief of Ukraine's armed forces, said on Sunday that the situation in Kharkiv had "significantly worsened."
"Currently, there are ongoing battles in the border areas along the state border with the Russian Federation," Syrskyi wrote in a message on Telegram.
It's unclear what's the Kremlin's intended goal for a renewed assault on Kharkiv. Russian leader Vladimir Putin in March suggested that Russia create a "buffer zone" there that would shield Belgorod from possible Ukrainian attacks, a comment that Kyiv said was a sign Moscow was preparing to attack in the north.
Most recently, an apartment building in Belgorod partially collapsed on Sunday due to shelling, killing 13 and injuring 20, per local authorities. Russia blamed the deaths on fragments of Ukrainian missiles intercepted by air defense systems.
As for the fighting in Kharkiv, Vovchansk has reportedly been a focal point for the latest Russian attack, with conflicting reports on Sunday of whether the settlement has been seized.
Thousands of people have been evacuating Vovchansk, which originally had a population of 20,000 that's dwindled to 3,000 since the war started, per The BBC.
It cited a report in March by Russian independent outlet Verstka, which quoted a Kremlin source saying Russia will need some 300,000 more troops, or 10 times more than the estimated personnel already deployed in Kharkiv, to surround and take the city.
The ISW assessed that Russia's ability to attack Vovchansk was largely due to the West restricting Ukraine from hitting military targets with NATO-supplied equipment.
The US more recently approved about $25.7 billion in weaponry and ammo for Ukraine, including artillery shells desperately needed by Kyiv to stave off Russian advances.
But should investors still be buying ASX gold ETFs in May of 2024? That’s what we’ll be discussing today.
As we’ve just touched on, this year has been an extraordinary one for gold. The precious metal began the year at US$2,077 per ounce but has climbed up to roughly US$2,360 today. That comes after gold hit a new all-time high of around US$2,415 an ounce just last month.
Remember, it was only as recently as late 2018 that gold was asking under US$1,200 for that same ounce. 2022 also saw gold retreat to roughly US$1,600.
So the gold market is unequivocally enjoying a boom.
This, of course, has meant that gold-backed investments like gold miners and precious metal ETFs have also been rising in value.
To illustrate, the VanEck Gold Bullion ETF (ASX: NUGG) â a popular ASX vehicle for gold investment â has soared by almost 25% in value since October.
Other similarly structured ETFs, including the Global X Physical Gold ETF (ASX: GOLD) and the Perth Mint Gold ETF (ASX: PMGOLD), have performed commensurately.
But is there still steam left in this gold rush? Or is it too late to hop on the gold bandwagon?
Should investors still consider gold ETFs in May 2024?
Well, one commentator still preaches that gold is an asset class that investors ignore at their peril. ETF provider Global X (operator of the GOLD ETF listed above) is arguing that gold’s returns over the past ten years, together with its inverse correlation to other assets like shares, make it a great choice as part of a diversified portfolio.
In a discursive piece, Global X found that gold returned an average of 9% per annum over the ten years to April 2024, underperforming the US markets but outperforming ASX shares.
Over an even longer period of time, the report found that gold was advantageous to hold:
Adding gold has increased the annual returns of Australian portfolios for a given amount of risk for most levels of risk and return over the past 20 year…
Gold has had these effects because the gold price is uncorrelated with Australian risk assets (shares, property). Furthermore, and crucially, gold maintains these low correlations while performing relatively strongly over the longer-term. In sum: gold provides diversification that works.
The report also argues that one of gold’s main advantages for investors is the inverse correlation to other asset classes. This results in gold performing an ‘insurance’ role in a diversified portfolio:
In asset allocation, gold’s role is diversification. This makes it different from property, shares, and bonds â which provide income, capital growth and capital stability, respectively….
Insurance is the ultimate form of diversification. When the value of one’s car or house â or whatever else is insured â falls or disappears entirely, an insurance policy can pay out…
While not the same, gold’s role in asset allocation can be understood in similar terms. Gold tends to perform well when other assets struggle, thereby limiting losses. It does this due to its tendency to perform well during crises and its low correlations with other assets.
It should be noted that Global X isn’t exactly unbiased here, even though it runs one of the ASX’s most popular gold-backed ETFs. However, the report makes for some compelling reading for anyone interested in gold as an investment.
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If you have a very volatile share portfolio, it can be an emotional rollercoaster. Of course, some people love the thrill of rollercoasters â but the rest of us don’t want to feel that sense of anxious apprehension every time we check our share portfolios. We just want nice, slow, dependable wealth accumulation. Nothing fancy, just a few extra dollars in our pocket each week will do it.
Luckily for us, there are many quick and easy ways to reduce the volatility of our share portfolios. In this article, I take a look at three options: diversification, defensive shares, and dollar-cost averaging.
1. Diversification
One of the quickest and easiest ways to reduce your portfolio’s volatility is to diversify your investments. This essentially means buying many different shares or other investments and combining them into one portfolio.
The share prices of different companies will respond differently to different events. For example, news of an interest rate hike will hurt the share prices of growth companies with higher debt levels, as it increases their borrowing costs. However, it could boost the prices of bank and insurance shares, which tend to benefit from higher interest rates.
If you had a portfolio that only consisted of growth shares, you’d be hurt in this scenario. However, if you also owned some banking and finance shares, the gains in their share prices may have offset your other losses. And so, overall, you would have reduced your portfolio’s volatility, simply by being more diversified.
If you don’t have much money to invest but still want to diversify your portfolio quickly, exchange-traded funds (ETFs) are a great option. ETFs trade on the ASX much like ordinary shares but are actually investment funds.
Some are designed to track specific indices, like the iShares Core S&P/ASX200 ETF (ASX: IOZ). Others invest in commodities and other asset classes, like the Global X Physical Gold ETF (ASX: GOLD), which â as the name suggests â invests in gold.
2. Defensive shares
OK, so we’ve agreed that diversification is good if you want to reduce your portfolio’s volatility. But what if there was a particular type of share you could buy to help protect yourself if the rest of the market goes belly-up? As a matter of fact, there is: defensive shares.
Defensive shares belong to companies that tend to do well regardless of the state of the broader economy. They might be consumer staples shares like Coles Group Ltd (ASX: COL), healthcare companies like CSL Ltd (ASX: CSL), or telecommunications companies like Telstra Group Ltd (ASX: TLS). These companies all provide goods and services that people rely on daily, so their profitability is less affected by economic downturns.
Think of defensive shares almost as a type of insurance. When the prices of other stocks are tumbling, defensive shares tend to preserve their value. This means that adding a few of them to your portfolio can help it stay buoyant even when market conditions get choppy.
3. Dollar-cost averaging
Another great way to reduce your portfolio’s volatility is to follow a dollar-cost averaging (‘DCA’) investment strategy. Rather than investing one lump sum upfront, proponents of DCA will invest smaller amounts regularly over time, regardless of market conditions.
Sure, that might not sound that earth-shattering, but the magic of this strategy is best illustrated with a simple example.
Let’s say you wanted to invest $1,000 in Company A, and you could choose between investing your money as one lump sum now, or as five $200 investments each month for each of the next five months. Let’s assume that the current share price is $100, and the prices on the days you make your trades in the next 4 months will be $110, $90, $80, and $95.
If you invested all your money as one lump sum upfront, your shareholding over the next five months would look like this:
Lump Sum
Month 1
Month 2
Month 3
Month 4
Month 5
Shares Purchased
10
0
0
0
0
Total Shares
10
10
10
10
10
Market Price
$100
$110
$90
$80
$95
Value
$1,000
$1,100
$900
$800
$950
In this scenario, you used your $1,000 to purchase 10 shares (each priced at $100) in month 1. By month 5, the price of those shares had dropped by 5% to $95, which meant that the total value of your investment had also dropped by 5%, from $1,000 to $950. Pretty straightforward.
However, an interesting thing happens if you follow a DCA strategy.
DCA
Month 1
Month 2
Month 3
Month 4
Month 5
Shares Purchased
2.0
1.8
2.2
2.5
2.1
Total Shares
2.0
3.8
6.0
8.5
10.6
Market Price
$100
$110
$90
$80
$95
Value
$200
$420
$544
$683
$1,011
In this scenario, you break up your $1,000 into five $200 investments you make each month regardless of the share price. In month 1, you can buy 2 shares with your $200 ($200 investment divided by the $100 share price). In month 2, you can only buy 1.8 shares ($200/$110) because the share price has risen to $110. In month 3, you can buy 2.2 shares ($200/$90) because the share price has fallen to $90, and so on.
Because you can buy more shares when prices are lower, by the end of the 5 months, you would end up with 10.6 shares instead of just 10. This means that the value of your portfolio would be $1,011, a 1% increase on your total investment of $1,000.
In other words, even though the company’s stock price is now lower than 5 months ago, if you followed a DCA strategy you’d still be up! Pretty amazing, right?
The Foolish bottom line
In this article, I covered a few strategies you can adopt to reduce your portfolio’s volatility. You can diversify your portfolio to hedge against certain macroeconomic risks, you can invest more heavily in defensive shares to protect your portfolio against a downturn, and you can dollar-cost average so that you smooth your returns out over time.
However, the right strategy for you will depend on your risk tolerance and personal circumstances. Carefully consider your investing goals and objectives before investing or changing your portfolio strategy. If in doubt, speak to a financial advisor.
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Motley Fool contributor Rhys Brock 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. The Motley Fool Australia has positions in and has recommended Coles Group and Telstra 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.
Mesoblast Ltd (ASX: MSB) shares have been among the best performers on the Australian share market this year.
Since the start of the year, the allogeneic cellular medicines developer’s shares have risen an astonishing 230%.
This has been driven by optimism that its stem cell therapies may finally be granted approval by the US Food and Drug Administration (FDA) following years of knock backs, cash burn, and capital raisings.
Interestingly, despite more than tripling in value in 2024, one of the company’s insiders continues to snap up Mesoblast’s shares. This appears to be an indication that this board member believes its shares are still good value even after this rise.
Insider buys Mesoblast shares again
According to change of director’s interests notices, Mesoblast’s chief medical officer, Dr Eric Rose, has made two large purchases of shares in the last two weeks.
The first was made on 30 April and saw Dr Rose spend US$142,318.35 on the company’s NASDAQ listed shares. He picked up 21,428 American Depositary Shares (ADS) for an average of US$6.6417 per share.
The chief medical officer then followed that up with a US$151,207.83 purchase on 8 May. This saw Dr Rose snap up 19,734 ADS for an average of US$7.6623 per share.
Should you buy shares?
One leading broker that would approve of these purchases is Bell Potter.
Last month, its analysts retained their speculative buy rating on Mesoblast’s shares with a vastly improved price target of $1.40 (from 58 cents). This implies potential upside of approximately 36% for investors from current levels.
The broker is feeling positive about the company’s Remestemcel product and believes that approval could be around the corner for the treatment of children with steroid refractory acute graft versus host disease (SR a GvHD). Bell Potter explains:
Our best estimate for approval of Remestemcel is mid August 2024. The planned adult study in GvHD has for the moment been postponed pending the outcome of the resubmitted BLA. Valuation is increased from $0.58 to $1.40 eflecting significant changes to revenue forecasts bought about by renewed confidence for a prospective approval for Remestemcel in Paediatric GvHD later this year. A first approval may represent a gateway to a series of label expansions in the ensuing period as reflected in the share price movement in recent days.
Though, it is worth remembering that its speculative buy rating means that Mesoblast shares may only be suitable for investors with a high tolerance for risk.
Should you invest $1,000 in Mesoblast Limited right now?
Before you buy Mesoblast Limited shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Mesoblast Limited wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better 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 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.