When investing through a self-managed super fund (SMSF), you want ASX dividend shares that have dependable cash flows and businesses need to be resilient enough to operate through different economic conditions.

While no dividend is ever guaranteed, some ASX shares are far better positioned than others to keep paying shareholders over time.

With that in mind, here are three ASX dividend shares that could suit investors building an SMSF portfolio focused on long-term income.

Lottery Corporation Ltd (ASX: TLC)

The Lottery Corporation stands out as one of the most defensive income plays on the ASX.

As the operator of Australia’s leading lottery brands, its earnings are largely insulated from economic cycles. Ticket sales tend to remain steady regardless of whether consumer confidence is high or low, which supports predictable cash flows.

What makes Lottery Corporation particularly attractive for an SMSF is its capital-light business model. With minimal reinvestment requirements, a large portion of earnings can be returned to shareholders as dividends. This has allowed the company to establish itself as a consistent income payer since its demerger.

For investors seeking stability and visibility around future distributions, Lottery Corporation is hard to ignore.

Sonic Healthcare Ltd (ASX: SHL)

Another ASX dividend share that could be a top pick is Sonic Healthcare.

It is a global leader in pathology and diagnostic imaging, operating across Australia, Europe, and the United States. Demand for diagnostic testing does not disappear during economic downturns, which gives Sonic Healthcare a defensive earnings profile.

While its earnings surged during the pandemic due to testing demand and have since normalised, Sonic continues to generate strong cash flow from its core operations. Its diversified geographic footprint and disciplined approach to acquisitions also help smooth earnings over time.

For SMSF investors, Sonic provides exposure to healthcare growth alongside a history of dependable dividends.

Woolworths Group Ltd (ASX: WOW)

Finally, Woolworths could be an ASX dividend share to buy for an SMSF.

As Australia’s leading supermarket operator, Woolworths benefits from everyday consumer demand. Regardless of what is happening in the local or global economy, Australian households still need to spend on food and essential items. This supports resilient revenue and cash generation.

This steady operating performance underpins its ability to pay regular dividends to shareholders.

For an SMSF, Woolworths offers a combination of defensive earnings, scale advantages, and reliable income.

The post 3 strong ASX dividend shares to buy for your SMSF appeared first on The Motley Fool Australia.

More reading

• 3 quality ASX healthcare shares worth buying now
• 3 ASX 200 blue chip shares built for the long term
• Buying Woolworths shares? Here’s how the supermarket is tapping into the AI revolution
• Smart investors are betting on this ASX passive income stock
• 3 defensive ASX dividend shares to buy with $10,000

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

Xero Ltd (ASX: XRO) shares closed 0.36% higher on Tuesday afternoon, at $108 a piece. So far in 2026 the shares have dropped 4.89%. They’re currently trading 34.71% below levels this time last year.

From US-acquisition news which spooked investors to lower-than-expected financial results, the company faced strong headwinds in 2025. But I think the reaction was way overdone and the level of investor sell-off was unfounded.

Right now, I think the cloud-based, accounting software company is a screaming buy. And here are three reasons why.

1. The business is stable

Despite Xero’s share price sell-off last year, the business is stable and well-positioned for an uptick in growth. 

There is a global shift of small to medium businesses moving towards cloud-based accounting software, and Xero is poised to capture any increase in demand.

The company works on a software-as-a-service (SaaS) subscription-based model which offers monthly plans at various price points. This means the software is “sticky” and has a high retention rate. This type of business model means Xero has a stable recurring revenue, global exposure and profitability. It also means it has a scalable software platform which doesn’t rely on consumer spending pressure (in other words, it has low downside risk).

The company has also previously demonstrated that it can remain resilient and grow through various stages of economic cycles.

2. The business is actively expanding

Xero is also constantly expanding the products it can offer its clients. In 2025 the company added features like online bill payments, better analytics, and customisable home pages to make its software even more appealing to customers.

Although its Melio acquisition last year didn’t sit well with Aussie investors, the move is part of Xero’s strategy to grow its US business. By integrating a US payments platform with its current accounting software, it could open up new revenue streams for the business and accelerate its presence in the US small-business market.

Xero is also investing in automation and AI tools to make its software more valuable to small businesses. This is a key focus for the business in 2026.

3. Xero shares could double in 2026

I’ve said previously that I’m quietly confident that Xero shares could double in value in 2026, or go even higher.

TradingView data shows that most analysts (11 out of 14) are also bullish on Xero shares over the next 12 months. 

The maximum target price is $228.85 a piece, which implies a huge 111.90% upside for investors at the time of writing.

UBS is positive on the medium-term growth outlook for Xero and believes the current share price is an “attractive buying opportunity”. The broker has a $194 price target on the shares.

Macquarie has an outperform rating and $228.90 price target on the shares, saying the company is well-positioned for growth in the US.

The post 3 reasons Xero shares are a screaming buy right now appeared first on The Motley Fool Australia.

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• Here are my top 10 ASX stocks for 2026

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

These 3 ASX healthcare shares have all had their fair share of issues over the past few months.

Investors walked out, and as a result the share prices of CSL Ltd (ASX: CSL), Sigma Healthcare Ltd (ASX:SIG) and Sonic Healthcare Ltd have been under pressure.

But it’s not all pain and pills. Brokers see potential 15-35% upside for these quality ASX healthcare shares.

Let’s go and check them out.

CSL Ltd (ASX: CSL)

CSL, the $85 billion healthcare heavyweight, has had a proper clanger of a year. The share price slid as investors panicked over high plasma collection costs, sluggish margin recovery and patchy vaccine demand.

For a stock once treated like a superannuation heirloom — buy it, forget it, brag about it — the stumble has been confronting.

But here’s the plot twist. This ASX healthcare share hasn’t forgotten how to grow. Plasma volumes are ticking up, cost pressures are easing and management insists margins can recover with a bit of patience and fewer market tantrums.

This year doesn’t need to be heroic. It just needs to be less disappointing for sentiment to flip. Yes, execution matters and margins must recover.

Still, analysts remain bullish, tipping an average 12-month price target of $232.15. That points to a 34%, suggesting the market may have overdone the exodus.

Sigma Healthcare Ltd (ASX: SIG)

Sigma Healthcare hasn’t been feeling the love lately — and it’s not hard to see why.

First up: merger mayhem. The Chemist Warehouse tie-up sent integration and transaction costs through the roof, smashing near-term profits and rattling investors.

Then there’s the hangover from past mistakes. A bungled ERP rollout a few years back snarled supply chains, drove pharmacies into competitors’ arms, and bruised the credibility of the ASX healthcare share.

But it’s not all bad news. The Chemist Warehouse merger supercharges Sigma’s scale, plugging wholesale, distribution and retail into one powerful machine. If the synergies land, earnings could follow.

Tailwinds help too. Australia’s ageing population and steady demand for health products keep the long-term story intact.

Analysts see strong scale, improved EBITDA and a growing network which give the ASX healthcare share defensive cash flows and growth runway. A rare thing in healthcare retail.

Brokers predict 12-month average price targets of around $3.30, which implies a potential gain of almost 15% above current levels of $2.90.

Sonic Healthcare Ltd (ASX: SHL)

The 7^th largest ASX healthcare share has had a rollercoaster run. Investors sulked after COVID testing faded and earnings guidance was modest, but that’s exactly why the value hunters might sniff opportunity.

Expectations are now realistic, maybe even a little too low. Some fair-value models suggest Sonic Healthcare could be 30–40 % undervalued relative to the current price, implying a fair value above $30+ if growth plays out.

The stock currently draws a mix of hold and buy views, with price targets back above recent levels and potential recovery from recent acquisitions and synergy boosts.

Weakness? Margins still feel the hangover from lower testing demand and mixed sentiment from brokers, so Sonic Healthcare isn’t a shiny growth rocket. The ASX healthcare share is more a steady-eddy play.

Bell Potter has assigned a buy rating and a $33.30 price target. Based on the share price of $23.03 at the time of writing, this implies a potential upside of 32% for investors over the next 12 months.

Bell Potter is on the bullish side, as the average 12-month target price is $26.73. However, that still points to 18% upside. It could bring the total earnings in 2026, including a dividend yield of 5.2%, to well over 20%.

The post 3 quality ASX healthcare shares worth buying now appeared first on The Motley Fool Australia.

More reading

• 3 strong ASX dividend shares to buy for your SMSF
• The 3 stocks I’d buy and hold into 2026
• Why I think CSL and DroneShield shares are buys for 2026
• 3 ASX 200 shares I’d trust if I couldn’t check my portfolio for a year
• How I’d invest $50,000 across ASX shares today

Motley Fool contributor Marc Van Dinther 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 recommended CSL and Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Zip Co Ltd (ASX: ZIP) is a share I think many investors still view through the lens of its past rather than its present.

For years, Zip was defined by rapid expansion, heavy losses, and an aggressive growth-at-all-costs mindset that eventually caught up with it when market conditions tightened. That history explains why some investors remain cautious today.

But as we move into 2026, I think the Zip investment case looks very different. It is no longer an early-stage disruptor. Instead, it is a profitable growth machine that has moved down the risk scale. And that is exactly why I see meaningful upside if it continues to execute its strategy successfully.

Earnings growth is now doing the talking

The biggest change at Zip in recent times is that its losses are now firmly behind it and its earnings are growing rapidly.

Consensus estimates point to earnings per share (EPS) growing 27% to 7.9 cents in FY26, then rising 53% to 12.1 cents in FY27. That is not speculative growth. It reflects a business that has moved past survival mode and into a phase where operating leverage is becoming visible.

While Zip still trades at a premium multiple on near-term earnings, that premium narrows materially when viewed through the lens of FY27. At its current share price of $3.28, it is commanding an FY27 PE ratio of 27 times earnings.

For a company still operating in a structurally growing digital payments market, I think that valuation looks increasingly reasonable, provided growth is delivered as expected.

The key point for me is that Zip’s growth is now coming from a cleaner base. It is driven by better credit performance, more disciplined customer acquisition, and a sharper focus on profitable regions.

The business model is more disciplined

Zip today is a more focused business than it was a few years ago.

Management has pulled back from less attractive markets, tightened underwriting standards, and prioritised returns over raw transaction growth. That may have reduced headline growth rates, but it has significantly improved the quality of earnings.

Loss rates have stabilised, cost control has improved, and the company is extracting more value from its existing customer base rather than relying on constant expansion. In my view, that makes Zip a far more investable business than it was during its peak hype phase.

This discipline also reduces downside risk. Zip is not immune to economic cycles, but it is better positioned to manage them.

Scale is starting to work in Zip’s favour

One of the reasons Zip struggled in the past was that it had not yet reached a scale where fixed costs could be absorbed efficiently.

That dynamic is now changing.

As transaction volumes grow and revenue scales, incremental margins are improving. This is where the earnings leverage becomes important. Zip does not need explosive growth to deliver strong earnings progression. It simply needs steady volume growth combined with continued cost discipline.

If that happens, profitability can increase faster than revenue, which is exactly what long-term investors want to see.

A more credible long-term growth profile

Buy now, pay later is no longer a novelty. It is a mature and competitive market.

But that does not mean growth has disappeared. It means the winners will be those that combine scale, risk management, and brand relevance. Zip remains a well-recognised platform with a meaningful customer base and merchant network, particularly in its core markets.

Rather than chasing every opportunity, Zip now appears focused on defending and deepening its strongest positions. I think that approach gives it a more credible long-term growth profile than many investors assume.

The risk is still there, but the balance has improved

Zip shares are not risk-free.

Economic conditions, consumer credit quality, and competitive pressures will always influence performance. And any setback in execution could weigh on sentiment.

But compared to previous years, the risk-reward balance looks more attractive. The business is profitable, earnings are growing, and the valuation is no longer pricing in perfection.

Foolish takeaway

I think Zip shares offer major upside in 2026 because the business has finally aligned growth with earnings discipline.

At a share price of $3.28, if management continues to execute and earnings grow toward FY27 expectations, I believe the market could reassess what it really is worth. For me, that’s a lot more than its current valuation.

The post Why I think Zip shares offer major upside in 2026 appeared first on The Motley Fool Australia.

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

ASX exchange-traded funds (ETFs) are incredibly popular with Aussie investors.

They provide great diversification, and are an easy vehicle for gaining exposure to international shares.

The latest available data from Betashares shows inflows into ASX ETFs totalled $4.3 billion in November.

That was the fifth consecutive month of inflows above $4 billion.

Betashares says ASX ETFs now have a record $324.9 billion in funds under management, up 33.8% in 12 months.

Here are three ASX ETFs that provided great returns to investors last year.

3 ASX ETFs that produced excellent returns in 2025

Betashares Video Games and Esports ETF (ASX: GAME)

Last year, GAME ETF lifted 28% in value and delivered a total return, including dividends, of 32%.

GAME ETF closed out the year at $17.51 apiece.

The GAME ETF invests in 37 stocks.

The top holdings are Electronic Arts, NetEase, Take-Two Interactive Software, and Tencent.

GAME ETF seeks to track the performance of the Nasdaq CTA Global Video Games & Esports Index.

Most of its investments are in interactive home entertainment devices and facilities.

Other major allocations include interactive media and services, and leisure products.

The management fee is 0.57% per year.

Betashares Australian Resources Sector ETF (ASX: QRE)

In 2025, QRE ETF ascended 30% and delivered a total return of 34%.

QRE ETF finished the year at $8.81 per unit.

ASX QRE holds 43 ASX shares with a 34% weighting to BHP Group Ltd (ASX: BHP).

QRE also invests in gold, copper, lithium, mineral sands, rare earths producers, as well as a few energy shares.

The top holdings are BHP, Rio Tinto Ltd (ASX: RIO), Woodside Energy Group Ltd (ASX: WDS), and Fortescue Ltd (ASX: FMG).

The management fee is 0.34% per annum.

Global X Defence Tech ETF (ASX: DTEC)

Over 2025, DTEC ETF returned 64% and finished the year at $17.51 apiece.

That 64% return was all capital growth as the ETF has not yet paid a dividend since its launch in October 2024.

Global defence spending is soaring amid ongoing geopolitical tensions.

This led to significant price growth for stocks in aerospace and defence last year.

Sara Pineros, a Quantitative Analyst at S&P Dow Jones Indices, said:

Aerospace & Defence ranked as the second-highest growth sector among the S&P Select Industries, posting a significant 46.8% increase, largely driven by rising geopolitical tensions worldwide.

ASX DTEC invests in 37 shares and seeks to track the Global X Defense Tech Index before fees.

The ETF’s top holdings are Lockheed Martin Corp, Rheinmetall AG, RTX Corp, and Palantir Technologies Inc.

The annual management fee is 0.5%.

The post 3 ASX ETFs that returned 32% to 64% in 2025 appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Palantir Technologies, RTX, and Take-Two Interactive Software. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Electronic Arts, Lockheed Martin, NetEase, and Rheinmetall. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The iShares Global 100 ETF (ASX: IOO) rose by 16.47% to $188.06 per unit, and produced a total return of 17.87% last year.

ASX IOO outperformed some of the most popular exchanged-traded funds (ETFs) holding international shares.

For example, the iShares Core S&P 500 AUD ETF (ASX: IVV) rose 8.24% and delivered a total return of 10.13%.

The Vanguard MSCI Index International Shares ETF (ASX: VGS) rose 9.81% and gave a total return of 13.34%.

It’s worth noting that the indices that these ETFs track returned more than this, but the stronger AUD against the USD reduced the net outcome for ASX ETF holders.

We explain more about this impact here.

What makes IOO ETF unique?

IOO ETF provides Aussies with an easy way of investing in large-cap stocks all over the world.

Many investors prefer large-caps because they are larger, more established companies that typically pay reliable dividends.

IOO provides exposure the 100 largest companies in developed and emerging markets by tracking the S&P Global 100 Index.

However, as most of the world’s biggest companies are US businesses, the geographic diversification provided by IOO is limited.

Just over 80% of IOO’s investments are US companies.

The next biggest geographic exposures are the United Kingdom 4%, Switzerland and Germany at 3% each, France 2%, Japan 2%, and China and the Netherlands at 1% each.

IOO also has a narrow sector diversification, given most of the largest listed companies in the US are in the technology arena.

About 44% of IOO ETF’s investments are in tech, followed by 11% in communications, 10% in financials, 9% each in consumer discretionary and healthcare, 6% in consumer staples, and 5% in industrials.

The top six holdings are Nvidia Corp (NASDAQ: NVDA) at 12%, Apple Inc (NASDAQ: AAPL) at 10%, Microsoft Corp (NASDAQ: MSFT) at 9.5%, Amazon.com, Inc. (NASDAQ: AMZN) at 6.5%, Alphabet Inc Class A (NASDAQ: GOOGL) at 5%, and Broadcom Inc (NASDAQ: AVGO) at 4%.

Other global businesses that IOO invests in include Samsung Electronics Co Ltd (FRA: SSU), Toyota Motor Corp (TYO: 7203), Mitsubishi UFJ Financial Group Inc (FRA: MFZ), and Nestle SA (FRA: NESN).

The index that IOO tracks, the S&P Global 100 Index, returned 27.16% last year, but as stated earlier, the currency impact reduced that to 17.87% for Aussie investors.

Last week, IOO ETF paid a final 2025 distribution of 56.02 cents per unit.

Investors who chose to reinvest their dividends via the distribution reinvestment plan (DRP) paid $187.62 per unit.

The post Own IOO ETF? Here’s what happened with your investment in 2025 appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in Vanguard Msci Index International Shares ETF and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom and Nestlé and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Microsoft, Nvidia, Vanguard Msci Index International Shares ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

For investors who prioritise income, consistency can matter just as much as the headline yield. 

That is why monthly income ETFs continue to grow in popularity with Australians.

When used appropriately, they can smooth portfolio income and reduce reliance on selling assets to fund expenses.

Here are two income-focused ASX ETFs that I think stand out for investors seeking regular distributions, with yields currently above the 5% level.

Betashares Australian Dividend Harvester Active ETF (ASX: HVST)

The Betashares Australian Dividend Harvester Active ETF is designed specifically for investors who want high and regular income from Australian equities.

The HVST ETF follows a rules-based dividend harvesting strategy. Its portfolio is primarily drawn from the largest 100 shares on the ASX, screened for companies expected to deliver higher gross dividend and franking outcomes over the next period. The portfolio is rebalanced approximately every three months to reflect updated dividend expectations.

What makes the Betashares Australian Dividend Harvester Active ETF different from a traditional Australian shares ETF is its clear income objective. The fund aims to deliver an income stream that exceeds the net income yield of the broader Australian share market over time, with distributions paid monthly rather than semi-annually.

At present, the ETF has a trailing dividend yield of around 5.8%. That yield will vary over time and is not guaranteed, but it highlights why the fund has attracted attention from income-focused investors.

VanEck Emerging Income Opportunities Active ETF (ASX: EBND)

The VanEck Emerging Income Opportunities Active ETF takes a very different approach to income.

Rather than focusing on Australian equities, this ETF provides exposure to a globally diversified portfolio of emerging market bonds and currencies. 

The fund invests across government, semi-government, and corporate bonds in emerging economies, with the goal of delivering attractive income and total returns over the medium to long term.

The VanEck Emerging Income Opportunities Active ETF is actively managed and benchmark-unaware, which means the portfolio managers can take high-conviction positions rather than simply track an index. That flexibility is important in emerging markets, where credit quality, currency movements, and geopolitical risks can vary widely.

Currently, the VanEck Emerging Income Opportunities Active ETF has a yield of around 6.2%. As with all bond funds, that yield can change depending on market conditions, interest rates, and portfolio positioning. Emerging market debt also carries higher risk than developed market bonds, including credit risk and political risk.

Why these two stand out to me

What I like about the Betashares Australian Dividend Harvester Active ETF and the VanEck Emerging Income Opportunities Active ETF is that they approach income from different angles.

The HVST ETF focuses on Australian equities and dividend harvesting, which suits investors who value franking credits and familiarity. The EBND ETF looks offshore, tapping into higher-yielding emerging market bonds to generate income that is less tied to the Australian economic cycle.

Neither ETF is risk-free, and yields should never be the only consideration. But for investors seeking monthly income with diversification across asset classes and geographies, these are two ETFs I think are worth a closer look.

As always, position sizing and portfolio balance matter. Used thoughtfully, monthly income ETFs like these can play a useful role in delivering regular cash flow without sacrificing diversification.

The post 2 spectacular monthly income ETFs with yields up to 6% appeared first on The Motley Fool Australia.

More reading

• Own Betashares ASX ETFs? Here’s your next dividend

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

One of the most common phrases when it comes to investing in (ASX) shares is that past performance is not a reliable indicator of future performance.

On a surface level, I certainly think it’s wise to be cautious about extrapolating great returns to continue over the next year or so. For example, the Telstra Group Ltd (ASX: TLS) share price rose by 20% in 2025 and I’d suggest it’s unlikely (but not impossible) that the huge ASX telecommunication share will rise by another 20% this year.

However, past business performance could be very informative of future returns. Let me explain what I mean.

Winners tend to continue winning

There are not many businesses that have a track record of delivering very strong returns over the long-term.

Those exceptional companies have managed to deliver such strong performance, likely because they have market-leading products and services, as well as compelling economics.

These appealing advantages don’t disappear overnight, if ever. In my view, the great winners tend to continue winning over the years because what has helped them thus far will mean they can continue their track record.

Just think about names like Xero Ltd (ASX: XRO), Wesfarmers Ltd (ASX: WES), Breville Group Ltd (ASX: BRG), Nick Scali Ltd (ASX: NCK) and TechnologyOne Ltd (ASX: TNE). Each of them have long-term track records of executing their strategies successfully.

So, while we can’t know for sure what their future share price returns will be (particularly in the short-term), I do think it’s clearer whether a business will continue growing its operations and earnings.

Cyclical opportunities

Investors can use volatility to their advantage, particularly when it comes to ASX shares with cyclical earnings.

Commodities are a good example – if a resource price falls then that may lead to some investors selling and the share price falling. However, resource prices don’t fall forever. At certain levels, higher cost producers may start entering loss-making territory and lead to them turning off production, helping the supply-demand balance and potentially helping spark a recovery in the resource price.

That’s why it can be fruitful to invest in ASX mining shares when prices are down heavily and conditions are weak. Investors can buy low, hoping to benefit from a turn in the cycle.

It can be a similar story when it comes to other cyclical sectors such as retail.

But, investors should also be cautious about overpaying for cyclical names when conditions are positive. That’s why I’m being cautious about ASX mining shares like Fortescue Ltd (ASX: FMG) and Rio Tinto Ltd (ASX: RIO) at the current valuations. 

The post Why I look at past performance of ASX shares to help think about the future performance outlook appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Breville Group and Technology One. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One, Wesfarmers, and Xero. The Motley Fool Australia has positions in and has recommended Telstra Group and Xero. The Motley Fool Australia has recommended Nick Scali, Technology One, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) was on form and charged higher. The benchmark index rose 0.55% to 8,808.5 points.

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

ASX 200 to edge higher

The Australian share market looks set for a subdued session on Wednesday following a poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 2 points higher this morning. In late trade in the United States, the Dow Jones is down 0.8%, the S&P 500 is down 0.3%, and the Nasdaq is 0.3% lower.

Oil prices rise

ASX 200 energy shares including Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a good session after oil prices jumped overnight. According to Bloomberg, the WTI crude oil price is up 2.6% to US$61.01 a barrel and the Brent crude oil price is up 2.2% to US$65.31 a barrel. This was driven by news that Donald Trump cancelled meetings with Iran and told protesters that help is on the way.

Hold Codan shares

After a huge gain over the past 12 months, Codan Ltd (ASX: CDA) shares are now fairly valued according to analysts at Bell Potter. The broker has retained its hold rating with an increased price target of $36.70 (from $27.80). It said: “We believe CDA shares trade at fair value on 33x EV / EBIT (59% above its 2-year average) amidst improving operating momentum and improving outlook in both segments. Given the seasonality evident in the Metal Detection business we see potential for a FY26e Metal Detection revenue upgrade if positive commentary is given at the 1H26e result.”

Gold price softens

ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a subdued session on Wednesday after the gold price softened. According to CNBC, the gold futures price is down 0.3% to US$4,601.5 an ounce. The precious metal hit a record high on increased US Fed interest rate cut bets before easing back.

Buy Liontown shares

Lithium miner Liontown Ltd (ASX: LTR) could be in the buy zone according to Bell Potter. In response to stronger than expected lithium prices, the broker has retained its buy rating with a vastly improved price target of $2.48 (from $1.52). It said: “Under our updated price outlook, LTR deleverages from net debt of $274m at 30 September 2025 to a net cash position by the end of 2026. EPS changes as a result of these upgrades are: now +2.3cps (previously -2.3cps); FY27 +230%; & FY28 +106%. LTR’s 100% owned Kathleen Valley lithium project is highly strategic in terms of scale, long project life and location in a tier-one mining jurisdiction.”

The post 5 things to watch on the ASX 200 on Wednesday 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.

If you have $20,000 in savings, it’s a huge achievement. Too many of us don’t have enough cash squirrelled away to be in a position to comfortably invest surplus cash into the markets. Hopefully, that $20,000 is currently sitting in a high-interest savings account and generating passive income with an interest rate of about 4%.

But even if it is, there is an alternative to cash savings that could get you an even greater bang for your buck. That alternative is investing in ASX shares, of course.

We have decades of data that consistently show investing in shares is the most likely way to maximise your return on investment. Indeed, back in August, we looked at how $10,000 invested in ASX shares back in June of 1995 was able to turn into $143,786 by 30 June 2025. In contrast, that $10,000 would have grown into just $33,677 if it had been left in the bank.

So if you want to build wealth as quickly as possible, shares easily trump cash. But today, let’s discuss how you can turn $20,000 into a passive income stream worth $10,000 every year by investing in ASX shares.

 How to turn cash into passive income with ASX shares

Passive income from the ASX shares comes in the form of dividends. Most ASX shares pay some kind of dividend. But only the highest quality companies tend to be able to increase their dividends above the rate of inflation year in and year out.

Washington H. Soul Pattinson and Co Ltd (ASX: SOL) is one of those shares. This investing house has the best dividend streak on the ASX, having delivered an annual dividend hike every single year since 1998.

On the surface, its dividend yield doesn’t look too impressive today – sitting at about 2.7% at present. If you invested $20,000 into Soul Patts stock at current pricing, you could expect to receive an annual passive income stream worth about $540.

However, Soul Patts has delivered very healthy dividend growth over the past 28 years. Between 1998 and 2025, the company increased its annual dividends by an average rate of 10.5% per annum. Between 2021 and 2025,  the average was 13.5% per annum.

So let’s, for a moment and for argument’s sake, assume that this company will be able to keep that latter growth rate going forward, which is, of course, not guaranteed. If that ends up being the case, our investor’s $540 in annual passive income would grow to over $1,000 in six years, then over $2,000 by year 12.

Assuming no additional share purchases or dividend reinvestment, it would take just over 24 years to hit $10,000 in annual passive income. That’s obviously a long time to wait. But it can be sped up by buying more shares along the way, and by ticking that dividend reinvestment plan box. And remember, your initial $20,000 investment would have likely increased dramatically. Far more than it would have done sitting in the bank anyway.

The post $20,000 in savings? Here’s how that could become $10,000 a year in passive income appeared first on The Motley Fool Australia.

More reading

• Don’t want to rely on your wage? Build a second income with these ASX shares
• 10 ASX shares I’d buy with $10,000 in 2026 to beat the market
• Where to invest $7,000 in Janaury
• Here’s my number 1 passive income stock for 2026
• Where I’d invest $10,000 in 2026 in ASX shares aiming to beat the market

Motley Fool contributor Sebastian Bowen has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.