On Wednesday, the S&P/ASX 200 Index (ASX: XJO) was out of form and dropped into the red. The benchmark index fell 0.3% to 7,314.5 points.

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

ASX 200 expected to fall again

The Australian share market is expected to fall again on Thursday following a relatively poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 9 points or 0.1% lower this morning. In late trade in the United States, the Dow Jones is down 0.3%, the S&P 500 has fallen 0.25% and the NASDAQ is flat.

Rio Tinto full-year results

The Rio Tinto Ltd (ASX: RIO) share price will be one to watch on Thursday. That’s because the mining giant released its full-year results after the market close on Wednesday and reported a 13% decline in revenue to US$55,554 million and a 41% reduction in net profit after tax to US$12,420 million. This was short of expectations and may explain why its shares are down 3% on the NYSE.

Oil prices sink

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a tough session after oil prices sank on Wednesday night. According to Bloomberg, the WTI crude oil price is down 3.2% to US$73.95 a barrel and the Brent crude oil price is down 3% to US$80.58 a barrel. Traders were selling oil on demand concerns.

Qantas results

The Qantas Airways Limited (ASX: QAN) share price will be on watch when the airline operator releases its half-year results. The Flying Kangaroo has guided to an underlying profit before tax of $1.35 billion to $1.45 billion for the half. The company has also been tipped by Morgans to announce a $400 million share buy-back.

Gold price falls

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a subdued session after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.4% to US$1,835.1 an ounce. The precious metal dropped in response to the release of US Federal Reserve minutes.

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

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More reading

• Rio Tinto share price on watch amid FY22 results
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• 3 reasons I prefer buying ASX shares over an investment property
• Why Origin, Santos, Service Stream, and WiseTech shares are racing higher
• The Santos dividend just rocketed by 78%. Here’s the lowdown

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

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If you want to become a stock market millionaire, I have some good news for you.

Growing a million-dollar portfolio is something that anyone can do if they have a combination of time, patience, and sufficient disposable income to invest.

Over the long term, the stock market has generated an average total return of 10% per annum.

And while past performance is not a guarantee of future returns, it would be disappointing if the stock market didn’t generate the same level of returns in the future. In light of this, we’re going to base our calculations on this return.

Building a million-dollar stock portfolio with ASX shares

If you’re able to build a portfolio of ASX shares that matches the market return, then investing $5,000 a year in the share market would grow to the million-dollar mark after 31 years.

If you would like to get there sooner, then you would have to increase your annual contributions.

For example, doubling your investment to $10,000 per annum, you would reach your goal after just over 24 years with an average 10% per annum return.

But what if you could beat the market Warren Buffett-style?

Well, if you can beat the market by identifying cheap ASX shares that provide even greater than average returns. Let’s say 15% per annum. Then your journey to $1 million would be given a boost.

Investing $5,000 each year would turn into one million almost 8 years earlier after just over 23 years. Whereas investing $10,000 per year would get you there in just under 19 years, which is approximately 5 years ahead of schedule.

Though, it is worth noting that beating the market consistently over a long period is a task that few achieve. But there’s nothing to stop you from trying!

The Buffett-inspired VanEck Morningstar Wide Moat ETF (ASX: MOAT) could be worth considering.

It gives investors exposure to a diversified portfolio of attractively priced US companies with sustainable competitive advantages.

The index that this ETF tracks has beaten the market over the last decade with a 15% per annum return and has generated an average annual return of 18.5% since inception.

Whatever you choose to do, the main thing is to make a plan and stick with it, and let compounding work its magic.

The post I’d aim for a million buying just a few cheap ASX shares! appeared first on The Motley Fool Australia.

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More reading

• 2 ASX ETFs I’d buy for my child for the long term
• 3 ASX shares that could create lasting generational wealth
• I think this ETF is one of the best to buy on the ASX
• Forget term deposits! I’d listen to Warren Buffett and invest $250 a month to try to retire rich
• Top ASX ETFs to buy in February 2023

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

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With earnings season in full swing, brokers have been running the rule over a large number of ASX 200 shares.

Two blue chip shares that have been named as post-results buys are listed below. Here’s what you need to know about these shares:

Goodman Group (ASX: GMG)

The first blue chip ASX 200 share that has been tipped as a buy following its results release is Goodman.

It is leading industrial property company with a world class portfolio of assets that are in-demand with end users across the globe.

In response to its strong half-year results, Citi has retained its buy rating and $24.00 price target. The broker believes that strong demand will drive earnings growth for the foreseeable future. It commented:

GMG’s 1H23 result highlighted the extent of tailwinds still existing for industrial property which make for a strong earnings growth outlook not just this year but into multiple years in the future. Higher than expected FUM, record development margins this period (~100%) and increased potential for rental reversion should support overall earnings growth into the future. Debt costs may be higher but lower gearing ensures limited impact to this. We believe GMG will continue to outperform given its high-quality exposure and strong earnings growth potential in an uncertain macro environment.

SEEK Limited (ASX: SEK)

Another blue chip ASX 200 share that has been named as a buy this week is Seek.

It is of course the job listings giant behind the eponymous Seek website, as well as several international equivalents.

Morgans was pleased with its performance in the first half and has recommended it as a post-results buy. Its analysts commented:

SEK’s 1H23 result was ~2% ahead of Visible Alpha consensus at the topline (revenue of ~A$627m, +21% on pcp), with EBITDA of ~A$283m (+13% on pcp) in line and NPAT excluding significant items (A$135m, +9% on pcp) ~4% ahead. It was broadly a positive result, in our view, however job ad volume growth moderating in 2H23 (particularly ANZ), whilst not unexpected, looks to be a factor in guidance being set at the lower end of previously flagged ranges.

Morgans has retained its add rating with a trimmed price target of $28.40.

The post These blue chip ASX 200 shares are post-results buys: experts appeared first on The Motley Fool Australia.

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More reading

• Seek share price swings wildly amid first-half results release
• 3 excellent ASX 200 shares to buy and hold for a decade: analysts
• How to generate passive income the Warren Buffett way with ASX shares
• 2 ASX 200 stocks on the move following earnings updates
• Why experts say these ASX 200 blue chip shares are buys

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

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The Rio Tinto Ltd (ASX: RIO) share price will be one to watch on Thursday.

That’s because the mining giant has just released its full-year results after the market close.

Rio Tinto share price on watch following results release

• Revenue down 13% to US$55,554 million
• Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) down 30% to US$26,272 million
• Net profit after tax down 41% to US$12,420 million
• Fully franked final dividend down 46% to US$2.25 per share

What happened during FY 2022?

For the six months ended 31 December, Rio Tinto reported a 13% decline in revenue to US$55,554 million and a 41% reduction in net profit after tax to US$12,420 million.

Management advised that this reflects the movement in commodity prices, the impact of higher energy and raw materials prices on its operations, and higher rates of inflation on operating costs and closure liabilities.

In addition, the company recorded an effective tax rate on net earnings of 30.9% compared with 27.7% in 2021, with the increase being primarily due to the $0.8 billion write down of deferred tax assets in the United States.

In light of this profit decline, the mining giant’s board has declared a final dividend of US$2.25. This brings its full-year dividend to US$4.92, which is down 38% from US$7.93 per share a year earlier.

How does this compare to expectations?

According to a note out of Goldman Sachs, its analysts were expecting Rio Tinto to report underlying EBITDA of US$26.8 billion versus the consensus estimate of US$26.7 billion.

On the bottom line, Goldman was forecasting a net profit after tax of US$12.9 billion, compared to the consensus estimate of US$13.7 billion.

Finally, it was expecting this to lead to a fully franked full year dividend of US$4.64 per share, whereas the market was expecting a US$4.92 per share dividend.

As you can see above, Rio Tinto has missed on these earnings metrics but is in-line with the market’s dividend estimate.

Management commentary

Rio Tinto’s CEO, Jakob Stausholm, was pleased with the work the company did in FY 2022. He said:

We are building a stronger Rio Tinto and delivering against our four objectives. Our operational performance has improved, as evidenced by a number of second half records being set at our Pilbara iron ore mine and rail system. We are also investing for the future, doubling our stake in the Oyu Tolgoi copper-gold project in Mongolia through the acquisition of Turquoise Hill Resources, progressing the Rincon Lithium Project in Argentina and reaching milestone agreements that underpin the long-term success of our Pilbara iron ore business.

We continue to focus on making lasting change to strengthen our workplace culture and to building better relationships with Indigenous peoples, communities and other partners. At all times we will seek to find better ways, in line with our purpose. We clearly have more to do but I am encouraged by the progress we are making.

Outlook

Rio Tinto has reaffirmed the production and cost guidance it provided for FY 2023 with its fourth quarter update. This includes:

• Pilbara iron ore shipments of 320Mt to 335Mt
• Aluminium production of 3.1Mt to 3.3Mt
• Mined copper production of 650kt to 710kt
• Pilbara iron ore unit cash costs of US$21 to US$22.5 per wmt

The post Rio Tinto share price on watch amid FY22 results appeared first on The Motley Fool Australia.

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More reading

• Goldman tips 20% surge in iron ore price. Should I buy ASX 200 mining shares?
• Passive income boost! 2 excellent high yield ASX dividend shares to buy: experts
• Should you dig into Rio Tinto shares before the ASX 200 miner reports next week?
• Why experts say these ASX 200 blue chip shares are buys
• Here’s the iron ore price forecast for 2023: CBA

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

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Speculation is rife these days that the spectacular run of ASX lithium shares over the past few years may be over.

Probably not, if you ask these company directors.

They’ve just shelled out tens of thousands of dollars of their own money buying more shares in their ASX lithium companies.

Here are the details.

Galan Lithium Ltd (ASX: GLN)

Galan Lithium non-executive director Daniel Jimenez bought 105,000 shares on-market for $126,000 on 16 February.

According to the ASX change of director’s notice, the last time Jimenez bought Galan shares was in June 2022.

He now owns almost 2.45 million shares with a shares option of one million shares at 21 cents per share expiring in October this year.

Galan delivered an investor presentation at the recent RIU Explorers Conference in Western Australia.

Earlier this month, the company announced it had moved to 100% ownership of its Candelas lithium brine project in the Catamarca Province of Argentina.

Candelas has a JORC 2012 Resource of 685kt lithium carbonate (LCE) and a production capacity of 14,000 tonnes per year over 25 years of life, with an after-tax payback period of 4.75 years.

The Galan Lithium share price closed down 3.45% to $1.12 today. It is down 16% over the past 12 months but up 4.7% in the year to date.

Global Lithium Resources Ltd (ASX: GL1)

Global Lithium non-executive director Dianmin Chen purchased 30,000 shares on market for $53,100 via a family account on 16 February.

He now owns more than 5.53 million shares directly and about 4.3 million shares indirectly, according to the ASX notice.

Chen also has a juicy options contract for three million shares at $1 per share expiring in November 2024.

Global Lithium held an investor roadshow this week and also presented at the RIU Explorers conference.

In the latest news, Global Lithium revealed ‘compelling’ results in a scoping study of its Manna Lithium Project. Manna is located 100km east of Kalgoorlie in Western Australia.

Based on the results, the board has recommended that a definitive feasibility study should be conducted.

The Global Lithium share price closed down 3.93% to $1.59 today. It is up 16.5% over the past 12 months and down 13.8% in the year to date.

What’s going on with lithium prices?

Lithium carbonate prices in China have fallen to their lowest level in 12 months at US$61,289 per tonne.

This is 30% off their all-time high of US$87,038 per tonne recorded back in November.

Analysis from Trading Economics suggests stronger supply and expectations of poor demand means there might be a surplus of the mineral this year.

Fears of a global recession and the end of stimulus measures for Chinese battery manufacturers have impacted demand for electric vehicles.

The post 2 ASX lithium shares being bought up by company directors appeared first on The Motley Fool Australia.

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• Guess which ASX lithium share just leapt 32% on big news out of the US
• Why Boral, Galan Lithium, Nuix, and Suncorp shares are racing higher
• Guess which ASX lithium share is surging 9% on the prospect of ‘robust economic returns’?
• Lithium giant forecasts 15% greater demand. How are ASX lithium shares reacting?

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.

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Anyone who has searched for inflation-beating passive income from ASX shares in recent times has at one stage or another likely considered BHP Group Ltd (ASX: BHP) and its dividends.

The resource titan has long been a provider of decent dividends. More so over the past five or so years. Although, if the company’s recent 40% interim dividend slashing is anything to go by, the days of near double-digit yields could be disappearing right before our eyes… at least for now.

That’s why I’d personally look elsewhere for large and growing dividends.

Where I’d go to find defensive dividends

A weakened economy induced by additional interest rate hikes could mean further deterioration in commodity prices. If so, this could put BHP’s dividend yield under further strain.

While the current yield of ~8% is still juicy as a passive income source, there’s every chance that it could trend back toward its pre-pandemic average of around 4.7%. The same could be said for other companies that are more influenced by the degree of consumer spending, including ASX retail shares, travel, etc.

Instead, I would look to companies operating in markets that are less sensitive to consumer sentiment. Some sectors that meet this condition in my eyes are transport, healthcare, and consumer staples. From there, it’s a matter of finding fundamentally strong businesses.

These ASX shares offer yields above 5%

The first two companies I’d consider buying instead of BHP for defensive passive income are Healius Ltd (ASX: HLS) and Metcash Limited (ASX: MTS).

Neither of these two will necessarily knock your socks off in terms of growth. However, both companies operate in industries that are relatively insulated from economic weakness.

Firstly, Healius is a provider of pathology and radiology services. Regardless of the state of the economy, if someone feels sick or breaks an arm they’ll need to make use of services made available by Healius. The ASX share currently offers a dividend yield of 5.5%, and if profits persist, there is potential for this to grow considering the modest payout ratio of 32%.

In a similar fashion, Metcash has a low reliance on the ebbs and flows of the economy. The $3.95 billion company operates food, liquor, and hardware stores; typically products that people ‘need’ rather than ‘want’.

Right now, Metcash provides a passive income of 5.5% as well. Though, this might mediate somewhat in the near term as its forecast payout ratio exceeds 100%. Nevertheless, a constant demand for food gives Metcash a level of protection for its future payments.

Trading off yield for defensiveness

The third and final ASX share I’d latch onto for income instead of BHP is Transurban Group (ASX: TCL). Unlike the others, I don’t foresee Transurban offering a better dividend than BHP any time soon. But what it lacks in yield it makes up for in its low risk.

In my opinion, Transurban is an incredibly defensive company. High upfront cost infrastructure is a quality moat, and Transurban’s toll roads are exactly that. It can cost billions to build these assets, but once constructed, a well-planned toll road has little in the way of competition.

Furthermore, this type of business is less sensitive to economic cycles — though some suggest otherwise. During the GFC, Transurban reported underlying growth as drivers continued to seek a shorter route.

At present, a 3.7% dividend yield is up for grabs in Transurban shares. This is still above the percentage available in the S&P/ASX 200 Index (ASX: XJO) when excluding the top 20 which is dominated by the banks and miners.

The post 3 ASX shares I’d buy for passive income instead of BHP’s declining dividend appeared first on The Motley Fool Australia.

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More reading

• How I’d invest $20K in ASX shares to target $1,000 in annual passive income
• Should I buy BHP’s shares after the ASX 200 miner’s latest update?
• The BHP dividend has been slashed by 40%. Here’s the lowdown
• Goldman tips 20% surge in iron ore price. Should I buy ASX 200 mining shares?
• Why is the BHP share price tumbling today?

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

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Looking for an ASX 200 growth share or two to buy? Two that analysts at Goldman Sachs rate as buys in February are listed below.

Here’s what the broker is saying about them:

ResMed Inc. (ASX: RMD)

The first ASX 200 growth share that has been tipped as a buy is ResMed. It is a medical device company with a focus on sleep treatment solutions.

Goldman Sachs is a fan of ResMed and has a buy rating and $38.00 price target on its shares. The broker likes the company due to its strong position in the sleep treatment market and its opportunity to win market share due to a competitor recall.

All in all, the broker expects double digit earnings growth through to at least FY 2026. It said:

The timing/nature of Philips’ re-entry into the market remains an important debate, but under most realistic scenarios we continue to expect an excess demand dynamic through end-2023. Whilst supply shortages and cost inflation mitigated the tailwind from these competitor challenges through FY22, we believe the benefits to RMD are significant, and could continue to accrue over many years. As operational pressures continue to ease we see margin/cost dynamics improving, supporting a favourable earnings trajectory through the long term. We currently model an EPS CAGR of +11% (FY23-26E), with potential upside depending on how competitive/regulatory dynamics develop.

Xero Limited (ASX: XRO)

Another ASX 200 growth share that Goldman Sachs rates highly is Xero.

It has a buy rating and $109.00 price target on the shares of this cloud-based accounting and business platform provider to small and medium sized businesses globally.

Its analysts rate Xero highly due to its massive total addressable market (TAM) and favourable tailwinds. The broker explained:

We see Xero as very well-placed to take advantage of the digitisation of SMBs globally, driven by compelling efficiency benefits and regulatory tailwinds, with >100mn SMBs worldwide representing a >NZ$76bn TAM. Following the recent underperformance (absolute/relative), we see an attractive entry point into a compelling global growth story and our preferred large-cap technology name in ANZ, and are Buy rated (on CL).

The post Buy these ASX 200 growth shares: Goldman Sachs appeared first on The Motley Fool Australia.

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More reading

• 7 ASX 200 growth shares to buy for possible takeovers: expert
• One top ASX 200 stock on my best shares to buy now list
• 3 excellent ASX 200 shares to buy and hold for a decade: analysts
• Why are ASX 200 tech stocks like Xero having such a cracking run today?
• Goldman Sachs says these excellent ASX tech shares are buys

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

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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Allkem Ltd (ASX: AKE)

According to a note out of Macquarie, its analysts have retained their outperform rating on this lithium miner’s shares with a trimmed price target of $19.00. While the broker was disappointed that Allkem has downgraded its Mt Cattlin production guidance, it expects the Sal de Vida and Olaroz operations to be supportive of its medium term production growth. The Allkem share price is trading at $11.45 on Wednesday.

Coles Group Ltd (ASX: COL)

A note out of Citi reveals that its analysts have retained their buy rating on this supermarket giant’s shares with an improved price target of $20.20. This follows the release of a first-half result that came in comfortably ahead of Citi’s expectations. Looking ahead, the broker believes shopping trends are favourable for Coles and feels the market is being too negative on the Ocado partnership. The Coles share price is fetching $18.18 this afternoon.

Hub24 Ltd (ASX: HUB)

Analysts at Morgans have retained their add rating on this investment platform provider’s shares with an improved price target of $31.90. Morgans notes that Hub24’s first-half underlying EBITDA came in well ahead of its forecasts thanks to higher earnings on pooled cash. The broker remains confident on the future, particularly given the potential for larger transition wins and the runway to secure more clients being intact. The Hub24 share price is trading at $28.83 today.

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

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More reading

• 3 ASX 200 dividend shares to buy now before their dividend payouts
• Here’s the latest ‘bearish news’ from brokers on ASX 200 lithium stocks
• Is Coles now one of the best ASX 200 dividend shares?
• Here are the top 10 ASX 200 shares today
• Why are ASX 200 lithium shares having such a stellar run today?

Motley Fool contributor James Mickleboro has positions in Allkem. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24. The Motley Fool Australia has positions in and has recommended Coles Group and Hub24. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The ASX share market is a very fruitful place to find ideas to grow annual passive income. To achieve an annual income of $1,000 from $20,000, I’d need an average dividend yield of at least 5%.

There aren’t many places where we can find a yield of 5%, as well as the potential for capital growth.

ASX dividend shares can provide a combination of dividend income and share price returns.

With that in mind, these are some of the higher-yielding ASX dividend shares that I’d use and split $20,000 between.

Metcash Limited (ASX: MTS)

Metcash is a diversified business that supplies food to IGAs and liquor to retailers like IGA Liquor, Bottle-O, Cellarbrations and Porters Liquor around the country. The company also has a hardware division, which owns the brands Mitre 10, Home Timber & Hardware and Total Tools.

The company is targeting a dividend payout ratio of 70% of underlying net profit after tax (NPAT). This results in the company paying a healthy dividend yield each result.

I think the sectors in which it operates are fairly defensive and that the overall business can benefit from factors like investments in productivity, with population growth being a useful tailwind.

The last two dividends amount to 22.5 cents per share, which is a grossed-up dividend yield of 7.9%.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is one of the smaller ASX retail shares. It sells a variety of advanced hair removal products, as well as beauty and oral care.

Despite all of the impacts on the economy over the past year, the business just reported that total sales increased by 3.8% to $131.9 million, while the NPAT went up 4.5% to $13.7 million, and the interim dividend was increased by 4.4% to 4.7 cents per share.

The business achieved earnings per share (EPS) of 10.8 cents (up from 10.6 cents per share in the first half of FY22), so the dividend payout ratio is only 44%. This was the sixth consecutive increase in the interim dividend since its initial public offering (IPO) in 2016.

With the gross profit margin higher in the first seven weeks of FY23 second half, this has helped gross profit in dollar terms, despite total sales being down 2.1% year over year.

The latest two dividends from the ASX dividend share amount to 10.2 cents, which equates to a grossed-up dividend yield of 12.1%.

Pacific Current Group Ltd (ASX: PAC)

Pacific Current describes itself as “a global multi-boutique asset management business” that partners with “exceptional investment managers”. In other words, it invests in fund managers, helps them grow and reaps the rewards of that.

The different asset managers and investment styles have created a portfolio of pleasing earning generators for the ASX dividend share.

Consistent earnings growth is not guaranteed, but the company’s underlying funds under management (FUM) continue to grow.

In the three months to 31 December 2022, the business saw its portfolio FUM rise from A$171.2 billion to A$175.1 billion.

The business has increased its annual dividend each year since 2018. The last 12 months of dividends amount to a grossed-up dividend yield of 7.5%.

Foolish takeaway

While I was aiming for an average dividend yield of 5%, the above three ASX dividend shares have an average yield of just over 9%. That means $20,000 invested evenly between them would generate $1,833 of annual passive dividend income. They could be mixed with lower-yielding names, but still good options like Telstra Group Ltd (ASX: TLS).

The post How I’d invest $20K in ASX shares to target $1,000 in annual passive income appeared first on The Motley Fool Australia.

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More reading

• How much do you need in ASX shares to give up work and live only off dividend income?
• Here are the top 10 ASX 200 shares today
• 2 ASX dividend stocks I think are dirt-cheap right now
• 3 ASX dividend shares for lazy investors
• Top ASX value shares to buy in February 2023

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

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Something strange is happening with the Bitcoin (CRYPTO: BTC) price in 2023.

At the time of writing, BTC is trading for US$24,173 (AU$35,385). That’s up 46% from what the world’s original crypto was worth on 1 January, according to data from CoinMarketCap.

That’s also more than four times the 11% gains posted by the Nasdaq Composite Index (NASDAQ: .IXIC) so far in 2023.

What’s strange about that?

Is the Bitcoin price correlation to stocks vanishing?

Here’s what we wrote in early January when we covered the 65% Bitcoin price drop over the course of 2022:

If nothing else, 2022 showed that [Bitcoin] is closely linked to the performance of growth stocks. And highly susceptible to the impacts of rising interest rates.

Yet here we are, less than two months later, with central bankers still ratcheting up interest rates to combat stubbornly high inflation, and Bitcoin has proven surprisingly resilient.

Here’s what we mean.

According to figures supplied by Bloomberg (using yesterday’s slightly higher Bitcoin price), “A 40-day correlation between Bitcoin and the S&P 500 has slid below 0.3 to the lowest since 2021 from a May record above 0.8.”

A correlation of 1 would mean the Bitcoin price moves precisely in line with the S&P 500 Index (SP: .INX).

Crypto research company Kaiko noted, “Crypto has been decoupling from traditional assets in 2023 … crypto-specific events increasingly drive the market.”

JPMorgan Chase strategist Nikolaos Panigirtzoglou pointed to the greater influence of retail investors in 2023, with many corporates having abandoned their forays into crypto in 2022 following several digital token meltdowns and exchange collapses.

“This positive retail impulse year-to-date is naturally more dominant in crypto given the absence of institutional investors at the moment,” Panigirtzoglou said.

“It became one of the themes to watch in 2022, crypto market correlation with traditional markets, as investors around the world reacted to rising inflation and subsequent rate hikes,” eToro market analyst and crypto expert, Simon Peters said.

“If the Bitcoin price does indeed move differently to macroeconomic events then it could provide significant support for using it as a hedge against other markets – akin to gold,” Peters added.

A word of caution

With that said, crypto investors should proceed with caution before making too much of this nascent trend. Or non-trend.

Let’s not forget the Bitcoin price crashed by 65% in 2022.

And the world’s top crypto remains volatile, trading as low as US$21,460 and as high as US$25,134 over the past 30 days.

Whether 2023 will see it continue to be decoupled from moves in global share markets remains to be seen.

The post Something strange is happening with the Bitcoin price in 2023 appeared first on The Motley Fool Australia.

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More reading

• Bitcoin price slumps 5% amid regulation fears

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

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