1) The prospect of a Fed pivot again drove US shares higher overnight Monday, sending the Dow Jones Industrial Average Index (DJX: .DJI) and S&P 500 Index (SP: .INX) to their highest closes in more than a month.

The S&P/ASX 200 Index (ASX: XJO) index has followed suit, gaining 40 points or 0.60% in early Tuesday trade. The benchmark local index is now only down 8.4% over the past 12 months, putting US markets to shame.

You can thank your ASX coal, energy, and lithium stocks, if you are skilful and luckily enough to own them.

2) This global stock market rally (ex-China stocks) is coming on top of Wall Street last week notching up its best week since June as US bond yields fell from multi-year highs.

Much of this bullishness has been driven by a report in The Wall Street Journal which said the US Federal Reserve is likely to use its November meeting to debate “whether and how to signal plans to approve a smaller interest rate increase in December”.

The prospect of a Fed Pivot – even as it is set to raise interest rates by another 75 basis points in early November – has finally given the bulls something to cheer about in this god-awful year for stock market investors.

It’s anyone’s guess as to whether this rally will stick. 

It didn’t – even when I thought it might – when the S&P 500 index jumped 17% from its June 2022 low only to crash all the way back down again by September 2022. 

Although I’m not calling September the bottom of the market – because that would just be guessing – I am continuing to buy stocks, because I think many of them are just plain cheap. 

3) That doesn’t mean they can’t go lower.

In the “batten down the hatches” corner, we have David Rosenberg on MarketWatch saying the S&P 500 crashes 30% lower from here, with US home prices also declining by 30%, and the US economy sinking into a recession.

Cheery soul, right?

All is not lost (yet), though, for stock market investors, with Rosenberg saying that since markets are cyclical, a new bull market for stocks, bonds and other risk assets should begin in 2024.

Only 15 more months of pain to go…

4) In the “believe” camp, we have the Chanticleer column in the AFR titled Is it time to believe in a Santa sharemarket rally? Excerpt: 

After a torrid year marked by rising interest rates, savage asset price falls and bruising volatility, consensus is building around a year-end Santa rally for share markets.

The logic of such a rally is pretty simple. Investor sentiment is low, positioning is light (that is, investors are underweight equities in a way not seen since the global financial crisis) and the bad news has largely been priced in, including a 0.75 percentage point rate increase from the US Federal Reserve in November and a mild recession.

So any bit of good news – particularly hints that the Fed may be about to slow the pace of rate rises, or company earnings holding up – should give stocks a nice nudge.

5) In the “not entirely sold on the Fed Pivot” corner, we have Lisa Erickson at US Bank Wealth Management, quoted on Bloomberg as saying…

“We are still agnostic as to whether the Fed really is going to pivot or be at the peak of its hawkish cycle. If you look at the underlying data, inflation remains sticky, particularly in services ex-housing, which can often be more persistent. So given the Fed’s dependence on the data, we’re not clear exactly again, when the Fed may truly begin to slow down.”

6) And in the “have faith, buy stocks now” corner, we have a bunch of fund managers who are licking their lips at a) the cheap prices on offer for selected stocks and b) the prospect of higher markets ahead, especially given the positive three, five and 10-year return profiles coming out of past bear markets.

In its most recent monthly update, the SGH Emerging Companies Fund said…

… we believe that once there are clear signals of the end of rate hikes, it will be bullish for both stocks and bonds. Consequently, we still expect equity markets to be significantly higher next year. Note share markets discount the future and will bottom before the economy. 

For emerging companies, after the large share market decline, we continue to see plenty of opportunities at cheaper valuations and deals at more favourable pricing.

7) “Earnings risk” might soon become the new buzzword for the near-term direction of equity markets, and in particular, for individual stocks.

This week sees a host of large-cap stocks reporting earnings, including Apple, Microsoft, Alphabet and Amazon.

Here on the ASX in Australia, as AGM season approaches, we’re already seeing quarterly updates, with the usual smattering of winners and sinners.

One of today’s winners is Mader Group Ltd (ASX: MAD), the global leader in the provision of specialist technical services across multiple industries.

The company reported that FY23 has started strongly, delivering a 48% jump in first-quarter revenue, with its nascent North American business growing in momentum. 

Favourable Q1 results and client demand across multiple sectors have provided Mader with the confidence to upgrade FY23 financial guidance.

Such language is usually music to the ears of investors. On this occasion, in early Tuesday trade, the Mader share price is largely flat, perhaps a nod to its already lofty valuation, at around 20 times forecast earnings before interest, tax, depreciation, and amortisation (EBITDA).

Still, quality doesn’t come cheap.

“Our goal is to find outstanding businesses at sensible prices, not a mediocre business at a bargain price.” – Warren Buffett

The post Even as one strategist predicts a 30% crash, others think the bottom of this bear market may already be in and shares might rally for Christmas appeared first on The Motley Fool Australia.

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More reading

• Westpac share price on watch following $1.3b earnings hit
• 5 things to watch on the ASX 200 on Tuesday
• Guess which ASX 200 directors bought $4m worth of their company shares last week
• Here are the top 10 ASX 200 shares today
• Why did ASX 200 gold shares have such a top run today?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Bruce Jackson has positions in Alphabet (A shares), Alphabet (C shares), and Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Apple. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The two primary ways to make money from stocks are selling them for more than you paid and dividends. The first one is straightforward, but the role dividends can play in an investor’s total returns is often underrated. Dividends, paid out quarterly from a company’s profits, are a way for companies to reward shareholders for simply holding onto their shares.

A well-rounded portfolio shouldn’t only have dividend stocks, but it should have its fair share. When done correctly, dividends can provide thousands in monthly retirement income. Let me show you how.

Spread out some of the risks

There are exchange-traded funds (ETFs) that pay out dividends simply as a byproduct of some of the companies within it paying dividends. And then, there are ETFs that focus specifically on dividend-paying stocks that have to meet specific qualifications. If you’re looking to invest in dividend stocks, focusing on dividend-paying ETFs can help you accomplish multiple things at once: dividends, diversification, and less risk.

Let’s take a look at the ProShares S&P 500 Dividend Aristocrats ETF (NYSEMKT: NOBL) as an example. To be eligible, a company must be in the S&P 500 and be a Dividend Aristocrat, which is a company that has increased its yearly dividend for at least 25 consecutive years. What’s better is that most of the companies within the fund have done so for at least 40 years.

The fund contains 65 companies spanning all major sectors, and the top 10 holdings only make up 17.66% of the fund (for perspective, the top 10 holdings in the S&P 500 make up just over 27%).

Let time do the heavy lifting

You have to accumulate a sizable stake in dividend stocks to get to the point where you’re receiving thousands in monthly dividend income. For most investors who don’t have large lump sums to invest at once, this means taking advantage of compound earnings. In investing, compound earnings occur when the money you make from investments starts to make money on itself.

Since its inception, the ProShares S&P 500 Dividend Aristocrats ETF has returned just over 10% annually. By no means do past results guarantee future performance, but if we assume this continues over the long term, here’s roughly how much an investor could have in 25 years at different monthly investment amounts:

Monthly Investment	Average Annual Returns	Amount in 25 Years
$1,000	10%	$1.18 million
$1,500	10%	$1.77 million
$2,000	10%	$2.36 million

Data source: Author calculations.

With time and consistency, accumulating a significant stake in dividend stocks is attainable. A great way to keep yourself consistent is by using dollar-cost averaging. With dollar-cost averaging, you put yourself on an investing schedule and stick to it regardless of stock prices at the time. It keeps you consistent and helps prevent you from trying to time the market, which is virtually impossible to do consistently long-term.

It pays to be patient

Dividends, in general, can be lucrative, but they can really be powerful when you reinvest your dividends. Many brokers, and companies, allow you to automatically reinvest the dividends you’re paid back into the stock that paid it out. Doing so adds to the effects of compound earnings and can drastically add to your returns.

Let’s assume a dividend-paying stock returns, on average, 7% annually with a 2% dividend yield over 25 years. Here’s how the values would differ if you reinvested the dividends over that span versus taking them as cash:

Monthly Investment	Value After 25 Years When Taking Dividends as Cash	Value After 25 Years When Reinvesting Dividends
$1,000	$758,988	$1.01 million
$1,500	$1.13 million	$1.52 million
$2,000	$1.51 million	$2.03 million

Data source: Author calculations. (Assumes average annual 7% price appreciation and 2% dividend yield.)

Yes, you would’ve made money from the cash dividends you received over those 25 years, but it wouldn’t be comparable to the hundreds of thousands more your investment would’ve grown by reinvesting your dividends. It’s usually in your best interest to reinvest your dividends until you reach retirement and then begin accepting them as cash when the extra income will likely be more valuable.

At the above totals, a 2% dividend yield would pay roughly $20,200, $30,400, and $40,600 annually, respectively.

You’ll be glad you took the steps

Retirement is expensive, and unfortunately for many people, that means Social Security by itself won’t do the trick. There’s no one-amount-fits-all regarding how much you’ll need in retirement, but one thing’s for sure: To make sure you’re as financially comfortable as possible, you’ll need to utilize all resources.

Dividends likely won’t be the bulk of your retirement income, but they can play an important role — use them to your advantage.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Want thousands in monthly retirement income? Focus on these investments appeared first on The Motley Fool Australia.

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More reading

• Even as one strategist predicts a 30% crash, others think the bottom of this bear market may already be in and shares might rally for Christmas
• Set for life: 5 ASX dividend shares I’d invest in if I ever had a million-dollar windfall
• Could this send Qantas shares flying too close to the sun?
• BHP share price dips following rough night on Wall Street
• Why Nio and more Chinese EV stocks crashed on Monday

Stefon Walters 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 ProShares S&P 500 Aristocrats ETF. 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Receiving $1 million would be an incredible windfall. Not only would I instantly become a millionaire, but I think I’d be able to invest it in ASX dividend shares so that I could live off the investment income for the rest of my life.

Some businesses have built a strong track record of paying dividends to investors. I’d utilise some of these to protect and grow my pot of gold.

I’d want to choose a mixture of defensive ASX shares and growth shares. I’m still quite young, relatively speaking, so I don’t need to choose high-yielding picks for every choice.

With that in mind, these are five of the ASX dividend share names I’d go for:

Rural Funds Group (ASX: RFF)

Rural Funds is a real estate investment trust (REIT) that owns farmland. I’ll point out that farmland has been a useful asset for (at least) hundreds of years. I think that will continue for the rest of my lifetime – we all need food after all.

It owns a diversified portfolio across a number of farming categories including cattle, vineyards, almonds, macadamias, and cropping (sugar and cotton).

The business has an objective of growing its distribution by 4% each year. This offers solid income growth in my opinion.

It’s expecting to pay a total distribution of 12.2 cents per unit in FY23, which translates into a forward distribution yield of 5%.

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

This ASX dividend share holds the record for the longest run of consecutive annual dividend growth, going back to 2000.

It owns a portfolio of investments in businesses and assets across a range of assets like telecommunications, building products, agriculture, resources, financial services, swimming schools, and many other industrial businesses.

The business pays out a majority of its cash flow as dividends each year but retains some of the money to reinvest in more opportunities.

It currently has a grossed-up dividend yield of 3.75%, excluding the special dividend.

Charter Hall Long WALE REIT (ASX: CLW)

This is another REIT, but its main focus is owning quality properties with a long lease expiry. Its weighted average lease expiry, or WALE, was 12 years at the last disclosure.

It’s invested in various things like telecommunication exchanges leased to Telstra Corporation Ltd (ASX: TLS), Bunnings Warehouse properties leased to Wesfarmers Ltd (ASX: WES), and BP petrol stations.

The rental income is growing, particularly the contracts linked to CPI inflation.  These have a 6.3% weighted average forecast increase in FY23.

It’s expecting to pay a distribution of 28 cents per unit in FY23, translating into a forward yield of almost 7%.

VanEck Morningstar Australian Moat Income ETF (ASX: DVDY)

This is an exchange-traded fund (ETF) that looks to invest in the 25 highest-yielding ASX dividend shares that meet Morningstar’s required criteria, which combines a company’s economic moat and its ‘distance to default’ measures.

An economic moat refers to a company’s competitive advantages. In other words, they are good at what they do and are expected to be resilient against competitors trying to displace them.

Its portfolio can change, but at the moment its biggest three holdings are IPH Ltd (ASX: IPH), Ansell Limited (ASX: ANN), and National Australia Bank Ltd (ASX: NAB).

The ETF passes the dividends it receives to investors.

Bailador Technology Investments Ltd (ASX: BTI)

My final pick is Bailador which invests in unlisted technology businesses that have good growth potential with global addressable markets. It’s looking for tech businesses at the ‘expansion stage’, where they have already been running for two to six years and are generating revenue internationally.

I think the businesses that Bailador invests in have very promising futures.

Some of its investments from years ago have gone on to list on the ASX. It still owns stakes in Straker Translations Ltd (ASX: STG) and Siteminder Ltd (ASX: SDR).

The business has a dividend policy of paying 4% of its pre-tax net tangible assets per annum, paid semi-annually. In other words, it will pay a 2% dividend yield on its NTA every six months.

At 30 September 2022, the pre-tax NTA was $1.75. That implies the dividend would be 7 cents per share and the forward grossed-up dividend yield would be 7.7% if the NTA didn’t change.

The post Set for life: 5 ASX dividend shares I’d invest in if I ever had a million-dollar windfall appeared first on The Motley Fool Australia.

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• Experts name 2 ASX dividend shares to buy with great yields
• Guess which ASX 200 directors bought $4m worth of their company shares last week
• 2 ASX dividend shares with big yields I’d buy for income
• Don’t miss out on these buy-rated ASX dividend shares: analysts
• When it comes to ASX 200 dividend shares, is there any such thing as truly passive income?

Motley Fool contributor Tristan Harrison has positions in Bailador Technology Investments Limited, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bailador Technology Investments Limited, SiteMinder Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended IPH Ltd. The Motley Fool Australia has positions in and has recommended RURALFUNDS STAPLED, Telstra Corporation Limited, Washington H. Soul Pattinson and Company Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended Ansell Ltd., Bailador Technology Investments Limited, IPH Ltd, and Straker Translations. 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 BHP Group Ltd (ASX: BHP) share price is out of form on Tuesday.

In morning trade, the mining giant’s shares are down 0.4% to $38.90.

This compares unfavourably to the ASX 200 index, which is up 0.5% this morning.

Why is the BHP share price underperforming?

The BHP share price has come under pressure today following broad weakness in the materials sector.

This follows a poor night of trade for materials stocks, such as BHP’s NYSE listed shares, on Wall Street on Monday. This was driven by a pullback in the price of a range of commodities, including iron ore, amid concerns over the global demand outlook.

Here’s how other materials shares are performing on the ASX 200 today:

• The Fortescue Metals Group Limited (ASX: FMG) share price is down 1.5%
• The OZ Minerals Limited (ASX: OZL) share price is down 1.5%
• The Rio Tinto Limited (ASX: RIO) share price is down 0.6%
• The South32 Ltd (ASX: S32) share price is down 3%

Is this a buying opportunity?

Based on what brokers are saying, this could be a buying opportunity for investors.

For example, Morgans has an add rating and $47.00 price target on its shares and Goldman Sachs has a buy rating and $42.50 price target on them.

Based on the current BHP share price, this implies potential upside of 21% and 9%, respectively, over the next 12 months.

In addition, sweetening the deal further, both brokers are forecasting big dividend yields in the coming years.

The post BHP share price dips following rough night on Wall Street appeared first on The Motley Fool Australia.

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More reading

• Why these 2 ASX 200 dividend shares are ‘of particular interest’: fund manager
• Why is the Fortescue share price surging today?
• Why is the BHP share price leaping 4% on Monday?
• ASX dividend shares or distribution shares? Is there even a difference?
• Brokers name 3 ASX shares to buy today

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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The Pilbara Minerals Ltd (ASX: PLS) share price has continued its strong run on Tuesday.

In morning trade, the lithium miner’s shares rose 5% to a new record high of $5.66.

Investors have been bidding the Pilbara Minerals share price higher today in response to the release of the company’s quarterly update.

Pilbara Minerals share price higher on quarterly update

For the three months ended 30 September, Pilbara Minerals reported a 16% quarter on quarter increase in spodumene concentrate production to 147,105 dry metric tonnes (dmt).

Management advised that this strong production performance reflects the company’s operating strategy and represents an annualised production rate of 588,000 dmt of spodumene concentrate.

It also highlights that it decided to lower the grade of its spodumene to optimise the product yield, allowing the company to maximise sales volumes and take advantage of current market pricing conditions. The average grade of product sold during the quarter was ~5.3%, down from 5.4% three months earlier.

This strong production allowed the company to ship 138,249 dmt of spodumene concentrate, which was up 4.4% on the previous quarter.

These shipments were undertaken at an average realised sales price of US$4,266/dmt SC5.3 basis (CIF China). This equates to a reference price of US$4,813/dmt on an SC6.01 basis (CIF China) when adjusted pro-rata for lithia content.

In addition, the company achieved strong pricing from three Battery Material Exchange (BMX) sale auctions during the quarter, with one auction commanding a price of US$7,708/dmt on an SC6.0 equivalent basis (CIF China).

Cost inflation doesn’t stop strong cash generation

Pilbara Minerals’ costs remained higher during the quarter due to “to elevated strip ratios to support a substantial investment in mining activities, the impact of labour shortages in the WA mining sector (including the impact of COVID-19), supply chain disruptions and general inflationary cost pressures.”

Positively, though, its Pilgangoora Project costs eased slightly quarter on quarter to US$434/dmt (US$462/dmt in the June quarter). This is at the lower end of its guidance range.

And while no details were provided in relation to its earnings, the company revealed a huge increase in its cash balance. At the end of the quarter, the company’s cash balance stood at $1.375 billion. This is up by $783.7 million over the three months.

And this doesn’t even include $132.2 million of irrevocable letters of credit for shipments that were completed before the end of the quarter. If you include this, its cash balance was $1.508 billion.

No wonder investors have been scrambling to buy its shares this year!

The post Pilbara Minerals share price hits record high following Q1 update appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Tuesday
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• Why Life360, Novonix, Pilbara Minerals, and Vulcan shares are storming higher today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Here’s why the Pilbara Minerals share price is charging higher on Monday

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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The A2 Milk Company Ltd (ASX: A2M) share price is falling on Tuesday.

In morning trade, the infant formula company’s shares are down 1% to $5.37.

What’s going on with the A2 Milk share price today?

The A2 Milk share price is falling today after the company announced the exit of a senior executive.

According to the release, Shareef Khan has resigned from his position of chief operations officer and will be finishing up in his role at the end of December.

The release notes that Khan has been in discussions with the company for some time about his desire to spend more time with his family and explore other pursuits.

A2 Milk’s managing director and CEO, David Bortolussi, commented:

Shareef joined the Company in 2012 primarily to develop our supply chain operations with Synlait Milk to support the growth of our infant formula business. Shareef has navigated the Operations function through some extraordinary times and has played an important role in a2MC’s growth. I would like to personally thank Shareef for his passion and commitment to a2MC over many years, and we wish him all the best in his future endeavours.

Organisational changes

A2 Milk will now be introducing a new chief supply chain officer role to lead its end-to-end supply chain in all categories and markets.

It notes that the role will bring together its operations and manufacturing teams under a combined leadership role to transform its supply chain as a key aspect of its refreshed growth strategy.

The chief supply chain officer role will be a member of the Executive Leadership Team (ELT) reporting directly to the CEO. In light of this change, Bernard May, who will report to the new chief supply chain officer, will step down from the ELT. However, May will continue as the CEO of the Mataura Valley Milk (MVM) business.

The company has not yet appointed a chief supply chain officer but expects to do so in the coming weeks.

The post Why is the A2 Milk share price falling today? appeared first on The Motley Fool Australia.

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• Which ASX All Ords shares avoided a sell-off during the last recession?
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• Broker tips A2 Milk share price to jump 20%

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 A2 Milk. 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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It’s likely no surprise that S&P/ASX 200 Index (ASX: XJO) materials share-turned-lithium favourite Mineral Resources Limited (ASX: MIN) has been on a good run lately.

The stock has surged 77% over the last 12 months and a whopping 320% over the last five years. As of Monday’s close, the Mineral Resources share price was $76.08.

But its recent gains have nothing on those the mining share has posted over its listed life.

Here’s what $15,000 invested in Mineral Resources shares at the time of the company’s ASX float would have returned by 2022.

The ASX 200 lithium share that turned $15,000 into $1.4m

Long before the establishment of Mineral Resources’ lithium leg – which could be spun out in the future – the mining giant listed on the ASX, offering new shares for just 90 cents under its initial public offering (IPO).

That’s right, a $15,000 investment in the company’s 2006 IPO would see a shareholder boasting a parcel of 16,666 shares in the ASX 200 lithium icon.

Today, that parcel would be worth a jaw-dropping $1.27 million – representing a mammoth 8,353% gain. And that’s before considering the company’s dividends.

Mineral Resources has been handing out a portion of its profits in the form of dividends since November 2006.

Back then, it handed shareholders just 1.2 cents per share. For comparison, the stock’s latest dividend was worth $1 per share.

Over the years, Mineral Resources has paid out a total of $9.562 per share of fully franked dividends.

That means an investor who held 16,666 Mineral Resources shares since 2006 would have received around $159,360.29 in dividends over that time.

And that’s before considering potential benefits brought by franking credits or compounding from participating in the company’s dividend reinvestment plan – active since 2011.

All in all, an initial $15,000 investment at the ASX 200 lithium share’s IPO would have returned a total of $1.43 million as of Monday’s close. That’s certainly nothing to scoff at!

The post This ASX 200 lithium share turned a $15,000 investment into $1.4 million appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Brokers name 5 ASX lithium shares to buy now
• Here are the top 10 ASX 200 shares today
• 3 ASX 200 companies among the top 10 lithium producers in the world
• 3 ASX 200 lithium shares that turned a $10,000 investment into $500,000

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

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The ASX share market is offering investors, of all ages, plenty of opportunities to buy businesses. If someone is reading this aged 35 but with no investments, I don’t think that’s worth worrying about.

A number of ASX shares are a lot cheaper right now than they have been over most of the last two and a half years. Certainly, inflation and higher interest rates have hurt business valuations. But I think it’s a great time to start investing because it’s better to buy an investment when the sticker price is lower.

Compounding can really help grow wealth

Long-term compounding can make a big difference to an investor’s portfolio over time.

At 35, investors still have three decades before reaching retirement age. I’ll show how that can play out when investors put money to work for a long time, using the Moneysmart compound calculator.

Historically, the share market has returned an average of around 10% per annum. That’s just an average, sometimes it’s a big rise in a year; other times it can fall.

If a 35-year-old can invest $500 a month and earn 10% per year then they’d have $987,000 after three decades.

Investing $1,000 a month would turn into $1.97 million.

Which ASX shares are cheap?

Investors don’t need to go for the cheapest ASX shares or the ones that fall hard. We just need to find investments that have compelling plans and are growing over time.

I think the following three businesses look like solid contenders for at least the rest of this decade.

Nick Scali Limited (ASX: NCK)

Nick Scali may be best known as a business that sells furniture, but I think it has a number of attributes that are attractive.

For starters, it’s currently run by managing director Anthony Scali. I think he’s a talented operator and he’s very aligned with regular shareholders because he owns millions of Nick Scali shares.

The ASX share recently bought the business Plush, which adds to its scale. Not only does it create compelling synergies, but the combined business has a strong store rollout plan with an eye on growing online sales as well.

Nick Scali typically pays investors a sizeable dividend. The Nick Scali share price has dropped almost 40% in 2022. According to estimates on CMC Markets, it could pay a grossed-up dividend yield of 9.7% in FY24 and 10.8% in FY23 (the current financial year).

Wesfarmers Ltd (ASX: WES)

Wesfarmers is the parent company behind many iconic Australian businesses such as Bunnings, Kmart, and Officeworks. Other businesses in its portfolio of names include Priceline, Target, Catch, and Clear Skincare Clinics.

Despite having this quality collection of names, the Wesfarmers share price has dropped around 25% since the start of the year. I think this is a good time to get some exposure to this ASX share.

I like how the management can, and do, alter the names in the portfolio so that it’s more future-focused. For example, it has recently started a healthcare division. I think this has an attractive future because of the ageing demographics of Australia. Plus, it’s working on a lithium mining project which could diversify and grow the company’s earnings.

Brickworks Limited (ASX: BKW)

I also think that the Brickworks share price is looking cheap at the moment.

While it has only declined 12% in 2022 at the time of writing, I think the underlying assets look undervalued.

It owns a large chunk of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares, which is an investment business that is growing its portfolio of investments and steadily increasing its dividend to Brickworks (and other shareholders).

Brickworks is the biggest brickmaker in Australia, which includes the business Austral Bricks. It also gives exposure to other building products through names like Austral Masonry and Bristle Roofing.

After making some acquisitions a few years ago, it’s also the largest brickmaker in the northeast of the US, which is a promising, large market for the company.

Finally, Brickworks has a joint venture with Goodman Group (ASX: GMG). The two businesses are building a growing portfolio of industrial properties within a property trust. Completing the buildings is growing the underlying value of Brickworks, generating profits, and also leading to stronger rental income.

I think the Brickworks share price looks attractively cheaper than the combined value of all of the above assets I mentioned. At 31 July 2022, the inferred asset backing was over $33 per share, according to Brickworks.

At the time of writing, Brickworks shares are going for $21.80 apiece.

The post No savings at 35? I’d buy cheap ASX shares to try and retire rich appeared first on The Motley Fool Australia.

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More reading

• Looking to buy Wesfarmers shares? Here’s what to watch at this week’s AGM
• 5 ways to be carefree during the next ASX share market downturn
• Don’t miss out on these buy-rated ASX dividend shares: analysts
• Is the Wesfarmers share price due to make a comeback in FY23?
• Wesfarmers shares could be one of the best options on the ASX 200: Morgans

Motley Fool contributor Tristan Harrison has positions in Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, Washington H. Soul Pattinson and Company Limited, and Wesfarmers Limited. 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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Fund manager Wilson Asset Management (WAM) has identified two top small-cap ASX shares in one of the portfolios it manages that could be investment ideas.

WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM), focus on larger companies.

There’s also one called WAM Microcap Ltd (ASX: WMI), which focuses on small-cap ASX shares with a market capitalisation under $300 million at the time of acquisition.

WAM says WAM Microcap targets “the most exciting undervalued growth opportunities in the Australian microcap market”.

These are the two small-cap ASX shares the fund manager outlines in its recent monthly update.

iCollege Ltd (ASX: ICT)

WAM described this business as a provider of accredited and non-accredited courses and services across Australia. It also operates an international recruitment agency. The iCollege share price is up 60% since 24 August 2022.

It was noted that the COVID-19 period has been challenging, but the reopening of Australian borders and a range of government initiatives aimed at encouraging international students to return has led to iCollege seeing a “surge” in demand from overseas students.

The fund manager also said the small-cap ASX share is strongly positioned to benefit from this trend with the company revealing in its FY22 result that the number of English language students has exceeded pre-COVID levels. New student offers and enrolments at Go Study are increasing on a month-over-month basis.

The intake of international bachelor degree students is rising steeply and will “contribute to strong revenue growth into FY24 and onwards”.

Concluding its positive thoughts, WAM explained:

We believe the market is underestimating the company’s operating leverage associated with filling incremental classroom capacity, underpinning earnings upgrades. The strong balance sheet also provides opportunity to deploy capital into earnings accretive acquisitions over the medium-term.

CogState Limited (ASX: CGS)

The other small-cap ASX share mentioned, CogState, was described as a leading technology company optimising brain health assessments to advance medicine development and enable earlier clinical insights in healthcare. The CogState share price is up 30% since 27 September 2022.

Last month, its global commercial partner Eisai reported a successful phase three trial result for its new Alzheimer’s disease drug, which met both its primary and secondary endpoints.

WAM noted that the drug reduced clinical cognitive decline by 27% compared to a placebo in a study involving 1,795 participants with early Alzheimer’s disease.

Eisai will continue to seek approval for the drug in the US, Japan, and Europe.

The fund manager said the adoption of Cogstate’s technologies at scale has been predicated on a commercialised drug in the market to screen for potential patients suitable for treatment.

Assuming the drug is approved, WAM said:

We anticipate this to materialise in the 2023 calendar year, driving upgrades to revenue and earnings. Additional opportunities exist with highly-anticipated read-outs from two other pivotal phase three Alzheimer’s drugs, providing near-term catalysts for the company.

The post These 2 small-cap ASX shares have soared, but a fund manager still tips them as buys appeared first on The Motley Fool Australia.

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More reading

• These 3 ASX shares hold top spot as my favourite dividend deliverers
• 2 ASX healthcare shares to buy that you’ve not heard of: expert
• Here’s how ASX tech shares fared in September
• These were the 5 best-performing ASX All Ords shares in September
• Why Cogstate, Global Lithium, Premier, and Woodside shares are charging higher

Motley Fool contributor Tristan Harrison has positions in WAM MICRO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CogState Limited. The Motley Fool Australia has positions in and has recommended CogState Limited. 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 Wesfarmers Ltd (ASX: WES) share price will be in the spotlight this week as the ASX 200 conglomerate gears up to hold its 2022 annual general meeting (AGM).

On Thursday, Wesfarmers will hold its 41st AGM at the Perth Convention and Exhibition Centre. 

Shareholders will be able to participate in the AGM and ask questions either in person or online.

As usual, the formalities of the meeting will see shareholders vote on items such as the re-election of board members, the FY22 remuneration report, and the grant of performance shares to managing director Rob Scott.

But the real meat of the AGM will come through management’s addresses at the start of the meeting.

Chair Michael Chaney will be up first to introduce the proceedings and provide some commentary. 

Then, all eyes will be on Rob Scott’s address, which is what the market will be paying particular attention to.

Here’s what to watch for when Wesfarmers holds its AGM on Thursday.

Recent trading conditions

Unlike Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL), Wesfarmers doesn’t usually provide quarterly updates.

So, Thursday’s AGM is unlikely to get into the nitty gritty of Wesfarmers’ recent financial performance in FY23.

However, the managing director’s address usually pulls back the curtain and provides comments on recent trading.

This should include comments at a segment level, providing insight into performances across the likes of Bunnings, Officeworks, Kmart, Catch, chemicals, and industrials.

When Wesfarmers released its FY22 results, it noted that retail trading conditions had remained “robust” through the first seven weeks of FY23. 

Singling out its retail brands, the conglomerate said that sales growth had been particularly strong in Kmart Group. Bunnings was also ticking along, notching up positive sales growth. However, sales at Officeworks were flat compared to the prior year.

Wesfarmers also noted that its industrial businesses remain subject to international commodity prices, foreign exchange, competitive factors, and seasonal outcomes.

Inflation and cost of living pressures

Inflation is the topic on everyone’s lips at the moment. And as the nation’s largest retail conglomerate, there’ll be a lot of interest in what Wesfarmers has to say (or perhaps not say) on the matter.

Commenting on these conditions back in August, Wesfarmers said:

The Australian economy is starting from a strong base with low unemployment and high levels of household savings, but the effects of inflation and higher living costs are placing pressure on parts of the economy, including household budgets.

At the time, the conglomerate believed that it was well-placed to navigate through this environment, noting:

The Group’s retail businesses are well positioned as cost of living pressures impact household budgets and value once again becomes increasingly important to customers. The retail businesses will maintain their focus on meeting the changing needs of customers and delivering even greater value, quality and convenience.

Wesfarmers share price snapshot

As I covered recently, brokers have a mixed view on Wesfarmers shares. Morgans and UBS are camped among the bulls while Goldman Sachs and Citi remain sceptical. 

With Wesfarmers shares last closing at $44.18, they’ve slumped 26% in the year to date. This has largely been due to the conglomerate’s vulnerability to the impacts of rising inflation and interest rates, which could see consumer spending dry up across its portfolio of retail brands.

Wesfarmers reported net profit after tax (NPAT) of $2.4 billion in FY22, marginally lower than the prior year. So, Wesfarmers shares are trading on a trailing price-to-earnings (P/E) ratio of 21 times.

As for dividends, an annual payout of $1.80 puts Wesfarmers shares on a trailing dividend yield of 4.1%. With the benefit of franking credits, this yield bumps up to 5.8%.

The post Looking to buy Wesfarmers shares? Here’s what to watch at this week’s AGM appeared first on The Motley Fool Australia.

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More reading

• 5 ways to be carefree during the next ASX share market downturn
• Don’t miss out on these buy-rated ASX dividend shares: analysts
• Is the Wesfarmers share price due to make a comeback in FY23?
• Wesfarmers shares could be one of the best options on the ASX 200: Morgans
• These ASX 200 dividend shares have been named as buys by analysts

Motley Fool contributor Cathryn Goh 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 COLESGROUP DEF SET and Wesfarmers Limited. 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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