I think that one of the most promising areas of the market to invest in at the moment is the tech sector.

In this area there are a good number of companies with the potential to grow strongly over the next decade and generate outsized returns for shareholders.

Three ASX tech shares that I think are worth considering are listed below. Here’s why I like them:

Bravura Solutions Ltd (ASX: BVS)

Bravura Solutions is a provider of software products and services to financial institutions including BNP Paribas, Fidelity, and Mercer. Thanks to the increasing popularity of its Sonata wealth management platform, it has been growing its earnings at a strong rate over the last few years. I believe there is still a long runway for growth for Sonata, which should be complemented by recent acquisitions. These acquisitions look set to provide Bravura with new avenues for growth in industries benefiting from structural tailwinds.

Xero Limited (ASX: XRO)

Another tech share to consider buying is Xero. It is one of the world’s leading cloud-based business and accounting software providers with a high quality and sticky product. Xero recently reported its full year results and revealed further impressive growth in sales and EBITDA. This was driven by strong customer growth and increases in average revenue per user. While the next few months may be trickier than normal because of the pandemic, I believe its long term prospects remain as positive as ever.

Zip Co Ltd (ASX: Z1P)

A final tech share to consider buying is Zip Co. I’ve been very impressed with the performance of the buy now pay later provider over the last couple of years and feel confident its strong growth can continue. Especially given its international expansion and the ever-increasing customer and merchant numbers on its platform. Another big positive was that Zip Co recently released a business update which showed that its growth has continued during the pandemic and its bad debts have remained low.

More reading

• Is the Xero share price a buy after last week’s dip?
• Leading brokers name 3 ASX shares to buy today
• Why Aristocrat Leisure, Newcrest, Santos, & Zip Co shares are charging higher
• 5 ASX 200 winners and 5 losers of the week
• These are the 10 most shorted ASX shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Bravura Solutions Ltd, Xero, and ZIPCOLTD FPO. The Motley Fool Australia has recommended Bravura Solutions Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Tyro Payments Ltd (ASX: TYR) was once a highly successful IPO, soaring from its offer price of $2.75 per share to a record all-time high of $4.50 in just 2 months. However, coronavirus lockdown measures forced many of its EFTPOS terminal customers to temporarily or partially close business, resulting in its share price sliding almost 80% from peak to tough during the share market crash.

But, as the Australian economy is looking to progressively reopen, could it be time to buy Tyro shares? 

A swift share price recovery 

After hitting a low of just $0.97 per share in March, the Tyro share price has rapidly rebounded. It now sits at a comfortable price level of around $3.50. 

Tyro has remained incredibly transparent throughout the coronavirus pandemic, providing investors with weekly updates regarding its transaction values. So far, it has provided the following updates regarding 2020 vs. 2019:

• January: 27% increase 
• February: 30% increase 
• March: 3% increase 
• April: 38% decrease 
• May to 15 May: 20% decrease 
• Year-to-date: 18% increase 

March appears to be the consistent trough across many retail-related companies. The recent Afterpay Ltd (ASX: APT) business update noted that global underlying sales in the second half of March versus the first half of March were 4% lower. However, its sales rebounded strongly in April, up approximately 10% on the second half of March.  

I believe the relaxation of social distancing measures will result in a graduate recovery of Tyro’s transaction values. In the company’s prospectus, it cited that SMEs have been the main target size category for its terminals. As at 30 June 2019, Tyro provided payment services to over 29,000 Australian merchants, of which 77% were SMEs and 86% were in the health, hospitality and retail verticals. 

Many state governments including New South Wales and Queensland have already acted on stage one, allowing restaurants, cafes and shopping centres to open. Victoria has plans to advance to stage one by 1 June. 

Industry tailwinds 

Cash is declining as a method of payment in Australia in response to the perceived benefits of card payment such as convenience, rewards and security, and availability of electronic acceptance devices. The use of cash for payments in Australia decreased from 69% in 2007 to 37% in 2016. The coronavirus and fears around transmission through coins, notes and transaction contact is another catalyst and tailwind for card transactions. 

Foolish takeaway 

The worst may have passed for Tyro and the reopening of the Australian economy, particularly the hospitality and retail sectors, should see a gradual recovery in its monthly transaction volumes. While the Tyro share price has run up significantly in recent times, I believe the business has much more to look forward to. 

More reading

• Why all ASX investors should avoid this easy mistake in 2020
• Will the Afterpay share price stop at $40 or keep on running?
• These ASX 200 shares are up over 40% in 2020
• 3 fantastic ASX shares to buy when you’re young
• Why a buy and hold strategy for ASX shares is best

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 become rich then I think you should start investing in shares today.

There’s a common saying that the best time to start investing is 20 years ago, the second best time is today. You could say the same thing about trees – we only get to sit in the shade of a tree today because someone had the foresight to plant a tree years ago.

It takes a long time to become rich. Becoming rich with shares doesn’t happen in a day or in a month. It takes many years, or a lifetime, of disciplined saving and investing to reach a desired financial goal or wealth position.

Why you should start investing today 

If you delay your investing journey it will dramatically reduce your final wealth balance. Shares have historically made an average of 10% a year. Whether that’s Australian shares as represented by Vanguard Australian Shares Index ETF (ASX: VAS) or international shares represented by something like iShares S&P 500 ETF (ASX: IVV).

Imagine if you give yourself 25 years to build wealth and at the end of it you have $990,000. A great total. But if you delayed and only had 24 years, you’d miss out on that last year of 10% growth and you’d only have $900,000. One year of delay could mean almost $100,000 of growth lost!

Why you should invest in shares to become rich

Why specifically shares? I think there’s a number of good reasons why shares will help you become rich. I prefer shares to property for a number of reasons.

On the one hand, I think property ‘returns’ don’t reflect the full picture. Quoted property returns usually don’t include the effects of negative gearing – which is an alternative description to ‘losing real money’. Returns usually don’t include transaction costs like stamp duty and real estate agent selling fees. The property prices quoted don’t reflect the tens or hundreds of thousands of dollars of renovations (or just repairs) that have gone into the property – it hasn’t simply been growth from a $500,000 property to $1 million with no cost to the investor. And what happens if an investment property doesn’t have a (paying) tenant? The costs are still heading out of the bank account.

With shares you can be invested in the best businesses on the ASX or even the best in the world. I think it’s these shares that will help people become rich. Don’t forget that usually the share return totals don’t include franking credits which is a big bonus for investors. Shares are pretty cheap right now because of the coronavirus. 

Which shares will help you become rich? I like the idea of investments like the iShares S&P 500 ETF, Magellan High Conviction Trust (ASX: MHH), MFF Capital Investments Ltd (ASX: MFF) and Future Generation Global Invstmnt Co Ltd (ASX: FGG).

More reading

• The importance of diversifying your ASX portfolio and how you can do it
• The smartest shares to buy if you have $2,000
• Here’s how to create a $1 million ASX portfolio by investing $1,000 a month
• How I’d invest $50,000 into ETFs
• ASX shares can help millennials retire before their parents

Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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