Day trading may provide you with an adrenaline kick and potentially even decent returns, but statistically it creates far more losers than winners.

Cory Michael from Vantage Point Trading told Forbes: “The success rate for day traders is estimated to be around only 10%, so …90% are losing money.”

But those in the 10% aren’t necessarily winning. Mr Michael added: “Only 1% of [day] traders really make money.”

In light of this, I think investors interested in building their wealth should consider a more prudent investment strategy that involves buying and holding shares over the long term.

With that in mind, here are three ASX shares that I believe investors should consider:

Afterpay Ltd (ASX: APT)

The first share to consider buying is Afterpay. I think this payments company would be a great option for long term focused investors. This is due to the continued success of its international expansion which I expect to drive further strong underlying sales and customer growth for a long time to come. Especially if it decides to expand into mainland Europe and Asia.

Cochlear Limited (ASX: COH)

Another option to consider is Cochlear. It is a hearing solutions company which I feel could be a long term market beater. I believe its outlook is very positive due to the ageing populations tailwind. This is because as people age their hearing will tend to fade and require some form of assistance. I expect this to lead to increasing demand for hearing solutions products over the next couple of decades.

Pushpay Holdings Group Ltd (ASX: PPH)

Pushpay is another payments company to consider. It provides a donor management platform to the faith, not-for-profit, and education sectors. The company has carved out a leadership position in the sector and has been experiencing very strong demand for its offering. The good news is that it is still only scratching at the surface of its sizeable market opportunity. This could mean there is still plenty more growth to come from this rapidly growing tech company.

More reading

• Cochlear share price edges lower on patent infringement news
• 2 millionaire-maker ASX internet growth shares
• Where to invest $500 in ASX shares right now
• This ASX fintech share is soaring again as the economy reopens
• 3 industries that may never recover from COVID-19

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 Cochlear Ltd. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Cochlear 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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The federal government’s early childhood education and care relief package helped ASX childcare shares stay afloat at the height of the COVID-19 pandemic. However, as restrictions ease and Australians begin to go back to work, the free childcare scheme is unlikely to be extended beyond its expiry date of 28 June 2020.

What is the free childcare scheme?

In early April, the federal government pledged to support parents and childcare centres across the country by announcing that childcare would become free for parents who continue to work during the coronavirus pandemic.

Additionally, the government announced it would provide financial support to childcare centres to ensure they continue to operate. As a result, the government has been paying childcare businesses 50% of their pre-COVID-19 revenue in the form of weekly ‘business continuity payments’.

The scheme was no doubt a big relief to the many parents trying to balance both working at home and parenting at the same time. It has also been vital for many others such as nurses and doctors that have been required to leave their children in the care of others when they go to work.

The announcement put a rocket under ASX childcare shares like G8 Education Ltd (ASX: GEM) and Think Childcare Ltd (ASX: TNK) at the time. However, following the initial boost, both shares remain relatively flat over the past month. G8 Education even tapped the market for capital in April to provide liquidity and strengthen its balance sheet.

New report hails scheme as a success

A report into the free childcare scheme has just been released by the Federal Education Department. The report was produced at the height of the pandemic and involved a survey of more than 7,000 child care providers.

According to ABC News, the report concluded that the scheme fulfilled its aim of rescuing the sector and keeping services viable and open. It found that 86% of childcare services credited the scheme with helping them stay open, while 76% said the scheme helped them stay financially viable. The report also said that current childcare levels remain well below capacity at 63%.

As quoted by ABC News, Education Minister Dan Tehan said:

It is positive to see a report card like this but we cannot rest on our laurels because as demand continues to increase we’ve got to ensure that the sector will survive and flourish in a post pandemic world.

Speaking to the Sydney Morning Herald, Mr Tehan further commented on the sustainability of the scheme:

The success of the rescue package and the success we have had in flattening the curve means we do have to look at how long we want this temporary measure in place and how quickly do we need to change to meet the growing demand.

What next?

The current scheme is due to expire on 28 June 2020. While no final decision in regard to an extension has been made yet, Prime Minister Scott Morrison recently highlighted the temporary nature of the scheme. On Friday, Scott Morrison said that although the Education Minister is considering the program beyond its current expiry, it was “not a sustainable model for how the childcare sector should work”.

As for ASX childcare shares, it will continue to be a tough road ahead as COVID-19 has had a significant adverse impact on occupancy levels across the sector. G8 Education and Think Childcare also carry a meaningful amount of debt to be serviced.

Although G8 Education’s recent $301 million equity raising helped to substantially shore up its balance sheet, it is still in a net debt position of $65 million on an adjusted basis. The much smaller Think Childcare had around $30 million of net debt as of FY19 (ending 31 December 2019).

More reading

• These 10 ASX 200 shares have fallen the most over the last year
• Here are all the ASX 200 companies that have announced capital raisings so far in 2020
• Leading brokers name 3 ASX 200 shares to sell right now

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. 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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The S&P/ASX 200 Index (Index:^AXJO) is heading for its best session this month on growing optimism that the global economy is finally on the path to recovery.

Markets may have passed peak COVID-19  pain and investors should be reassessing their ASX share portfolio to best position themselves for the post pandemic world.

If you are looking for clues on the stocks you should and shouldn’t hold, Macquarie Group Ltd (ASX: MQG) may have some answers as its analysts looked at stock returns in the 1990 recession.

Doesn’t repeat but rhymes

That was the recession we had to have where the unemployment rate jumped to over 10%. Economists expect a similar outcome for the job market during this coronavirus-inspired recession.

“We still think the market is in a range, as valuations limit upside. But without a second wave of Covid-19 and shutdowns, the worst of the contraction may have passed, and March 23 is the low,” said the broker.

“This puts us in Late Contraction; that part of the recession where stocks often go up even when unemployment rises above 10% as it did months later in 1990-91.”

Go overweight on resources

One sector that the broker is overweight on during this part of the market cycle is resources. The BHP Group Ltd (ASX: BHP) share price outperformed during the recession two decades ago and Macquarie thinks this will happen again.

Mind you, it’s not only BHP but also the other iron ore producers that Macquarie are tipping to be big winners this time round. This means you should add Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) to the list as well.

This is because the group is expected to generate strong free cash flows that can be used to pay dividends.

Gold standard

Gold miners also found a place in Macquarie’s model portfolio. The broker added Evolution Mining Ltd (ASX: EVN) and Saracen Mineral Holdings Limited (ASX: SAR) to its overweight list.

Another sector to find favour is communications as media stocks outperformed in the last recession. Macquarie is backing NEWS CORP/IDR UNRESTR (ASX: NWS) over Nine Entertainment Co Holdings Ltd (ASX: NEC), and is keeping its bullish view on Telstra Corporation Ltd (ASX: TLS) for its defensive qualities.

Bet on consumers

Macquarie is also encouraging investors to increase their exposure to consumer discretionary stocks as cyclical stocks tend to outperform in a recovery. Stocks highlighted by the broker are Crown Resorts Ltd (ASX: CWN), Wesfarmers Ltd (ASX: WES) and Aristocrat Leisure Limited (ASX: ALL).

Sectors to avoid

On the flipside, Macquarie is recommending investors go underweight on financials, healthcare and technology.

It is also suggesting investors reduce their exposure to Australian real estate investment trusts (AREITs).

More reading

• Here’s why the Fortescue share price hit an all-time high today
• Is the ASX 200 getting too far ahead of itself?
• Could ASX 200 iron ore shares save the Australian economy?
• Are CBA shares in the buy zone?
• 3 ASX shares that will have strong dividends in 2020

Motley Fool contributor Brendon Lau owns shares of Aristocrat Leisure Ltd., BHP Billiton Limited, Macquarie Group Limited, Rio Tinto Ltd., and Telstra Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Crown Resorts Limited and Nine Entertainment Co. Holdings Limited. 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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