Picking winning investments so far this year has been a difficult task with macroeconomic issues muddying the waters. As the ‘cheap’ money is wound down by central banks, growth is settling back into a more sustainable trend. However, the Northern Star Resources Ltd (ASX: NST) share price hasn’t been negatively affected by this.

On the contrary, the second-largest ASX-listed mining company has been enjoying a run-up in recent weeks. To be precise, the company’s shares are now up 17% from where they were a month ago. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down a disappointing 0.1%.

What’s behind the added lustre?

As many investors would know, gold is considered to be somewhat of a safe haven during times of uncertainty. When markets become more fearful and go risk-off, the precious metal often siphons up a portion of the fleeing funds.

Inflation has been a common thematic behind an investment case for gold. Supply chains are still struggling, while elevated demand is failing to be met with new supply across various markets.

Numerous ASX-listed companies have warned of inevitable price reasons as they begin to feel the bite of inflationary costs. Fortunately for the Northern Star share price, this is the type of scenario where it can thrive.

The onset of a conflict between Russia and Ukraine has amplified these issues. Investors are now factoring in increased commodity prices and are seeking more defensive assets.

The byproduct is a gold price that is 7.1% stronger from a month ago. At the time of writing, the physical asset is worth US$1,936 an ounce. As shown in the chart below, this coincides with the S&P/ASX 200 VIX — or volatility Index — spiking in late January and February.

Expectedly, ASX-listed Northern Star Resources has rallied in unison with higher gold prices.

Tracking the Northern Star Resources share price

The uptick in the gold mining company’s share price is a welcome reversal for shareholders. Previously, the Northern Star share price had been trending downwards since May 2021, falling 28% in the process.

However, the recent boost means investors in the mining company are now up 3.9% over the past year. Though, when adding on dividends, the total return expands to around 6% — which isn’t too shabby.

The post Northern Star (ASX:NST) share price is shining 17% brighter than a month ago appeared first on The Motley Fool Australia.

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• Here’s why ASX gold shares are having another stellar day
• 5 things to watch on the ASX 200 on Wednesday
• Here’s why ASX gold shares just had their best month in 2 years
• 5 things to watch on the ASX 200 on Tuesday
• Is Bitcoin or gold a better buy for these uncertain times?

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 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 Bruce Jackson.

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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.

What happened 

After an impressive few weeks, the value of cryptocurrencies fell sharply on Thursday. The biggest market news was Federal Reserve chair Jerome Powell saying that he expected to support a short-term interest rate increase at March’s Fed meeting, which some investors may have thought was currently off the table. 

At 12:50 p.m. ET, Ethereum (CRYPTO: ETH) had fallen 5% in the last 24 hours, Solana (CRYPTO: SOL) was down 7.6%, and Cardano (CRYPTO: ADA) was down 5.9%. 

So what 

Powell told lawmakers yesterday that he would support a small increase in interest rates at the next Federal Reserve meeting, which is in two weeks. His comments were taken as a negative for risk assets and some growth stocks, which have risen in the last few weeks as geopolitical turmoil and slower growth from businesses led to speculation that the central bank would put off its expected hikes. But Powell is more concerned about inflation right now, which could end up getting out of control if rates stay low for too long.

While the Federal Reserve controls short-term interest rates through its bond purchases, it has less impact on longer-term rates that are determined by the market. That’s why it’s interesting that mortgage rates, which are usually tied to the 10-year treasury rate, are down because investors see slowing growth for the economy. 

Some of the crypto euphoria about demand in Russia and Ukraine may be wearing off too. There have been multiple reports over the last few days that millions of dollars in cryptocurrency are flowing into Ukraine while Russians are trying to convert rubles to cryptocurrency to get money out of the country. This may indeed be taking place, but volumes of a few million dollars aren’t enough to sustain a move in the multi-trillion-dollar crypto market for long. 

Now what 

On days like today, perspective is always important. While cryptocurrencies are down today, they’re still up big over the past week. Ethereum is up 16.4%, Solana is up 13.5%, and Cardano is up 12.2% in the last 7 days, despite today’s drop. 

I also don’t see any news that fundamentally undermines the long-term investment thesis in cryptocurrencies, especially those building utilities like the ones mentioned here. Developers are still building, more users are coming into the market, and long-term the future is still bright. 

Chalk up today’s move as volatility in the market and in cryptocurrency anything can drive volatility. Over the next few weeks and months it’s likely there will continue to be wild swings as interest rates rise and news about Russia’s invasion of Ukraine continues to come out, so prepare for more volatility ahead. 

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

The post Why Ethereum, Solana, and Cardano dropped today appeared first on The Motley Fool Australia.

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• Considering adding crypto to your super? Read this
• How might the Ukraine crisis impact the Ethereum price?
• Why these 2 cryptos are booming in 2022 as the Bitcoin price wallows
• Sanctions are a good thing? Why Bitcoin, Ethereum, and Dogecoin are recovering nicely today
• Ethereum price down again today as founder touts benefits of ‘crypto winter’

Travis Hoium owns Ethereum and Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Ethereum. The Motley Fool Australiaowns and has recommended Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 

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

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Investing in ASX shares is as much about controlling and regulating one’s temperament as it is about knowing the intricacies of the global financial system.

Having a long-term investment horizon is the advocate of most experts in the field, while refraining from speculative, over-priced assets at the same time. In stock investing, that requires making an informed decision on a raft of fundamental factors, not least the current economic climate.

Alas, the assumption is, that in order to beat the market, there must be some kind of magical elixir that separates the ‘amateurs’ from the market pundits.

Well, that’s not so much the case, and most experts corroborate that you don’t need an IQ of 160 to excel in the market. It’s the right mindset, temperament and emotion control that might do the trick. That often means following a systematic approach, not unlike Warren Buffet’s 7 rules to investing, for example.

Key lessons for ASX share investors from an expert

It appears ASX share investors who have the right mindset are set to perform well over the long run. That’s according to what David Guy, joint managing director of Leithner & Company Ltd, had to say for Livewire recently.

Guy notes investors who adopt a pragmatic approach to their investment reasoning might make better decisions. It’s all about the right mindset, staying away from “non-financial”, cognitive factors.

“In that regard, individual investors who have the right skills and temperament (or professionals who are unconstrained by popularity) may have an advantage over ‘the market’ as they are answerable only to themselves,” he said.

That involves knowing the business and industry you are investing in, Guy says.

Directly quoting investing legend Peter Lynch’s book, Beating the Street, he noted “you use your edge by investing in companies or industries you already understand”.

“Your investor’s edge is not something you get from Wall Street experts. It’s something you already have.”

What does that involve?

Investors should retain a long-term approach in their investment philosophy, avoiding the short-term market noise while maintaining conviction on the ASX share, Guy added.

This ultimately helps guide investment reasoning as well, in the sense of buying and selling decisions, which – if you’ve ever had to deal with a difficult loss on the stock market, you’ll know – can be quite complicated.

“You are not necessarily wrong just because ‘the market’ doesn’t agree with you in the short, medium, and sometimes even the long term,” Guy remarked.

“If a business remains attractive and the market pricing of that business remains attractive then you need to objectively review where you are at – would I buy this share at 4 cents, knowing what I know?”

“If so – and provided that you would remain appropriately diversified – then the fact you initially paid 33.6 cents for the same share should not preclude you from buying more.”

Ultimately Guy advocates that investors remove the “non-financial” components to their investment reasoning in order to achieve a better outcome in the ASX share market.

“Investors may do better in the long run if they are not forced to make investment decisions based on non-financial factors (embarrassment, sick of explaining negative results to clients etc),” he said.

In the words of Peter Lynch once more – “it pays to be patient, and to own successful companies”.

The post Think you have the ‘right skills’ for investing in ASX shares? Read this appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow 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 Bruce Jackson.

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Buy now, pay later (BNPL) shares are dropping from the ASX like flies, but there could be one standing in the wings to take some of the deserted places.

Former ASX favourite, Afterpay officially left the exchange earlier this year following its takeover by Block Inc CDI (ASX: SQ2), formerly named Square.

ASX BNPL fans were hit with more news earlier this week when Sezzle Inc (ASX: SZL) accepted a takeover offer posed by Zip Co Ltd (ASX: Z1P).

While the news temporarily boosted the Sezzle share price, it’s likely there will soon be one less BNPL stock on the Australian index.

Or will there? BizPay – a technology company providing instalment-style payment options for businesses – is planning to take on an initial public offering (IPO).

Here are all the details.

Will BizPay be the next ASX BNPL share?

BizPay is gearing up for a public listing, following in the recent steps of fellow financial disruptor, Beforepay Group Ltd (ASX: B4P).

As the name alludes, Beforepay provides users with early access to their salary.

Its share price has plunged 42% since its disastrous January float. Right now, stock in the company is trading at $1.10, a far cry from its IPO’s offer price of $3.41 per share.

But BizPay assumably expects its own listing to prosper.

BizPay charges users between 1% and 4% to split payments into either fortnightly or monthly instalments.

The BNPL company’s float could bring it access to additional capital, helping it to boost its business’ abilities.

It’s hoping to launch its ASX IPO in September, according to reporting by the Australian Financial Review.

The publication states BizPay counts Macquarie Group Ltd‘s (ASX: MQG) Macquarie Investment Management among its investors.

No doubt, all eyes will be on the company over the coming months to see if it will be the next ASX BNPL share.

As the AFR reports, BizPay’s average invoice is worth around $12,300 and customers generally use the service 5 times each month.

It currently boasts 1000 customers and expects that to increase to 12,000 this year.

If all goes to plan, BizPay will be reporting positive earnings before interest, tax, depreciation, and amortisation (EBITDA) by the end of next financial year.

The post Is the ASX set to welcome yet another BNPL share? Macquarie-backed company gears up for IPO appeared first on The Motley Fool Australia.

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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. owns and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Block, Inc. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

What happened

Following a rebound in the stock of Tesla (NASDAQ: TSLA) in late February that took it from below $800 closer to $900, the electric-vehicle (EV) maker’s shares are taking a breather on Thursday. The stock was down about 2.1% as of 10:20 a.m. ET today. 

The decline is likely primarily due to a bearish day for the overall market on Thursday, namely the tech-heavy Nasdaq Composite.

So what

Shares of Tesla have had a rough year so far. Year to date, the stock is down more than 18%. But even including the pullback on Thursday, shares are up 8% over the last five trading days.

Highlighting the bearish day for the overall market, the Nasdaq Composite is down about 0.8% at the time of this writing. But many growth stocks like Tesla are down several percentage points or more. 

Now what

Growth stocks like Tesla have seen significant volatility this year as investors weigh the impact of likely interest rate hikes by the Federal Reserve. Higher interest rates are generally viewed as less favorable for assets with valuations determined largely by expectations for higher cash flows far into the future. Tesla, with its price-to-earnings ratio of 176, certainly fits the bill of a growth stock. 

But investors should note that Tesla’s business has seen extraordinary growth recently. Fourth-quarter deliveries rose 71% year over year despite an extremely challenging environment for auto manufacturers. And management expects growth of 50% or more in vehicle deliveries this year — and that’s expected even if Tesla fails to get its two new factories up and running well. These factors arguably justify the stock’s premium valuation. 

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

The post Why Tesla stock fell on Thursday appeared first on The Motley Fool Australia.

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Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Tesla. 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 Bruce Jackson. 

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

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The Nick Scali Limited (ASX: NCK) share price is heading south during morning trade. This comes despite the company not releasing any market-sensitive news today.

At the time of writing, the furniture retailer’s shares are down 5.7% to $11.75.

Why are Nick Scali shares falling today? 

Following the company’s half-year results released last month, investors are eyeing Nick Scali shares as they go ex-dividend today.

This means if you purchased the company’s shares yesterday or before, you will be eligible for the latest dividend.

Traditionally, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors try to make a quick profit after securing the dividend.

What does this mean for Nick Scali shareholders?

For those eligible for Nick Scali’s interim FY22 dividend, shareholders will receive a payment of 35 cents per share on 28 March. The dividend is fully-franked, which means investors can expect to receive tax credits at tax time.

The dividend reflects a decline of 12.5% when compared against the prior corresponding period (40 cents per share).

Are Nick Scali shares a buy now?

Reflecting on the financial performance for the first half, analysts at Wilsons have weighed in on Nick Scali shares.

The broker raised its 12-month price target by 3.6% to $17.60 for the company’s shares. Wilson analysts believe that there is still more upside in the Nick Scali share price regardless of its mixed performance recently.

Based on the current share price, this implies an upside of about 49% for Nick Scali investors.

Nick Scali share price summary

Since the beginning of 2022, Nick Scali shares have fallen roughly 18% on the back of weakened investor sentiment. The company’s shares reached an all-time high of $16.30 in November, before backtracking thereafter.

Nick Scali commands a market capitalisation of roughly $1 billion and has a trailing dividend yield of 5.45%.

The post Why is the Nick Scali (ASX:NCK) share price sliding 6% today? appeared first on The Motley Fool Australia.

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• What’s the outlook for ASX retail shares like Kogan (ASX:KGN)?
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• Is the Nick Scali (ASX:NCK) share price a comfortable buy after HY22?
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Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

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It has been a disappointing few weeks for the Novonix Ltd (ASX: NVX) share price.

Since this time last month, the battery materials company’s shares have lost 22% of their value.

Why is the Novonix share price down 22% in a month?

The Novonix share price has come under pressure recently due partly to its larger than expected spending during the first half.

Last month the team at Morgans commented: “NVX spent $15.7m ($8.6m more than Morgans forecast) on operating activities and $112.4m ($22.5m more than Morgans forecast) on investing activities. Headcount has doubled in the Battery Testing Services (BTS) division and corporate overheads were pushed higher by one-offs and underlying increases.”

Though, it acknowledges that with $260 million of available cash, “it has plenty of headroom to continue to expand its production capacity.”

Nevertheless, due to the prospect of higher ongoing operating costs into FY 2023, potential ramp up delays, and the market’s current aversion towards growth shares, Morgans has lowered its valuation.

The broker currently has a hold rating and $4.88 price target on the company’s shares. This compares to the current Novonix share price of $5.20, which implies further potential downside of 6.1% for investors.

The post Why is the Novonix (ASX:NVX) share price down 22% in a month? appeared first on The Motley Fool Australia.

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

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The 88 Energy Ltd (ASX: 88E) share price has jumped significantly this week.

The price movement coincides with updates on two of the oil and gas explorer’s Alaskan projects — including a rig mobilisation and an oil interception.

At the time of writing, the 88 Energy share price is up 2.08% today at 4.9 cents. That’s a 28.9% gain on last Friday’s closing price of 3.8 cents. For comparison, the All Ordinaries Index (ASX: XAO) is currently down 0.17%.

So, what’s going on with 88 Energy?

Icewine oil obtained

The company’s Project Icewine site is located in the North Slope of Alaska — an area pertaining to about 195,000 acres in which the company has a 75% stake.

Today, the oil explorer announced that light oil had been “recovered” during tests at the neighbouring Pantheon Resources’ Talitha-A well.

As the Pantheon well is located 2.8 miles north of Icewine, 88 Energy says “all targets are interpreted to extend into 88 Energy’s Project Icewine acreage”.

The data from Pantheon, along with results obtained last year, will go into an “independent resource report for Project Icewine focusing on the eastern leases in the first half of 2022”.

Peregrine site update sparks 88 Energy share price jump

On Tuesday, the oil explorer gave an update into its Project Peregrine site — more specifically, its Merlin-2 well — also located in the same region of Alaska.

The well was initially spudded (drilled) in March last year, with drilling operations completed the following month.

A rig has been mobilised for drilling next week. It will be initially dug to a depth of 2,000 feet, with permission to extend to 8,000 feet.

88 Energy said a well production test has been implemented, with “equipment placed on standby during initial well site operations”.

Further, 88 Energy reported:

Flow testing of Merlin-2 will be contingent upon the wireline results, in particular the MDT outcomes, as well as government approvals and weather window considerations.

The company has a 100% working interest in the site.

The 88 Energy share price surged 9.5% on the day of the announcement, and 13% the following day.

What did management say?

Commenting on the Peregrine update, 88 Energy managing director and CEO Ashley Gilbert said:

We are now entering the final phase of pre-spud preparations and look forward with excitement to the next few weeks of drilling operations.

Success at Merlin-2 has the clear potential to be transformational for our shareholders and we look forward to providing updates as the drilling of this appraisal well progresses.

88 Energy share price performance

Over the past 12 months, the 88 Energy share price has increased by 380%. It saw a jump of 135% over four days in April last year after the explorer released an update on its Peregrine site.

Its shares have also soared by 92% this year to date.

The company has a market capitalisation of $762.48 million.

The post Why the 88 Energy (ASX:88E) share price has jumped 29% in a week appeared first on The Motley Fool Australia.

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Motley Fool contributor Alice de Bruin 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 Bruce Jackson.

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It certainly has been a difficult start to the year for the Australian tech sector. For example, since the start of the year, the S&P ASX All Technology index has lost 21% of its value.

This has been driven by the prospect of higher interest rates putting pressure on valuation multiples.

What’s the damage?

Goldman Sachs has been busy assessing the tech sector and notes that companies with little to no profits have been hardest hit. This includes the three Ns, Nearmap Ltd (ASX: NEA), Nitro Software Ltd (ASX: NTO), and Nuix Ltd (ASX: NXL).

It commented: “Technology companies with low/no profitability have been hardest hit by rising rates, falling -40% on average since the Nov-21 vs -24% for profitable tech and -14% for US tech. […] with the median company de-rating -25% and NEA, NXL, NTO de-rating >50%.”

Are there buying opportunities for investors?

Goldman believes this has created a few buying opportunities for investors. It notes that valuations are below pre-COVID levels now, despite the pandemic accelerating the shift to the cloud.

The broker explained: “A wide valuation gap has opened between profitable tech firms (trading on ~6x NTM EV/sales) vs. low/no profit firms (~5x) despite profitable firms growing at c.1/2 the pace. The ASX All Tech index has largely fallen in line with increasing real yields, with sector valuation now below pre-COVID levels while fundamentals are arguably stronger given the pandemic accelerated cloud/ technology adoption.”

Xero shares are a buy

In light of the above, Goldman believes the Xero Limited (ASX: XRO) share price is in the buy zone. This is despite reducing its valuation to reflect lower multiples.

It commented: “Given the recent de-rating of high growth, low profitability technology peers, we decrease our Xero 12mf TP by -15% to A$135/share, driven by a mark-to-market on growth adjusted multiples. We make no earnings changes.”

Based on the current Xero share price of $98.30, this implies potential upside of 37% for investors over the next 12 months.

The post Goldman says the tech selloff has made Xero (ASX:XRO) shares a buy appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Nearmap Ltd. and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. The Motley Fool Australia owns and has recommended Nearmap Ltd. and Xero. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

Over long periods of time, investing in stocks has enabled ordinary people build substantial amounts of wealth. A key problem with stock picking, however, is that not every stock turns out to be a winner, and you often can’t tell which ones will turn out to be duds before it’s too late to do anything about it. Populate your portfolio with too high a proportion of losers, and the money you hoped to accumulate by the time you retire simply won’t be there for you.

That’s what makes the Vanguard Total World Stock Index ETF (NYSEMKT: VT) such a compelling potential investment. By buying shares in a broad, globally diversified pool of stocks from nearly every corner of the globe, that exchange-traded fund takes away the need to try to separate the winners from the losers. Investors in that ETF will get returns about in line with the global stock market in general, rather than individual stocks in particular. That’s how investing in this ETF right now could make you a millionaire retiree. 

Low cost, decent potential returns

The Vanguard Total World Stock Index ETF sports a modest 0.07% expense ratio, which means its investors get nearly all the potential returns of owning the underlying stocks, for far less effort. Indeed, since the ETF’s inception in 2008, investors have seen an average annualized return around 7.75%, which is in line with the benchmark it attempts to track. 

Returns like that are never guaranteed, but it if they continue, they can provide many investors with a path to millionaire status by the time they retire. The table below shows how many years it will take to reach a $1 million nest egg starting from scratch, depending on the rate of return you earn and the amount you can sock away each month.

Monthly Investment	8% Annual Returns	6% Annual Returns	4% Annual Returns
$1,500	21.3	24.5	29.3
$1,250	23.1	26.9	32.5
$1,000	25.5	29.9	36.7
$750	28.7	34.0	42.4
$500	33.4	40.1	51.0

Calculations by author.

Each of those dollar amounts represents an amount that can be contributed by an employee in a typical 401(k) plan. For people under age 50, the limit in 2022 is $20,500 per year  — or just over $1,700 per month.  

If history is any guide, this means that making regular investments in the Vanguard Total World Stock Index ETF can help ordinary people become millionaires by the time they retire. The key, though, is to get started soon. Notice that for any given return rate in that table, the longer your time frame, the less you need to invest each month to reach millionaire status.

In addition, socking away more each month could still help you reach that target in a reasonable time, even if future returns aren’t as strong as past returns have been. If you’re not able to save as much as you would like right away, getting started with what you can save is a better idea than waiting. After all, the sooner you get started, the more time you’ll have on your side to let the market’s compounding work its magic over time.

Why buy the world?

The biggest advantage that the Vanguard Total World Stock Index ETF offers is the fact that as an investor in it, you’re not trying to separate the winners from the losers. You’re not making an overly outsize bet on a particular sector, company, or even country for that matter. You’re betting on long-term economic growth and innovation, and total returns over time. Virtually no matter where those returns come from, you can benefit from them.

Of course, there still is no such thing as a free lunch when it comes to investing. One key potential issue with this ETF is that, like most index-related ETFs, it is market-capitalization weighted.  That means the biggest publicly traded companies out there have the biggest impact on the fund’s performance.

The risk that brings is that the fund’s top 10 holdings collectively represent a whopping 13% of the EFT’s total capitalization, and nine of those 10 holdings are U.S.-based businesses. As a result, the fund may not give you quite as strong a diversification play as you would have hoped, particularly if the rest of your investing is already heavily weighted in large, American companies.

Another potential issue you might find with this ETF is that it invests virtually everywhere. That means if you buy it, you can’t pick and choose which industries or countries you invest in, and you might end up with a stake in a company or country you don’t personally approve of.

Still, if you want an easy way to build a broad-based portfolio, the Vanguard Total World Stock ETF is worth considering. It’s a simple-to-buy, one-stop shop that lets you get access to the world’s stock market for an incredibly low overhead cost.

Start your investing journey today

No matter how you ultimately choose to invest, the time you have between now and when you retire is the most important asset you have on your journey. The sooner you begin investing, the better your chances are of reaching retirement as a millionaire. So get started now, and take that all-important first step to a stronger financial future. 

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

The post Could investing in this ETF right now make you a millionaire retiree? appeared first on The Motley Fool Australia.

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Chuck Saletta 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 Bruce Jackson.

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

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