When it comes to long-term investing, success is often less about perfect timing and more about owning the right Aussie stocks.

Buy and hold investing works best when you focus on companies with strong competitive advantages, robust balance sheets, and growth opportunities that can play out over many years.

With that in mind, here are three Aussie stocks that tick these boxes and could be worth buying and holding for the long term.

ResMed Inc. (ASX: RMD)

The first Aussie stock to buy and hold could be sleep disorder treatment company ResMed.

What makes ResMed compelling is not just what it sells, but how deeply embedded it has become in patient care pathways. Once a patient is diagnosed and prescribed therapy, ResMed’s products often become part of their daily routine for years. That creates unusually long customer lifecycles.

Beyond devices, ResMed has been steadily expanding its digital ecosystem, giving healthcare providers better data and insights into patient outcomes. This shifts the business from being product-led to system-led, which can strengthen relationships and reduce the risk of disruption.

For long-term investors, ResMed’s ability to evolve alongside healthcare systems, rather than simply sell into them, is what makes it attractive to hold through cycles.

REA Group Ltd (ASX: REA)

Another Aussie stock well suited to a buy and hold strategy is REA Group.

REA’s strength lies in how essential it has become to the Australian property ecosystem. Real estate agents, developers, and vendors do not treat realestate.com.au as optional advertising. It is infrastructure for property marketing.

What is often underappreciated is REA’s flexibility. When listing volumes slow, the company has multiple levers it can pull, including premium products, depth listings, and data services. That allows revenue to grow even when transaction activity is uneven.

Over time, REA has shown that it does not need a booming housing market to make progress. It just needs to remain indispensable. That is a powerful position for a long-term holding.

TechnologyOne Ltd (ASX: TNE)

A final Aussie stock to consider buying and holding is enterprise software company TechnologyOne.

TechnologyOne’s appeal is rooted in longevity. Its customers often stay for decades, not because switching is impossible, but because the software becomes tightly woven into how organisations operate. That creates a slow-moving but highly durable revenue base.

The company’s transition to cloud delivery has not changed its customer base so much as it has changed the economics of the business. Revenue is now recognised more smoothly, cash flows are more predictable, and reinvestment decisions can be made with greater confidence.

And while it has been growing at a strong rate for many years, management doesn’t expect this run to end. It believes TechnologyOne can double in size every five years.

The post 3 Aussie stocks to buy and hold forever appeared first on The Motley Fool Australia.

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• These ASX shares look cheap and could reward patient investors
• How much could a $10,000 investment in these ASX 200 stocks be worth if they hit 12 month targets?
• 3 ASX growth shares to buy before they rebound
• 3 ASX 200 large-cap healthcare shares just re-rated by experts

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

On Wednesday, the S&P/ASX 200 Index (ASX: XJO) pushed higher thanks to the banks and miners. The benchmark index rose 0.8% to 8,927.8 points.

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

ASX 200 to fall

The Australian share market looks set to fall on Thursday following a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 35 points or 0.4% lower this morning. In late trade in the United States, the Dow Jones is up 0.4%, but the S&P 500 is down 0.4% and the Nasdaq is down 1.4%.

Oil prices rise

ASX 200 energy shares including Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a good session on Thursday after oil prices charged higher overnight. According to Bloomberg, the WTI crude oil price is up 3.1% to US$65.15 a barrel and the Brent crude oil price is up 3.2% to US$69.47 a barrel. Traders were buying oil in response to reports that US-Iran talks are collapsing.

Neuren shares on watch

Neuren Pharmaceuticals Ltd (ASX: NEU) shares will be on watch today after the pharmaceuticals company released an announcement after the market close on Wednesday. That announcement reveals that Neuren has received US FDA meeting feedback for NNZ-2591 clinical development in hypoxic ischemic encephalopathy (HIE) and Pitt Hopkins syndrome. It said: “We received useful guidance from FDA for our programs in Pitt Hopkins syndrome and HIE and are incorporating the feedback into our plans, although we were disappointed that in both cases the guidance was received as Written Responses Only and was delayed relative to FDA’s goal dates.”

Gold price rises

ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a decent session on Thursday after the gold price edged higher overnight. According to CNBC, the gold futures price is up 0.35% to US$4,951.7 an ounce. Traders have been buying the precious metal after a significant pullback earlier this week.

Buy Nufarm shares

Nufarm Ltd (ASX: NUF) shares could be undervalued according to analysts at Bell Potter. This morning, the broker has retained its buy rating and $3.60 price target on the agricultural chemicals company’s shares. It said: “NUF continues to trade at a material discount to global peers (crop inputs ~9.3x FY26e EBITDA and seeds at ~10.0x FY26e EBITDA), despite favourable indicators for omega-3 returns in FY26e and demand indicators in the higher margin northern hemisphere crop protection markets looking generally supportive.”

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

More reading

• Neuren Pharmaceuticals shares FDA meeting feedback on NNZ-2591 clinical programs
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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 Scott Phillips.

When I think about dividend investing, I’m looking for businesses that can keep paying reliable income through different economic cycles and still be standing a decade or two from now.

Australia is actually a great place to do this. Our market is home to several large, well-established dividend stocks with predictable cash flows, strong balance sheets, and long histories of returning capital to shareholders.

These are five Australian dividend stocks I’d be comfortable buying and holding for the long haul.

Transurban Group (ASX: TCL)

Transurban is one of the most dependable income generators on the ASX. Its toll roads sit in major cities where traffic demand is driven by population growth, commuting patterns, and congestion rather than discretionary spending.

What makes Transurban particularly attractive for long-term dividend investors is the visibility of its cash flows. Many of its toll roads have inflation-linked pricing and long concession lives, which supports predictable and growing distributions over time.

This is the kind of infrastructure asset that quietly compounds income year after year, making it a natural foundation for a forever dividend portfolio.

APA Group (ASX: APA)

APA owns and operates critical energy infrastructure across Australia, including gas pipelines and storage assets. These are essential services that the economy relies on regardless of short-term conditions.

The strength of APA’s dividend profile comes from long-term contracts with high-quality counterparties. That contractual revenue underpins stable cash flows and supports consistent distributions.

For investors focused on income, APA offers resilience. Energy infrastructure doesn’t need strong consumer confidence or booming markets to keep generating cash.

Telstra Group Ltd (ASX: TLS)

I think Telstra is a classic defensive dividend stock. It operates Australia’s largest telecommunications network and provides services that people and businesses rely on every day. Mobile, broadband, and data demand tend to be remarkably stable, even when economic conditions soften.

Telstra’s dividends are supported by recurring revenue and a simplified business following years of restructuring. For income-focused investors, it offers a blend of yield, stability, and modest growth that can play an important role in a long-term portfolio.

Woolworths Group Ltd (ASX: WOW)

Woolworths may not always deliver exciting growth, but I think it offers something just as valuable for dividend investors. That is reliability.

People need groceries regardless of the economic backdrop, and Woolworths’ scale gives it structural advantages in sourcing, distribution, and pricing. While earnings can fluctuate year to year, the long-term demand profile is very stable.

I think this means Woolworths could provide a steadily growing income stream backed by an essential business.

Commonwealth Bank of Australia (ASX: CBA)

Commonwealth Bank remains the premium bank on the ASX. Its strong brand, leading digital capability, and dominant position in retail banking have supported consistent profitability and dividends over many years. While bank earnings are cyclical, CBA has repeatedly shown an ability to generate attractive returns through different environments.

For long-term investors, I think CBA’s dividends offer a mix of income, franking credits, and relative stability compared to more leveraged or speculative sectors.

Foolish takeaway

Buying Australian dividend stocks to hold forever isn’t about finding the highest yield today. It’s about owning businesses that can keep paying and growing income through good times and bad.

Transurban, APA, Telstra, Woolworths, and Commonwealth Bank each bring something different to the table, but they share one important trait. They have durability, which is exactly what I want in an income portfolio.

The post The best Australian dividend stocks to buy and hold forever appeared first on The Motley Fool Australia.

More reading

• Australian defensive stocks to buy now for stability
• Don’t buy CBA shares until this happens
• What should you do with your CBA shares in 2026?
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• 3 ASX dividend shares that still beat bank interest rates

Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia and Transurban Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Apa Group, Telstra Group, Transurban Group, and Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When markets are near record highs, it’s natural to wonder whether the next big move is down. I get asked this a lot. Are we due for a crash, or is this just the usual anxiety that shows up whenever prices run hot?

My short answer is this. A crash is always possible. But based on what I can see today, it is not the outcome I’m planning my investing around.

What people usually mean by a stock market crash

Most investors use the word crash loosely. A 10% pullback feels dramatic in the moment, but it is actually very normal. Even 15% falls show up regularly across market history.

A decline of 10% to 20% is referred to as a market correction.

A true crash is different. That usually involves a sudden, severe decline driven by a shock the market did not see coming. Think financial system stress, a major policy mistake, or an unexpected geopolitical escalation.

Those events are rare. By definition, they are also hard to predict.

Why crash fears feel louder right now

There are understandable reasons investors are nervous.

Valuations in parts of the global market look full. A small group of large global stocks has driven a disproportionate share of returns over the past five years. Interest rates remain higher than many expected a few years ago. And recent volatility has left investors more sensitive to bad news.

On top of that, geopolitics has become noisier.

One example that keeps popping up is the Trump administration’s renewed push to gain control over Greenland. This has strained relationships between the US, Denmark, and the EU, including threats of tariffs. Then there are Russia-Ukraine, Israel-Palestine, and US-Iran tensions to consider.

Situations like this matter for markets because they can lead to trade retaliation, alliance instability, and supply chain disruptions. None of that is helpful for sentiment.

Why a major crash is not my base case

Despite those risks, I don’t think a full-blown crash is the most likely outcome before the end of 2026.

Corporate balance sheets are generally in decent shape. Banks are better capitalised than they were before past crises. Central banks are more cautious and data-driven, even if they sometimes move slowly. Importantly, many companies are still growing earnings rather than contracting.

Markets have also spent the past few years absorbing a lot of bad news. Inflation shocks, rapid rate rises, wars, and political uncertainty have all been digested to some extent. That doesn’t make markets immune, but it does mean we are not coming from a place of complacency.

What history teaches about timing crashes

One of the clearest lessons from market history is that crashes are almost impossible to time.

They tend to arrive when confidence is high, but they are usually triggered by something unexpected. Investors who sit in cash waiting for certainty often miss years of compounding while they wait for the perfect entry point that never quite arrives.

Volatility feels uncomfortable, but it is also the price of admission for long-term returns.

What I’m doing instead

Rather than trying to predict a crash, I’m sticking to what has worked over time.

I plan to continue investing as normal. That means buying quality ASX shares when I can get them at good prices. It means focusing on businesses with sustainable earnings, strong balance sheets, and sensible management teams. It also means accepting that there will be periods when markets pull back, sometimes sharply.

If volatility shows up, I see that as part of the process, not a signal to stop.

Foolish takeaway

A stock market crash is always possible. Pretending otherwise would be naive.

But planning your entire investment strategy around that fear can be just as costly. I’m siding with the view that markets are more likely to grind forward with bumps along the way than fall off a cliff. My focus remains on steadily building positions in quality ASX shares, or ETFs like Vanguard Australian Shares Index ETF (ASX: VAS) and iShares S&P 500 AUD ETF (ASX: IVV), and letting time and compounding do its thing. I’d rather be prepared for volatility than paralysed by it.

The post What’s the likelihood of a stock market crash before the end of 2026? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended iShares S&P 500 ETF. The Motley Fool Australia has recommended iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX shares haven’t been uniformly kind lately. Many high-quality companies have been pulling back and leaving some fundamentally sound businesses trading at valuations that resemble discounts rather than growth premiums.

From tech-enabled marketplaces to global gaming and beaten-down fund managers. Stocks such as REA Group Ltd (ASX: REA), Aristocrat Leisure Ltd (ASX: ALL), and GQG Partners Inc (GQG) all lost 25% or more in the past 12 months.

At the current levels, these ‘cheap’ ASX shares offer potential long-term upside, if you’re willing to look past short-term volatility and broader market headwinds.

REA Group Ltd (ASX: REA)

The ASX share pulled back from recent highs and has declined around 28% over the past year, even as the underlying digital real estate business continues to grow. REA Group owns and operates realestate.com.au, Australia’s dominant online listing marketplace.

It’s a business with pricing power and strong cash flow that has historically compounded returns for long-term holders. Recent quarterly results showed revenue and EBITDA growth, driven by yield increases even as property listings softened. 

A key strength is its market leadership and recurring services. However, regulatory scrutiny and high valuation multiples relative to historical averages could cap near-term gains. If Australia’s housing market regains momentum or REA executes on AI-driven tools, sentiment around this ASX share could turn. It would make its current weakness a potential entry point.

Aristocrat Leisure Ltd (ASX: ALL)

The valuation and risk profile of Aristocrat Leisure have come under pressure. It has put the ASX share on cheap screens relative to longer-term growth history.

Sales and revenue were mixed, with recent softness prompting share weakness despite record deployments and recurring earnings from digital gaming segments. 

The company operates globally across land-based casino machines and digital/mobile gaming, a diversification that’s a structural strength as consumer preferences shift. But cyclical exposure to gaming spend, regulatory risks in key markets, and FX headwinds can make earnings lumpy.

Aristocrat’s disciplined capital management — including buybacks and debt reduction — supports earnings quality. Mergers and acquisitions, optionality, and online game portfolio expansion could re-rate multiples if growth stabilises.

Investors looking for growth plus some defensive earnings might find the current price range appealing, but patience is key.

GQG Partners Inc (ASX: GQG)

This ASX share has been one of the more beaten-down names. GQG Partners’ share price is down almost 25% over the past year as investor flows fluctuated and performance lagged some benchmarks. 

The global active asset manager reported double-digit revenue and net profit growth, but net inflows declined, which spooked sentiment. GQG’s strengths include a diversified global investment franchise, high margins, and generous dividends, with a payout often cited among sector highs.

Weaknesses include sensitivity to fund flows and periods of underperformance in defensive portfolios, which compresses assets under management and fees. However, brokers like Macquarie see potential catalysts that could drive a recovery from depressed valuations. 

For value-oriented investors willing to tolerate volatility, the ASX share’s current setup may offer compelling risk-reward.

The post These ASX shares look cheap and could reward patient investors appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 Gqg Partners. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Although we’re barely one month into 2026, we’ve already seen significant uncertainty in global markets. We’ve witnessed whipsawing precious metal prices, with gold and silver having one of their most volatile months in history over January. We’ve seen market reactions thanks to the seemingly now-abandoned ambitions of the United States to take control of Greenland. As well as huge swings in sentiment following the revelation of the new Chair of the US Federal Reserve, Kevin Warsh.  

And it’s only early February. 

With all that’s been going on in global markets recently, many ASX investors are probably craving stability in their ASX share portfolios. One of the best ways investors can insulate their portfolios from this uncertainty is by buying defensive stocks.

Defensive stocks are usually defined as companies that exhibit relatively high stability in their revenues, earnings, and profits. Most operate in defensive sectors like consumer staples, industrials, utilities, and telecommunications. Demand for goods and services in these sectors tends to be less affected by prevailing economic conditions than in other sectors.

Today, let’s discuss a few ASX defensive stocks that I think can benefit any investor seeking stability and predictability in 2026 and beyond. 

Three defensive ASX stocks to buy in an uncertain world

First up, we have Telstra Group Ltd (ASX: TLS). This ASX telco is a favourite of dividend investors, and for good reason. It has a strong track record of delivering reliable dividend income, thanks to its defensive earnings base. Telstra possesses a wide moat that’s built on both a strong brand and a reputation for offering the best mobile network in the country. Using this moat, this defensive stock has proven that it can both protect and grow its earnings base in all manner of economic conditions. 

Next, Coles Group Ltd (ASX: COL) is worth consideration as a defensive ASX stock. Coles has an extensive network of supermarket stores and bottle shops around Australia. We all need to eat and stock our households on a regular basis. As long as Coles provides one of the cheapest and most convenient avenues to do so, it should do well. Coles also has a strong dividend track record, which I believe proves its defensive chops. This company has increased its annual dividends every year since 2019.

Another defensive stock that nervous investors might wish to look at is toll road operator Transurban Group (ASX: TCL). Transurban operates the largest network of tolled roads in the country, with a particularly strong presence in Sydney and Melbourne. Managing these vital pieces of infrastructure gives this company a highly predictable stream of cash flow. In most cases, it is indexed to inflation, too. This has benefited Transurban investors in recent years through stable dividends. If you are worried about the health of the global economy in 2026, this is a final stock I would be looking at adding to a portfolio. 

The post Australian defensive stocks to buy now for stability appeared first on The Motley Fool Australia.

More reading

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

Yesterday afternoon, Neuren Pharmaceuticals Ltd (ASX: NEU) shared feedback from recent US FDA meetings on its NNZ-2591 clinical programs. Neuren said it received constructive guidance for its development plans in hypoxic ischemic encephalopathy (HIE) and Pitt Hopkins syndrome (PTHS), with minimal impact on funding or timelines.

What did Neuren Pharmaceuticals report?

• Received written feedback from the US FDA for NNZ-2591 development in both HIE and PTHS.
• FDA generally accepted Neuren’s plans for an IND-opening clinical study in HIE and offered input on study criteria and safety monitoring.
• FDA recommended additional juvenile animal data to support dosing in neonatal HIE studies, with plans to generate this data ahead of next steps.
• For PTHS, FDA supported use of a clinical global impression (CGI) scale as a co-primary endpoint with an observer-reported measure.
• Neuren anticipates providing an update on its Koala Phase 3 Phelan-McDermid syndrome trial soon.

What else do investors need to know?

Neuren described the FDA’s response process as delayed and conducted entirely in writing, rather than face-to-face meetings. However, the company remains confident it has a “clear path forward” for both HIE and PTHS programs.

For HIE, initial clinical studies are targeted to start later in 2026, after extra preclinical data is complete and an IND application is submitted. Meanwhile, Neuren is exploring trial design options for PTHS to suit its rarity and the severity of the condition, flagging a likely need for further FDA engagement before commencing the next study.

What did Neuren Pharmaceuticals management say?

CEO Jon Pilcher said:

We received useful guidance from FDA for our programs in Pitt Hopkins syndrome and HIE and are incorporating the feedback into our plans, although we were disappointed that in both cases the guidance was received as Written Responses Only and was delayed relative to FDA’s goal dates. Overall, we have a clear path forward and remain well positioned to fund the programs, with minimal financial impact from the feedback. We remain committed to advancing NNZ-2591 as a potential treatment option for both the HIE and Pitt Hopkins communities, which have such urgent unmet need. In the meantime, we anticipate being able to provide an update shortly on progress in the ongoing Koala Phase 3 trial in Phelan-McDermid syndrome, our lead program for NNZ-2591.

What’s next for Neuren Pharmaceuticals?

Neuren plans to generate the additional animal study data required by the FDA and then proceed with its IND application for HIE, aiming for clinical trial startup later in 2026. The company also intends to finalise the optimal trial design for a future PTHS study, including consulting the FDA as needed.

Investors can look for upcoming news on Neuren’s Koala Phase 3 trial for Phelan-McDermid syndrome, which is its most advanced NNZ-2591 program. The company says it is well resourced to fund ongoing clinical work.

Neuren Pharmaceuticals share price snapshot

Over the past 12 month, Neuren Pharmaceuticals shares have risen 11%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 7% over the same period.

View Original Announcement

The post Neuren Pharmaceuticals shares FDA meeting feedback on NNZ-2591 clinical programs appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

It hasn’t been a good period to have owned Commonwealth Bank of Australia (ASX: CBA) shares over the past six or seven months. Back in the middle of last year, CBA stock was riding high, having hit a new all-time record of $192 a share in late June. But since then, it has been nothing but bad news for this ASX 200 bank stock.

Since the June 2025 high, CBA shares have fallen by around 18%, going off the $156.96 share price we see on Wednesday (at the time of writing). The falls were even more painful (approaching 25%) when the bank got near $147 a share last month.

With a drop of this magnitude, many investors might be feeling tempted to ‘buy the dip’ on CBA. After all, this is one of the most popular stocks on the ASX, one that delivered a roughly 40% gain in 2024. Further, CBA is unquestionably one of the best-run businesses in Australia, commanding a clear market lead in Australian banking and financial services and enjoying phenomenal brand loyalty.

However, I would posit that investors anxious to get their hands on CBA shares at these lower prices should hold off for a few days. That’s because CBA is scheduled to report its latest earnings next week on 11 February.

Should investors wait until earnings before buying CBA shares?

Most ASX shares are required to report their latest financial results every six months. CBA is no different, and is taking its traditional place as one of the first companies off the line to deliver its results to shareholders for this February’s earnings season.

It’s particularly important for CBA this time around, given the meaningful share price correction it has just suffered. However, as we discussed this week, CBA is still trading at a relatively elevated valuation, whether measured by the price-to-earnings (P/E) or price-to-book (P/B) ratios, compared to both other ASX banks and banks around the world.

It’s common for companies that the market judges as offering above-average quality to trade at lofty valuations. But, at the end of the day, investors will still want to see some decent growth to justify their investments.

This time last year, CBA delivered some numbers that didn’t exactly set the world on fire. For the bank’s half-year to 31 December 2024, CBA reported a 3% rise in operating income, a 2% increase in cash net profits after tax and a 2.3% improvement in cash earnings per share.

If CBA reports numbers that look like that next week, I think investors will start to wonder why they are paying a P/E ratio of almost 26 and a book ratio of over 3.

I’d certainly want to know what CBA managed to bring in over the second half of last year before committing to an investment with those kinds of valuations.

The post Don’t buy CBA shares until this happens appeared first on The Motley Fool Australia.

More reading

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• What happened with the big four ASX 200 bank stocks like ANZ and CBA shares in January?

Motley Fool contributor Sebastian Bowen 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.

When people talk about retiring early, it often sounds unrealistic or reserved for high earners. I don’t see it that way. For anyone starting in their 20s or 30s, ASX dividend shares offer a very practical path to building a portfolio that can eventually replace a salary.

It doesn’t require perfect timing or risky bets. What it does require is time, consistency, and a willingness to let income compound quietly in the background.

Here are the three reasons I think ASX dividend investing can genuinely support early retirement.

Dividends turn investing into an income engine

One of the most appealing things about ASX dividend shares is how tangible the progress feels.

Instead of waiting decades for a payoff, dividends mean the portfolio starts producing income along the way. In the early years, that income might seem small. But when dividends are reinvested, they buy more shares, which then produce more dividends. Over time, that cycle quietly builds momentum.

Eventually, when the portfolio reaches a sufficient size, those same dividends no longer need to be reinvested. They can be redirected toward covering living expenses. That shift from reinvesting income to living off it is what makes early retirement achievable in a very practical sense.

You’re not forced to sell assets at the right time. The portfolio simply keeps paying you.

Australia’s dividend system works in your favour

One of the biggest advantages Australian investors have is the local dividend system.

Many ASX shares, such as Telstra Group Ltd (ASX: TLS) and Woolworths Group Ltd (ASX: WOW), pay fully or partially franked dividends. For long-term investors, especially those planning to retire early on a lower taxable income, those credits can materially lift after-tax income.

This means an ASX income portfolio does not need to chase extreme dividend yields to be effective. A well-diversified portfolio yielding 4% to 5%, supported by franking credits and dividend growth over time, can be far more sustainable than higher-yield strategies that carry extra risk.

That tax efficiency is a quiet but important tailwind when the goal is replacing employment income earlier than usual.

Time and consistency are key

The earlier someone starts, the less dramatic their contributions need to be.

Monthly investing spreads risk across market cycles and removes the pressure to time entries. It also turns saving into a habit rather than a decision you need to revisit every few months.

Starting in your 20s or 30s gives compounding decades to work. In the early years, progress feels slow and often unexciting. Most of the portfolio value comes from your own contributions. But over time, the balance shifts. Dividends grow, reinvestment accelerates, and the portfolio begins to snowball.

By the time many people reach their 50s, the income generated by a mature dividend portfolio can be meaningful enough to reduce work hours or exit full-time employment altogether.

For example, $500 invested monthly, compounded at 9% per year, would grow to over $530,000 in 25 years.

Foolish Takeaway

Early retirement doesn’t require a lucky break or a perfect strategy. It requires starting early enough and sticking with a sensible plan.

ASX dividend shares, combined with monthly investing and reinvestment, offer a clear path to building a growing income stream that can eventually replace a salary. For investors willing to think long term and stay consistent, retiring early is not just possible. It’s a very realistic outcome.

The post 3 reasons ASX dividend shares could help you retire early appeared first on The Motley Fool Australia.

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

Here are three ASX shares that have caught my eye today.

Life360 Inc (ASX: 360)

Life360 shares have dropped another 5.94% on Wednesday, to $26.94 a piece. The latest decline means the shares are now down over 50% from their peak in October last year, and for the year-to-date, Life360 shares have fallen 17.01%.

There hasn’t been any price-sensitive news out of the business today, which suggests the latest daily decline is down to broad tech market weakness, dwindling market sentiment and potentially investors taking gains off the table.

But I think the new share price presents a great opportunity for investors to buy the tech stock at a discount. Its latest quarterly update in late January was well ahead of guidance and forecasts. Life360 said it continues to see strong user acquisition and monetisation in both its core US and fast-growing international markets. The company expects more growth this year, too.

Analysts are mostly bullish on the shares’ outlook this year, with some tipping a target price as high as $49.69 over the next 12 months. That implies an 84.45% upside at the time of writing.

Iperionx Ltd (ASX: IPX)

Iperionix shares closed 0.44% higher on Wednesday afternoon at $6.82 per share. For the year-to-date, the ASX materials share has already climbed 17.79%

The titanium metal and critical materials company was one of the best-performing stocks on the ASX index in January, after it received a prototype purchase order valued at US$300,000 from American Rheinmetall.

Late last month, the company said it would ramp up production in order to become America’s largest and lowest-cost titanium powder producer. And I’m optimistic that this growth will keep building through 2026, and that the company’s share price will follow suit.

Analysts are equally bullish and have a strong buy consensus rating on its shares. The maximum target price is $11.03, which implies a potential 61.67% upside at the time of writing.

Electro Optic Systems Holdings Ltd (ASX: EOS)

EOS shares are a compelling option for investors seeking exposure to global defence stocks. The ASX shares have dropped 7.59% to close at $7.56 a piece on Wednesday. The latest decline represents a 24.22% fall for the year-to-date.

The shares have fallen sharply since late January, dropping over 30% within the last two weeks alone. It looks like investors locked in their gains late last month, and then the sell-off has continued into February after speculation that the company might move its headquarters and stock market listing from Australia to Europe to capitalise on rapidly rising defence spending across the region.

But I still think there is plenty of potential left for the Aussie defence stock, and I’m confident it’ll continue to benefit from surging demand for exposure to the defence sector amid ongoing geopolitical volatility. With that in mind, the current share price looks like a bargain.

The shares remain a strong buy among investors, with a maximum target price of $12.72. That implied a potential 68.25% upside at the time of writing. 

The post 3 ASX shares I’d buy with $10,000 today appeared first on The Motley Fool Australia.

More reading

• These ASX 200 shares could rise 50% to 80%
• Here are the top 10 ASX 200 shares today
• EOS shares tumble on European listing update
• Can this ASX 200 tech share power higher from here?
• Why these ASX growth shares could still be early in their story

Motley Fool contributor Samantha Menzies 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 Electro Optic Systems and Life360. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.