I believe that nearly everyone has the capability of reaching a good retirement fund number. However, you can’t let some retirement myths get in the way.

Not many people want to work their whole life. Retirement is definitely possible, even if you’re only just starting out. 

There are some important myths not to believe:

Myth 1: “I can’t do it”

This is the biggest one. Whilst not everyone will be able to create a good retirement fund, I think superannuation will be able to help most people get to a good retirement number. You need to ensure you are engaged with your superannuation account, know what assets you’re investing in and know that it’s not costing you tons in fees. 

According to the Australian Bureau of Statistics (ABS), at November 2019 the average weekly total earnings per week was $1,256.20 which equates to about $65,300 per year.

Assuming you earn enough per month, Australians are entitled to be paid superannuation to the value of 9.5% of their wage. The average wage amount suggests annual payments of $6,000 into your superannuation account.

According to Moneysmart’s compound interest calculator, if $6,000 a year is invested into shares in your super and your shares return an average of 10% per annum then you’d have $1 million in just over three decades from now.

It shows you could become a millionaire just with your mandatory superannuation contributions over 30 years. What if you earned more than the average Australian wage? Could you voluntarily add more into your superannuation account? What happens if you invest additional money outside of super?

For most people, I think they can reach a good retirement number.

Myth 2: The 4% rule

A safe withdrawal rate (SWR) is the number that tries to work out how much you can withdraw from your retirement fund each year to live well whilst not eating into your nest egg savings. A 4% SWR is a commonly used rate. In the past that may have worked, but in this new world I think withdrawing 4% each year could be too much.

It can be dangerous to think that your portfolio will be able to fund your lifestyle at the same level through all stages of an economic cycle. Imagine if you retired one year before the GFC. You could end up eating into your portfolio balance to live and then it doesn’t recover as much as it’s meant to because you’ve eaten into the (beaten-down) capital value.

I do believe that retirees still need to invest at least some of their funds in growth assets. Retirement could last three or four decades – and you need to expect there will be some hefty medical bills along the way. I’m not sure how appropriate bonds are now that interest rates are at rock-bottom levels. I think shares are the answer. 

A 4% withdrawal rate could be too much to be called “safe”. I think it would be better to lower that expectation to a 3% rate. Or, to only live off the dividends paid out by reliable and growing ASX shares like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

Myth 3: Many ASX blue chips are safe

I’ve never been much of a fan of many ASX blue chips because I always thought that they offered little growth and their business models weren’t that defensive.

Investing in names like Westpac Banking Corp (ASX: WBC) and Telstra Corporation Ltd (ASX: TLS) may have seemed like a safe option because they’re ‘blue chips’. But they both have seen heavy share price falls over the last few years and there have been huge dividend cuts. That’s not been safe at all. 

Just because something pays a dividend doesn’t mean it’s a good ASX dividend share in my opinion. I think names like Soul Patts, APA Group (ASX: APA) and Brickworks Limited (ASX: BKW) are safer options for long-term income.

A business is only a safe dividend share if it can fund that dividend with reliable (and growing) earnings. Businesses like CSL Limited (ASX: CSL) and Wesfarmers Ltd (ASX: WES) have demonstrated profit growth during COVID-19. I also like dividend ideas like Rural Funds Group (ASX: RFF) and WAM Microcap Limited (ASX: WMI).

More reading

• 2 top ASX dividend shares I would buy for income this week
• Beat an RBA rate cut with these ASX dividend shares
• Here’s how I would spend $10,000 on ASX shares right now
• The ASX shares set to gain from government’s gas-led recovery
• Top brokers name 3 ASX shares to buy today

Tristan Harrison owns shares of RURALFUNDS STAPLED, WAM MICRO FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, Telstra Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA Group and Wesfarmers 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.

The post 3 retirement myths you can’t afford to believe appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2RIWYBL

At the time of writing, the Bell Financial Group Ltd (ASX: BFG) share price was up 7.02% to $1.22. The rise in the Bell Financial share price came after the company released a presentation which was given at the Bell Potter Emerging Leaders Conference this morning.

What was in the announcement?

According to Bell Financial Group, it successfully conducted more than 70 equity capital markets transactions this year prior to 31 August 2020, raising over $1.4 billion in new equity capital and earning $48.1 million in fees, an increase of 20% compared to the prior corresponding period (pcp). 

The company stated that it had 325 financial advisers servicing 500,000 retail, wholesale and institutional client accounts. Bell Financial Group earned $71.6 million in gross brokerage revenue in 2020 prior to 31 August 2020, an increase of 14% compared to the pcp. 

According to the company, it had consistent long-term growth in its superannuation accounts with $3.6 billion in funds under advice and $12.7 million in revenue during 2020 prior to 31 August 2020, an increase of 3% on the pcp. 

Bell Financial Group stated that revenue from its third party platform was $15.9 million in 2020 prior to 31 August 2020, a 31% increase on the pcp. The company announced that its third party trading platform had delivered $4.1 million in profit before tax in 2020 prior to 31 August 2020. Bell Financial Group had $22.2 billion in sponsored holdings, up 9% on the pcp. It had 197,000 client accounts and $220 million in client cash.

According to the company, its Bell Potter Capital division had consistent revenue and earnings growth. The company stated that it was the only non bank margin lender in the Australian marketplace. It had a loan book in 2020 to 31 August 2020 of $410 million, down 26% on 2019. Its cash book was $442 million in the year to August 2020, up 31% on the pcp. Bell Potter Capital had net revenue of $9.9 million in 2020 prior to 31 August 2020, an increase of 32% compared to the prior year. Profit before tax in 2020 to 31 August 2020 for Bell Potter Capital was $3.2 million, up 128.% compared to the pcp. 

Bell Financial Group had funds under advice of $54.4 billion in the first half of 2020, down 7% compared to December 2019.

The company had revenue of $177 million in 2020 prior to 31 August 2020, this was compared to $158 million at the same time in 2019. Bell Financial Group had net profit after tax of $23.3 million in 2020 prior to 31 August 2020 and earnings per share of 7.3 cents. Earnings per share saw an increase of 23.7% compared to the pcp.

The company had no core debt and $65.5 million in net cash at 31 August 2020.

About the Bell Financial share price

Bell Financial provides stockbroking, investment and financial advisory services in Australia to retail, institutional and corporate clients. It has been listed on the ASX since 2007.

The Bell Financial share price is up more than 154% from its 52-week low of 48 cents, however, it is down 2.4% since the beginning of the year. The Bell Financial share price is up 28.42% since this time last year.

More reading

• 3 ASX shares I wouldn’t touch with a 10-foot pole
• 2 top ASX dividend shares I would buy for income this week
• The Kogan (ASX:KGN) share price is up 180% in 2020: Is it still a buy?
• 3 retirement myths you can’t afford to believe
• Meet the ASX sector that is cum-consensus upgrade for FY21

Motley Fool contributor Chris Chitty 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.

The post Bell Financial (ASX:BFG) share price up 7% following presentation appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2RtIkOj

Talk about going against the grain. While analysts have pared earnings expectations for this financial year, one ASX sector could be about to enjoy consensus upgrades!

The economic rebound from the COVID-19 fallout will take longer to eventuate than experts were predicting in the early days of the pandemic.

Most ASX stocks won’t see earnings return to FY19 levels until FY22 at least. It’s only our miners like BHP Group Ltd (ASX: BHP) that is driving much of the earnings growth on the S&P/ASX 200 Index (Index:^AXJO) for this financial year.

Margin to fuel upgrade

Earnings upgrades will be hard to come by in this environment. Just ask Macquarie Group Ltd (ASX: MQG), which revealed a shock profit warning.

But ASX-listed petrol station operators look well placed to surprise on the upside, according to Morgan Stanley.

“Retail margins in 2H20 continue to outperform our forecasts, and with volumes likely recovering in late 2020 as Victoria comes out of lockdown,” said the broker.

“Retail fuel margins for July (18c/L), August (17c/L) and September (21c/L) remain well above 2019 average margins of 14c/L.”

Viva to benefit more than Ampol

The expanding margin benefits Viva more than Ampol. Every one cent a litre change in retail margins equates to around a 12%, or $24 million, movement in net profit for Viva. In contrast, Ampol’s net profit will move by 7%, or $34 million.

The competition watchdog has been silent on the “profiteering” by fuel retailers so far, probably because these companies need bigger margins to offset the drop in volume to stay afloat.

VEA share price and ALD share price at turning point?

It’s also worth noting that the Viva Energy Group Ltd (ASX: VEA) share price and Ampol Ltd (ASX: ALD) share price are lagging the market. Viva shed around 16% while Ampol tumbled 31% over the past year when the ASX 200 lost 12%.

But if Morgan Stanley is right, these stocks could see their fortunes turn and it isn’t only the fatter than expected margin that will drive the re-rating.

Volume recovery in 2021

“Apple mobility data suggest that Australian driving volumes in September (down 10%) have improved since August (down 15%) from January base levels, weighed by Victoria (down ~50%),” explained Morgan Stanley.

“However, we think retail performance will accelerate in the next 12 months as volumes recover after Victoria eases lockdown restrictions.”

Foolish takeaway

The reluctance for commuters to return to public transport due to worries about catching COVID-19 is also another positive trend for volumes.

It will be interesting to see if the ACCC starts to wave a big stick if margins don’t narrow as volumes recover.

Morgan Stanley reiterated its “overweight” (or “buy”) recommendation on Viva and Ampol.

More reading

• SEEK (ASX:SEK) shares surge 9% today. Here’s why.
• Bear vs Strong Bear: Choosing the right hedge for your portfolio
• Firefly (ASX:FFR) share price tanks despite further positive drill results
• Here’s how I would spend $10,000 on ASX shares right now
• Brokers upgraded JB Hi-Fi (ASX:JBH) share price and this other ASX stock to “buy” today

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited and Macquarie Group Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Macquarie Group 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.

The post Meet the ASX sector that is cum-consensus upgrade for FY21 appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3kqFAO7

I think exchange traded funds (ETFs) can be great additions to a balanced portfolio.

This is because they allow you to invest across a large and diverse number of shares through just a single investment.

But which ETFs should you buy today? Three of the best ETFs in my opinion are listed below. Here’s why I would buy them:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

My favourite ETF is the BetaShares NASDAQ 100 ETF. This ETF gives investors access to 100 of the biggest non-financial companies on the legendary Nasdaq index. These means investors will be getting a slice of a large number of tech giants such as Apple, Microsoft, and Netflix. Due to the positive outlooks of the majority of the companies in the ETF, I believe it can generate strong returns for investors over the next decade. Another positive is a recent pullback following a tech selloff on Wall Street. This gives investors an opportunity to buy in at a more attractive price.

BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)

Another option for investors to consider buying is the BetaShares S&P/ASX Australian Technology ETF. It is the Australian equivalent of the BetaShares NASDAQ 100 ETF and a great option if you don’t already have exposure to the tech sector. Included in the fund are the likes of Afterpay Ltd (ASX: APT), Appen Ltd (ASX: APX), and Xero Limited (ASX: XRO). I believe this ETF has the potential to outperform the broader ASX 200 index by a decent margin over the long term.

iShares Global Healthcare ETF (ASX: IXJ)

A final option to consider is the iShares Global Healthcare ETF. This exchange traded fund gives investors a piece of some of the largest healthcare companies across the world. This includes giants such as CSL Ltd (ASX: CSL), Johnson & Johnson, Novartis, and Pfizer. Given the expected increase in demand for healthcare services over the next few decades, I believe it is a great place to invest with a long term view.

More reading

• BrainChip (ASX:BRN) and Zip (ASX:Z1P) were among the most traded shares on the ASX last week
• Investing $1,000 into these ASX shares could be a very smart move
• 3 five-star ASX stocks to buy right now
• 3 ways Aussies can buy Tesla (NASDAQ:TSLA) shares
• 3 exotic ASX tech ETFs you might want to add to your portfolio today

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 BETANASDAQ ETF UNITS, CSL Ltd., and Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen Ltd. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. 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.

The post Buy BetaShares NASDAQ 100 ETF (ASX:NDQ) and these outstanding ETFs today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3hwDGKh

The outlook for global mobility and travel is looking increasingly grim as many countries enter a second or third wave of COVID-19. Has the market already priced in the worst case scenario and now be a time to start picking up ASX travel shares? Or should investors wait for a proper restart of flying or a vaccine before considering ASX travel shares? 

Could the worst be over? 

There are almost 30 million COVID-19 cases recorded around the world. Countries such as the US, India, Brazil and Russia account for more than 50% of the worlds cases. While COVID-19 will continue to be a trending topic, it appears that the markets have largely shrugged off its near-term impacts. The combination of record monetary stimulus and ultra-low interest rates have been able to buoy the global equity market, and it could be an opportunity to buy ASX travel shares at record low prices. 

ASX travel shares are hoarding cash

Household ASX travel shares such as Qantas Airways Limited (ASX: QAN), Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) have all focused on preserving liquidity, reducing costs while maintaining the flexibility to respond to changes in travel restrictions.

Taking a closer look at Qantas, the company experienced a significant drop in operating cash flow due to travel restrictions and border closures. To support the business, the company undertook a $1.36bn institutional placement and raised $1.75bn in new debt. By the end of FY20, the company held a significant $3.52bn in cash and $1.0bn in undrawn credit facilities.

Similarly, Flight Centre saw a 99.4% decrease in Australian outbound travel during Q4 with limited revenue generating opportunities. Like Qantas, the company has more than $1b in cash and liquidity for its survival. 

Interestingly, Webjet announced a change in substantial shareholding on Wednesday. Goldman Sachs now holds 5.01 per cent of Webjet as of 11 September. This does show some degree of institutional interest on the challenged sector. 

What post COVID-19 could look like

China has been one of the few countries to truly conquer COVID-19. Data from the Civil Aviation Administration of China showed that air passenger traffic rose to 45.35 million passenger trips in August. This represents more than 80% of that in the same period last year, and the highest level this year. China’s figures could be a beacon of hope as to what post COVID-19 could look like for ASX travel shares. The combination of pent up demand and potential travel bubbles could see a broad recovery for travel related businesses. 

Foolish takeaway

COVID-19 is still a significant challenge for Australia. Notwithstanding current travel restrictions and challenges, ASX travel shares are sitting on strong balance sheets with a focus on cutting costs. China has shown what a post COVID-19 world could look like, but it is difficult to tell when that world could come for Australians. I believe ASX travel shares have bottomed, but perhaps more time is needed to see business conditions improve. 

More reading

• Qantas (ASX:QAN) considers leaving Sydney
• Here are the 10 most shorted ASX shares
• 2 ASX shares that could rocket from viral cash hoarding
• This devastated sector is ripe for buying: fundie
• Is the Flight Centre (ASX:FLT) share price about to take off?

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group 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.

The post Is now the time to be buying ASX travel shares?  appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2FC2MKm

A shareholder group has complained that Fortescue Metals Group Limited (ASX: FMG) has rejected its resolution to ban desecration of cultural sites.

The Australasian Centre for Corporate Responsibility (ACCR) resolution came after the controversy arising from Rio Tinto Limited (ASX: RIO) blowing up Juukan Gorge in May.

Rio Tinto, after shareholder pressure, let go of three senior executives last week, including its chief Jean-Sébastien Jacques. 

Investor advocacy body ACCR has since widened the call for better protection of historically significant sites to other mining companies.

One of its actions was to submit a resolution for Fortescue’s coming annual general meeting. It called for a ban on damage to culturally significant locations.

But Fortescue this week declined to put it on the agenda for the 11 November meeting, citing the physical submission missed the deadline.

ACCR is furious at the rejection, saying the electronic document was received by the company well before the cut-off. The physical mail was delayed due to COVID-related delivery issues.

“Given that FMG briefed external lawyers when the documents arrived electronically, they suffered no prejudice by the short delay in receiving the physical documents,” said ACCR executive director Brynn O’Brien.

“That FMG is using the pandemic to their advantage is reprehensible. That they are doing this to avoid shareholder scrutiny of their relationships with Aboriginal traditional owners begs the question: What are they hiding?”

Rejection on a ‘minor technicality’

The physical documents were sent express to arrive at Fortescue well on time, but courier TNT notified on the deadline afternoon that the parcel was delayed.

ACCR says it immediately notified Fortescue of the delay and the package arrived the next morning.

“That FMG has knocked this resolution back on a minor technicality — especially after the international investor outrage heaped on Rio — calls into doubt its interest in dealing with the important issues raised by its shareholders and indeed Aboriginal traditional owners,” O’Brien said.

“FMG’s major competitor and peer, BHP, saw it fit to accept electronic documentation during the pandemic.”

Fortescue stated that the moratorium was proposed by people “unfamiliar with the West Australian mining industry”.

“It would disempower local Aboriginal people in the Pilbara and limit the positive contribution the mining industry is making to the state and national economies, at a time when it is needed most.”

The company added that it has already collaborated with Indigenous communities to “avoid and protect” almost 6,000 heritage locations.

“Fortescue does not have heritage ‘gag order’ clauses in its agreements and Aboriginal groups are free and open to disagree and publicly voice their concerns,” the statement read.

“Fortescue supports the modernisation of the WA Aboriginal Heritage Act, and has called for an increased voice for Aboriginal people in the process and equitable right of appeal to all parties in the heritage process.”

The iron ore company stated if ACCR’s resolution was deemed eligible, it would be put up at the next company meeting.

The Fortescue share price was down 0.73% at 2:35pm AEST, to trade at $17.57. It has risen 63% since the start of the year.

More reading

• Why the RBA’s latest minutes spell good news for these 3 ASX shares
• 3 ASX shares with high-flying dividend yields
• Leading brokers name 3 ASX shares to buy today
• The latest ASX 200 stocks that top brokers just upgraded to “buy”
• Why Althea, BrainChip, Rio Tinto, & Starpharma shares are pushing higher

Motley Fool contributor Tony Yoo 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.

The post Fortescue (ASX:FMG) rejects ban on blowing up cultural sites appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3kez8dc

The Sezzle Inc (ASX: SZL) share price has been among the best performers on the Australian share market on Wednesday.

In afternoon trade the buy now pay later provider’s shares are up 8% to $7.21.

Why is the Sezzle share price zooming higher?

Investors have been buying Sezzle and other tech shares today after the Nasdaq continued its rebound overnight.

This appears to have sparked hopes that the tech rout is finally over and that tech shares will now commence their recovery.

And given how hard the Sezzle share price has fallen in recent weeks, I can’t say I’m surprised to see it rebound stronger than others. Since peaking at $11.83 just under three weeks ago, the Sezzle share price has lost around 40% of its value.

However, a rebound back to its record high may be out of the question in the near term. This is because the recent weakness hasn’t just been driven by the Nasdaq tech selloff.

Also weighing on Sezzle’s shares was news that PayPal will be launching a buy now pay later offering in the $5 trillion United States market in the final quarter of the year.

There are concerns that its entry could weigh on the growth of smaller players like Sezzle and the Zip Co Ltd (ASX: Z1P) owned QuadPay business.

Should you buy Sezzle shares?

Given the size of the U.S. market, Sezzle wouldn’t have to dominate it to generate significant revenues. It also has plans to expand into new geographic markets in the future to support its growth.

In light of this, I think the Sezzle share price could still go higher from here. However, it will need to prove that it can continue its growth alongside a PayPal offering in 2021 before I’ll consider it as an investment.

For now, I would class it as a hold and sooner buy larger rival Afterpay Ltd (ASX: APT). Especially given the latter’s very strong market position and global expansion plans.

More reading

• BNPL shares like Afterpay (ASX:APT) and Zip (ASX:Z1P) are soaring today. Here’s why
• The Sezzle (ASX:SZL) share price has now fallen 45% in 2 weeks as air continues to go out of the BNPL sector
• Are higher P/E ratios really here to stay?
• 3 exotic ASX tech ETFs you might want to add to your portfolio today
• Why the Afterpay (ASX:APT) and Sezzle (ASX:SZL) share prices are falling again today

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 ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. 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.

The post Why the Sezzle share price is zooming 8% higher today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/32ATI1n

There are many investors out there who love the rough and tumble of investing in the share market. Buying, selling, finding your next big investment… these are all things that we investors find absolutely thrilling. But not all investors love the cut and thrust of the markets. Some people choose to invest passively. They want to share in the spoils of investing, but are unable or unwilling to ‘do the work’ of researching stock picks or analysing companies.

Instead, these ‘passive investors’ choose to invest solely in index exchange-traded funds (ETFs), such as the Vanguard Australian Shares Index ETF (ASX: VAS). This is typically done via a dollar-cost averaging (DCA) strategy, where the investor puts their investing on ‘autopilot’ by blindly investing a set amount of capital on a periodic basis (e.g. $100 a week or $1,000 a month).

Some investors choose to invest this way because it takes the ’emotional aspect’ out of the game. Many people (understandably) simply can’t handle the pressure of deciding what price to buy at. Thus, it’s easier to automate the whole process with a consistent approach. But for many investors who try their hand at ‘active investing’, perhaps a passive approach would be better suited.

When is passive investing the best strategy?

We’ve already established that a passive ETF-only strategy is best for those investors who don’t find investing interesting or fun, but still want to benefit from the compounding that the share market brings to the table.

But it might also suit those potential investors whose temperaments aren’t suited to a long-term focused, active approach. The last thing you want to do is put yourself off investing entirely by losing money chasing unrealistic gains. It might look glamorous when one of your friends decided to bet the house on Zip Co Ltd (ASX: Z1P) shares and rakes in a massive gain when Zip goes from $6 to $10 (as is what happened last month). But this isn’t too different from going to the casino and putting it all on red in my eyes. And it is not glamorous in the slightest when the odds cut the other way.

If you’re a thrill-seeker and bring that attitude to the share market, a passive strategy might be a better way to go. The share market isn’t a place for high-octane entertainment, in my opinion. Instead, as legendary investor Warren Buffett once said, it’s instead a place where wealth is transferred from the impatient to the patient. If you’re not ‘the patient investor’ that Buffett speaks of, chances are you’ll end up funding someone else’s retirement.

Foolish takeaway

But if you genuinely want to start a journey as an active share picker who looks for the best businesses to invest in, you can always start with ETFs and work your way up to finding individual companies as your experience grows. Understanding yourself is the first step to becoming a great investor. There’s no shame in going for a passive approach if it suits you best. You’ll still be far better off in the long run that those who don’t invest at all.

More reading

• 3 simple ways to save more cash to buy ASX shares today!
• Here’s how to make a $1 million portfolio by investing $1,000 a month
• Why investing more in super can turbo charge your retirement plans
• Here’s how much money you can actually make from investing in ASX shares
• 2 ASX ETFs I would buy for growth and income

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. 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.

The post Is a passive ASX investing strategy for you? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2FpgHUt

The SEEK Limited (ASX: SEK) share price has been on the move today. At the time of writing, the SEEK share price is up 8.1% to $20.78, and reached an intra-day high of $21.74. This compares with the S&P/ASX 200 Index (ASX: XJO) which has risen 0.9% to 5,946 points.

While the company has released no new news to the market, let’s take a look at what could be driving these gains.

Zhaopin investment

Overnight, international markets revealed that major e-commerce provider Alibaba Group Holding Ltd (NYSE: BABA) could invest in SEEK’s Chinese business, Zhaopin. The reported investment is said to be worth hundreds of millions of dollars in the online job ads company.

Should the speculation materialise, SEEK’s partnership with Alibaba would be a major push for greater presence in the Chinese market. Alibaba’s large customer base and reach closely associated with Zhaopin, would strengthen the online job ads brand positioning and revenue streams.

In its FY20 results, Zhaopin reported an average of 4.9 million unique visitors per day. This was a 29% on the previous corresponding year. Net income for the financial year ending 30 June came to $42.2 million. This was underpinned by performance to revenue from business process outsourcing as well as cost efficiencies taken during COVID-19.

China’s urban unemployment levels have been steadily decreasing from a record high of 6.2% reached in February. Since the re-opening of the economy, latest figures reveal that the urban unemployment rate dropped to 5.7% in June and July.

The country is expecting a record 8.74 million graduates to enter the job market this summer which in turn will benefit Zhaopin. In addition, the Chinese government also pledged to support job growth with a raft of initiatives to be announced.

Recent Zhaopin news

Late last month, news broke out that several shareholders were weighing up their options in regards to their holdings. Zhaopin’s investors FountainVest Partners Co. and Hillhouse Capital Management were reportedly looking to reduce their stake through a $500 million private placement.

As the firm’s gauge potential investor interest, it was noted that the owners intend to retain a collective 51% stake in the Chinese online recruitment business. The additional holding is anticipated to be sold off in stages.

The SEEK share price sharp recovery

The SEEK share price has strongly recovered from the onset of COVID-19 which halted the global economy. The SEEK share price hit a 52-week low of $11.23 and has gained 87% in the last 6 months.

At a market capitalisation of $7.37 billion, I think that SEEK share price is good value as it closes in on its 52-week high of $24.09. The world’s economic climate is starting to show sunnier days ahead and I believe SEEK will become a much leaner business post COVID-19.

More reading

• Bear vs Strong Bear: Choosing the right hedge for your portfolio
• Firefly (ASX:FFR) share price tanks despite further positive drill results
• Here’s how I would spend $10,000 on ASX shares right now
• Brokers upgraded JB Hi-Fi (ASX:JBH) share price and this other ASX stock to “buy” today
• The Tabcorp (ASX:TAH) share price is flat following ASX announcement

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SEEK 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.

The post SEEK (ASX:SEK) shares surge 9% today. Here’s why. appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3km06zt

According to the latest cash rate futures, the market is becoming increasingly confident that another rate cut is coming.

The latest futures contracts are pointing to a 64% probability of a cut to zero in October and a 36% probability of rates remaining on hold at 0.25%.

Whatever does happen next month, I feel it is safe to say that rates will be staying at very low levels for some time to come.

In light of this, I think ASX dividend shares will remain the best option for income investors for the foreseeable future.

But which ASX dividend shares should you buy? Here are two which I think could be great options for investors right now:

Coles Group Ltd (ASX: COL)

The first ASX dividend share I would buy is this supermarket giant. I like Coles due to its yield, defensive qualities, and positive long term growth outlook. The latter is underpinned by its strong market position, expansion opportunities, and focus on automation. Based on this and the current Coles share price, I estimate that its shares currently offer investors a fully franked ~3.2% FY 2021 dividend yield. I think this is very attractive in the current environment.

Wesfarmers Ltd (ASX: WES)

Another option to consider buying is Coles’ former parent, Wesfarmers. I think the conglomerate would be a great option right now due to its strong performance during the coronavirus pandemic and its positive long term outlook. The latter is thanks to its portfolio of solid businesses and particularly the Bunnings business. Bunnings has been performing exceptionally well during the crisis. This is a big positive given its importance to Wesfarmers’ overall earnings. In addition to this, I suspect that management may look to accelerate its growth with acquisitions in the near term. Based on the current Wesfarmers share price, I estimate that it offers a fully franked 3.5% FY 2021 dividend yield.

More reading

• Top brokers name 3 ASX shares to buy today
• 5 ASX shares to avoid in October
• 3 ASX dividend shares to buy in a downturn
• How to position your ASX share portfolio for a downturn
• 3 simple ways to save more cash to buy ASX shares today!

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers 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.

The post Beat an RBA rate cut with these ASX dividend shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3hwz0UJ