The InvoCare Limited (ASX: IVC) share price will be on watch on Thursday following the release of an announcement after the market close.

What did InvoCare announce?

This afternoon the funerals company announced that it has entered into conditional sales agreements to acquire 100% of the shares of Family Pet Care and the business and assets of Pets in Peace.

InvoCare has agreed a combined price of $49.8 million, of which $11.5 million represents deferred consideration subject to the attainment of 2-year earnings targets.

Management notes that the two acquisitions will provide InvoCare a national footprint and position it as the market leader in pet cremation and pet after life services in Australia.

They also represent a strategic expansion of the company’s existing pet cremation business in NSW (Patch and Purr), putting it in a position to capture a larger slice of an industry estimated to be growing at ~9% per annum.

The acquisitions are forecast to deliver combined annual revenue of ~$19.3 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $5.2 million. Management also expects the acquisitions to be earnings per share accretive in the first full year of operations.

“High-quality businesses.”

InvoCare’s Chief Executive Officer, Martin Earp, appeared to be very pleased to be able to acquire these high-quality businesses.

He said: “The acquisitions are a significant expansion into the adjacent market of pet cremations building on our 2018 entry into this market in NSW and transforming the Pet Cremation division of InvoCare into a meaningful contributor to overall earnings. We are excited to complete these transactions as they are both very high-quality businesses providing exceptional levels of customer service.”

Mr Earp sees the expansion of this side of the business as a natural evolution for the funerals company.

The chief executive commented: “Expanding the pet cremation business is a natural evolution for InvoCare providing opportunities to leverage its decades of operating in the end of life market. In addition, it is our belief that our deep experience in memorialisation in our core business will transfer across to the pet sector given the increasing trend towards the humanisation of the pet industry.”

“I am also delighted to announce that the current owners and leadership teams of both businesses will remain in place to ensure that we continue to provide the highest level of customer service and facilitate a smooth integration with InvoCare’s existing pet cremation operation, Patch & Purr. This will include building on the market leading service proposition provided through Patch & Purr’s technology and bespoke cremations,” he concluded.

More reading

• These are the 10 most shorted shares on the ASX
• These are the 10 most shorted shares on the ASX
• These are the 10 most shorted shares on the ASX
• These are the 10 most shorted shares on the ASX
• Propel Funeral (ASX:PFP) share price springs to life after quarterly update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended InvoCare 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 InvoCare (ASX:IVC) share price on watch after acquisition announcement appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3ljuHi4

The S&P/ASX 200 Index (ASX: XJO) surged higher on Wednesday, it went up 1.7% today to 6,450 points.

Here are some of the highlights from the ASX today:

Commonwealth Bank of Australia (ASX: CBA)

CBA announced its first quarter trading update today.

The big four ASX bank revealed that it generated $1.9 billion of statutory net profit after tax (NPAT) in the quarter for the three months to 30 September 2020.

It also said that it made $1.8 billion of cash NPAT, which was down 16% on the same period last year.

CBA reported that its income was stable compared to the quarterly average for the second half of FY20. Its core volume growth helped to offset lower net interest margins. Meanwhile, expenses rose by 2% excluding customer remediation (or down 4% including customer remediation provisions in the second half of FY20).

The ASX 200 bank said that its credit quality indicators insulated by repayment deferrals and government support initiatives. The provision coverage was strengthened through forward looking adjustments for economic assumptions and expected COVID-19 impacts.

The strong balance sheet settings were maintained, with deposit funding at 74%. The CET1 capital ratio of 11.8%, which was an increase of 20 basis points after the payment of the FY20 final dividend.

CBA CEO Matt Comyn said: “Disciplined execution of our strategy and strong operational performance continued to deliver good outcomes for our stakeholders during the September quarter. Our strong balance sheet, focus on operational excellence and the dedication and commitment of our people ensures we remain well placed to support our customers and the wider community through ongoing challenges of COVID-19.

Looking at CBA’s home loan deferrals, there was a reduction in the deferred balance of around $18 billion. There are approximately 45,600 home loans still in deferral at the end of October, worth around $19 billion – of these 27% are due to expire and exit in November, though they may be extended. 

The CBA share price rose 2.75% in reaction to this news.

Oil businesses

The oil industry has gone up again after a strong reaction yesterday to the hopeful vaccine news.

Today, the Woodside Petroleum Limited (ASX: WPL) share price went up 6.3%, the Santos Ltd (ASX: STO) share price grew by 6.4%, the Oil Search Limited (ASX: OSH) share price grew by 7.5% and the Beach Energy Ltd (ASX: BPT) share price rose 7%.

Mesoblast Limited (ASX: MSB)

The Mesoblast share price went up by around 4.8% today after it announced today that the randomised controlled phase 3 trial of remestemcel-L, in patients with moderate to severe acute respiratory distress syndrome (ARDS) due to a COVID-19 infection, has received a recommendation to continue from the independent data safety monitoring board following completion of the trial’s second interim analysis.

Mesoblast chief medical officer Dr Fred Grossman said: “We are pleased with the recommendation by the DSMB, as we seek to confirm whether remestemcel-L improves survival in ventilated COVID-19 patients with moderate to severe ARDS. Patients who have co-morbidities or are older are likely to continue to be at high risk of ARDS and death, even if COVID-19 vaccines become available. This is why having a potential treatment that reduces mortality in these patients is so important.”

Other big share price movements

There were some big movements in the ASX not related to oil. The Virgin Money UK CDI (ASX: VUK) share price went up 14.3% and the Xero Limited (ASX: XRO) share price went up 6.7%.

Straker Translations Ltd (ASX: STG) saw its share price soar 76% after announcing an important deal with IBM. Straker has been picked as a strategic translation service provider on for a two-year agreement.

More reading

• Why the Virgin Money (ASX:VUK) share price surged 15% today
• Latest ASX stocks to be hit by a broker downgrade
• Why the Xero (ASX:XRO) share price jumped 13% to a record high today
• The irresistible urge that costs retail investors 3% a year
• Commonwealth Bank (ASX:CBA) share price higher on Q1 and loan deferral update

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia has recommended Straker Translations. 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 ASX 200 surges again on Wednesday appeared first on Motley Fool Australia.

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

The Suncorp Group Ltd (ASX: SUN) share price was on form on Wednesday and charged notably higher.

The insurance and banking giant’s shares rose almost 4% to $9.50.

Can the Suncorp share price go higher from here?

According to one leading broker, there could be plenty more upside for the Suncorp share price over the next 12 months.

A note out of Goldman Sachs reveals that its analysts have retained their buy rating and $10.86 price target on the company’s shares following its quarterly update.

This price target implies potential upside of 14% excluding dividends, even after factoring in today’s solid gain.

What did the broker say?

Goldman has been looking through Suncorp’s first quarter banking update and notes that its home lending lodgement and settlement rates have increased as a result of improved processes for the broker channel.

However, this was more than offset by higher levels of customer repayments and refinancing as a result of increased competition across the industry. As a result, its mortgage growth was down 1% quarter on quarter and tracking slightly below Goldman’s half year forecast of -0.5%.

Positively, though, the broker points out that its net interest margin (NIM) has held up much better than regional peers that are experiencing stronger volume growth. It also appears confident this will remain the case throughout the first half.

Another positive was its business volumes. They were up 1.7% on the prior corresponding period thanks largely to Agribusiness growth of 3.7%.

But perhaps the biggest positive of all was its asset quality, which the broker was pleasantly surprised by.

It commented: “Asset quality trends are tracking much better than anticipated, with SUN’s c.A$3m bad debt charge for the quarter trending well below the A$56m we have forecast for 1H21E. With deferral metrics remaining encouraging alongside a broader re-opening of key state economies, asset quality is on track to be a source of upside risk to consensus for FY21E.”

In light of this, it appears comfortable with its buy rating and $10.86 price target at this stage.

More reading

• Why the AMP (ASX:AMP) share price could be set to rocket higher today
• These could be the next ASX stocks to unlock value by selling assets
• The Suncorp (ASX:SUN) share price is slightly lower on day of AGM
• Invest your Suncorp dividends in these ASX shares today

Motley Fool contributor James Mickleboro 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 Can the Suncorp (ASX:SUN) share price go higher from here? appeared first on Motley Fool Australia.

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

The Axiom Properties Ltd (ASX: AXI) share price has spiked today, climbing as high as 14 cents a share in early morning trading.

Axiom shares closed at 6 cents a share yesterday, but opened at 7.4 cents this morning before surging up to 14 cents soon after open (a new 52-week high for the company). Axiom is trading at 6.7 cents a share at the time of writing, a 13.56% rise. This move will no doubt be welcomed by shareholders who have, until today, had to watch the Axiom share price fluctuate between 3 and 6 cents a share over the past 5 years. The stock is now up 70% since 21 August on today’s prices.

So what is Axiom? And why did this company have such a dramatic spike in value today (which incidentally saw its market capitalisation double and then halve, all in one day)?

What is Axiom Properties?

Axiom Properties is a property development and investment business. The company describes itself as “developing and delivering quality property solutions”. Axiom was incorporated in Perth back in 1972. According to the company, it has completed more than $1 billion worth of developments across the country since then. These include everything from office buildings, shopping centres and medical centres to hotels, theme parks, warehouses and marinas.

It currently has 6 projects on the go, including a $180 million hotel and office tower in Adelaide, a $200 million apartment and entertainment complex in Sydney’s Double Bay and a multi-million dollar refurbishment of The Richmond Club in Richmond, NSW.

In the past, the company has worked on Adelaide’s Churchill Centre, the former headquarters for The Age on Spencer St, Melbourne, and the 100 St George Terrace building in Perth. The company had a self-confessed “number of difficult years” focusing on residential land development leading up to 2006. Because of this, Axiom has focused on diversifying its portfolio across different property sectors and across different states ever since.

Why have these shares gone crazy today?

We can likely put today’s dramatic share price move in Axiom down to an ASX release the company put out to the markets this morning. In this release, Axiom told investors that it has reached an agreement with ASX REIT (real estate investment trust) Charter Hall Social Infrastructure REIT (ASX: CQE). Charter Hall is a $1.3 billion company with 395 properties to its name, most of which are childcare centres.

This agreement involves Charter Hall purchasing a “new, purpose-built Emergency Services State Command Centre, and adjacent multi‐deck car park currently under construction” from Axiom. The 1.6-hectare site is approximately 2km from the Adelaide CBD. Axiom has owned the site since 2009. 

The centre is secured against a multitude of potential calamities. Earthquake resilience, backup power and water facilities, and wastewater storage capacity are all built in. The South Australian government has reportedly already committed to leasing 85% of the new centre on a 15-year lease. This incidentally contains “fixed annual increases” in rent.

The deal with Charter Hall involves “upfront purchase of the land” as well as “completed works to date” for an initial sum of $23 million. It has also committed to “fund the balance of the works on a progressive basis for a total consideration of $80 million”. Meanwhile, Axiom will continue to deliver the facility until its expected completion in October 2021.

Axiom’s market capitalisation on current prices is approximately $30 million. As such, a deal of this magnitude is obviously a major boon for the company. 

More reading

• 3 ASX dividend shares rated as buys by brokers
• 3 ASX dividend shares rated as buys by brokers

Motley Fool contributor Sebastian Bowen 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 ASX stock of the day: Axiom (ASX:AXI) shares spike on sale news appeared first on Motley Fool Australia.

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

The Virgin Money UK (ASX: VUK) share price was one the highest movers on the ASX today, rising by almost 15% to $2.40. Meanwhile the ASX has also gained across most sectors, still fuelled by the news that a vaccine for COVID-19 is imminent. The Virgin Money share price was the highest gainer of all the mid cap stocks today, with all major bank shares also moving in the same direction. 

Why did Virgin Money UK rise today?

As mentioned, the big jump in the Virgin Money share price today was mainly driven by optimism around the availability of a vaccine. The share price was also buoyed by the news that consumer confidence in Australia is at a seven-year high. Meanwhile in London, where Virgin Money operates, the FTSE 100 Index (FTSE: UKX) has risen for two consecutive days, with a total gain of 6.46%. Yesterday’s FTSE closing level is the highest since 23 June. The market euphoria is continuing despite the United Kingdom showing a jump in its unemployment level from 4.5% to 4.8% in the September quarter, according to official data released yesterday. 

Why is the UK economy important for Virgin Money?

Virgin Money derives all of its income from the UK. The history of Virgin Money dates back to 2016, when National Australia Bank Ltd. (ASX: NAB) demerged its UK operations in Clydesdale Bank and Yorkshire Bank (known collectively as CYBG). The combined entity of CYBG and Virgin Money was renamed Virgin Money UK PLC in 2019.

Virgin Money is a mid-sized bank, and its market share is dwarfed by the UK’s big five banking entities. Around 80% of Virgin Money’s loan book is in mortgages, with 30% of this concentrated in London’s property market alone. Virgin Money UK will be renamed to Virgin Money in 2021.

How has the Virgin Money share price performed in 2020?

In its quarterly trading update to 30 June 2020, Virgin Money announced that it had not seen any significant provisions or credit losses due to the COVID-19 pandemic, mainly due to government support. The Virgin Money share price had lost around 40% on a year-to-date basis before today’s 15% jump. With today’s gains, the Virgin Money share price is now 32% lower year to date and has a market capitalisation of $2 billion. 

More reading

• ASX 200 up 1.3%: CBA Q1 update, tech shares rebound, JB Hi-Fi sinks
• These were the best performing shares on the ASX 200 in October
• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares

Motley Fool contributor Eddy Sunarto 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 Why the Virgin Money (ASX:VUK) share price surged 15% today appeared first on Motley Fool Australia.

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

The S&P/ASX 50 index is home to 50 of the largest listed companies on the Australian share market.

This means the index is home to many of the highest quality and most well-known companies that the ANZ region has to offer.

Two ASX 50 shares that are highly rated are listed below:

a2 Milk Company Ltd (ASX: A2M)

A2 Milk Company is a New Zealand-based infant formula and fresh milk company. It has been growing its earnings at a quick rate over the last few years thanks to strong demand for its infant formula. This has particularly been the case in China and through the daigou channel. And while the latter has been impacted by the pandemic due to a reduction in tourism and international student numbers, management is confident this is a short term headwind.

Analysts at UBS believe that investors should look through the short term volatility and focus on its long term growth potential. It expects this to be driven by market share gains in China as its roll out in mother and baby stores increases and free trade zones are expanded. UBS has a buy rating and NZ$20.50 (A$19.22) price target on its shares.

Aristocrat Leisure Limited (ASX: ALL)

Aristocrat Leisure is one of the world’s leading gaming technology companies. It is responsible for some of the most popular poker machines in play today and also has a growing number of digital and social games that are generating significant recurring revenues from their millions of daily active users.

Last month analysts at Ord Minnett put an accumulate rating and $38.60 price target on the company’s shares. It was pleased with the way the company’s businesses are recovering from the pandemic and the performance of its new releases. This compares to the current Aristocrat Leisure share price of $33.04.

More reading

• The A2 Milk (ASX:A2M) share price is up 4% today. Here’s why.
• How you could have turned $20,000 into $250,000 in 10 years with ASX shares
• 2 must-buy ASX growth shares to buy in November
• 4 outstanding ASX 200 shares to buy with $4,000
• I plan to invest heavily in ASX shares next week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. 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 2 ASX 50 shares to buy today appeared first on Motley Fool Australia.

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

The market is extending its rally following the US presidential elections, but brokers have downgraded some ASX stocks to the naughty list.

The S&P/ASX 200 Index (Index:^AXJO) jumped a further 1.6% as we head into the close with every sector trading in the black.

But one stock that’s heading in the opposite direction is the Ramsay Health Care Limited Fully Paid Ord. Shrs (ASX: RHC) share price.

Second wave prompts downgrade of ASX stocks

Shares in the hospital operator tanked 2.9% to $67.48 at the time of writing after Credit Suisse downgraded the stock to “neutral” from “outperform”.

You can blame COVID‐19 for the underperformance, even though the pandemic should be less of a concern with a potential vaccine just around the corner.

“While we continue to believe that RHC will be a beneficiary of a volume tailwind post COVID‐19, there remains significant near‐ term earnings pressure for RHC’s offshore divisions with rising COVID‐19 cases in Europe,” warned Credit Suisse.

Increased hospital admission rates for COVID cases will hamper Ramsay’s ability to undertake more profitable elective surgeries.

It looks as though Ramsay’s facilities in France and the UK will take a hit due to a significant second wave of the disease.

Credit Suisse’s price target on the Ramsay share price is $70 a share.

Longer than expected recovery from pandemic

Meanwhile, the CSL Limited (ASX: CSL) share price was also downgraded, although that didn’t stop it from rising 0.8% to $307.06 in late trade.

Citigroup cut its rating on the blood treatment company to “neutral” from “buy” as it believes that COVID-19 is impacting on its operations.

“In the last few weeks, we had quarterly results from key competitors and suppliers including Takeda, Grifols, and Haemonetics,” said Citi.

“All noted the plasma product demand remains unchanged, however collections have been impacted by COVID-19.”

The broker believes that plasma collection will only return to normal levels in Jan 2021 compared to its earlier prediction of October 2020.

Citi’s 12-mopnth price target on the CSL share price is $320 a share.

New tech casualty from COVID rotation

News of the possible COVID vaccine triggered a large sell-off in tech stocks. It also gave Bell Potter a reason to chop its recommendation on the Macquarie Telecom Group Ltd. (ASX: MAQ) share price to “hold” from “buy”.

“With its focus on Data Centres (DCs) and the cloud, MAQ too has seen a large share price rise over the past year,” said the broker.

“While we view MAQ’s rise as justified on account of its long-term DC and cloud growth outlook, with an anticipated rotation towards more cyclical names as a US and Australian re-opening gains greater focus and COVID fear subsidies, MAQ’s shares may see some near-term selling pressure.”

Bell Potter’s 12-month price target on the stock is $52.40 a share.

More reading

• The irresistible urge that costs retail investors 3% a year
• Macquarie Telecom (ASX:MAQ) share price surges on contract win
• ASX 200 up 1.3%: CBA Q1 update, tech shares rebound, JB Hi-Fi sinks
• 5 things to watch on the ASX 200 on Wednesday
• Enjoying your ASX 200 gains? Here’s why you should watch out for January

BrenLau owns shares of CSL don Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended Ramsay Health Care 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 Latest ASX stocks to be hit by a broker downgrade appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/35jijsZ

If you’re looking to overcome low interest rates by investing in the share market, then these highly rated growth shares might be the ones for you. 

Two top growth shares that have been given buy ratings by brokers are listed below. Here’s what you need to know about them:

Altium Limited (ASX: ALU)

Altium is a leading printed circuit board (PCB) design software provider. It has been growing at a very strong rate over the last few years thanks to its leading software and its exposure to the booming artificial intelligence and Internet of Things markets. The good news for investors is that management is confident its growth can continue and is targeting revenue of US$500 million and 100,000 subscribers by 2025-26.

This will be a 150% increase on FY 2020’s revenue and almost double its current subscriber numbers. One broker that appears confident it will get there is Morgan Stanley. It has an overweight rating and $40 price target on Altium’s shares. The Altium share price is currently changing hands for $37.26.

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan is a growing provider of enterprise mobility software. This software allows sales and service organisations to increase their sales win rates, reduce expenditures, and improve customer satisfaction by pairing functionality with a highly-intuitive user interface. This provides users with an advanced content management system, document automation, internal communications, and fully integrated modern LMS. Bigtincan has experienced strong demand for its platform over the last few years, which has led to stellar recurring revenue growth.

Pleasingly, management remains confident in its long term outlook and notes that the sales engagement platform will be worth $6 billion a year by 2021. It also recently announced the acquisition of Agnitio, a Danish-based company that is a pioneer in sales enablement for the Life Sciences sector. This went down well with Canaccord Genuity, which has slapped a buy rating and $1.40 price target on its shares. The Bigtincan share price is trading at $1.22 this afternoon.

More reading

• ASX 200 up 1.3%: CBA Q1 update, tech shares rebound, JB Hi-Fi sinks
• 3 great ASX tech shares to buy
• 3 ASX shares targeting huge growth in the 2020s
• Bigtincan (ASX:BTH) share price on watch after new contract win
• 3 rules that helped me 10x my money with Altium (ASX:ALU) shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium and BIGTINCAN FPO. The Motley Fool Australia has recommended BIGTINCAN FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 2 ASX growth shares to buy in November appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3pbiq1w

The Xero Limited (ASX: XRO) share price has been one of the best performers on the S&P/ASX 200 Index (ASX: XJO) on Wednesday.

At one stage today the cloud-based business and accounting platform provider’s shares were up over 13% to a record high of $130.50.

The Xero share price has since pulled back a touch but is still up a decent 6.5% at the time of writing.

Why is the Xero share price zooming higher today?

Investors have been buying Xero shares on Wednesday for a couple of reasons.

The first is the impending release of its half year update tomorrow morning.

It appears as though some investors are expecting the company to deliver a strong result despite the negative impact that COVID-19 is having on small businesses.

What else is driving the Xero share price higher?

Also giving Xero’s shares a boost today is its inclusion in the illustrious MSCI Global Standard index this morning following its quarterly review.

Xero was the only ANZ based company out of 141 new additions to the index this morning. Thankfully for local investors, no Australian companies were among the 135 companies that were deleted from the index.

Given that the MSCI Global Standard index is one that fund managers and index funds track, the buy side has been a lot firmer than usual today and helped drive its shares higher.

What is the MSCI Global Standard index?

The MSCI Global Standard index is MSCI’s flagship global equity index. It is designed to represent the performance of the full opportunity set of large and mid-cap stocks across 23 developed and 26 emerging markets.

According to MSCI, as of December 2019, the index covered more than 3,000 constituents across 11 sectors and approximately 85% of the free float-adjusted market capitalisation in each market.

It has been built using MSCI’s Global Investable Market Index (GIMI) methodology, which is designed to take into account variations reflecting conditions across regions, market cap sizes, sectors, style segments, and combinations.

More reading

• ASX 200 up 1.3%: CBA Q1 update, tech shares rebound, JB Hi-Fi sinks
• Why CBA, Straker, Woodside, & Xero shares are surging higher
• 3 great ASX tech shares to buy
• Why ASX 200 technology shares are again racing higher
• How did the WAAAX shares perform in the last quarter?

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 Xero. 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 Why the Xero (ASX:XRO) share price jumped 13% to a record high today appeared first on Motley Fool Australia.

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

A natural human need for “emotional comfort” costs retail investors 3% in lost returns each year.

However, United Kingdom behavioural finance firm, Oxford Risk, warned this week that losses in the year of the COVID-19 pandemic would be even higher.

This is because emotions take over even more in times of volatility.

“During a crisis, investors are likely to focus too much on the present and on the detail, feeling compelled to do something even when sitting tight is the best solution,” stated the company.

“They can gravitate towards the familiar – often leading to underinvestment, selling low, or decreased diversification.”

These behaviours are common to many investors, even experienced ones.

Oxford Risk Chief Executive, Dr Marcus Quierin, said such acts devastatingly result in turning theoretical losses into actual ones.

“If they don’t need to withdraw money for immediate expenses, then the losses are only virtual… until they panic and make them real,” he said. 

“The investments in the news are not your investments. Retail investors should avoid watching the markets day-to-day as this will only increase anxiety to no useful end, and make you feel like you should be doing something, without any useful guidance to what that should be.”

If your original strategy was to invest for the long haul, Quierin said, then any market volatility should be viewed through long-term lenses.

Focus on what you can control

The Oxford Risk study found that many retail investors have increased their proportion of cash this year because of the volatility.

But this reluctance to invest would cost them 4% to 5% per year over the long term.

Losses due to timing — selling low and buying high — was calculated at an average of 1.5% to 2% per year.

Quierin said trying to time the market is a mug’s game.

“Investors should focus on what they can control. It’s the most ancient advice there is, and still the most important,” he said.

“You can’t move the market or predict when it’s at the ‘bottom’ or the ‘top’. You can postpone discretionary spending and use tumultuous times as an opportunity to take stock of your long-term financial plans. And you can control the opportunity to benefit from the ‘risk premium’ – the long-term reward for owning shares that has eventually weathered every short-term storm yet.”

The volatility of 2020 is perfectly demonstrated in the wild ride that the S&P/ASX 200 Index (ASX: XJO) has had. 

When the market crashed in March during the first coronavirus lockdown, the index lost 36%. Then from that trough, it has gained more than 40% as at 11 November.

Oxford Risk develops software that assists financial advisers and institutional investors to overcome behavioural biases.

“There is too much guesswork and not enough technology. This means that assessment of client emotional proclivities is noisy, biased and prone to error… it is too subjective,” said Oxford Risk behavioural finance head, Dr Greg B Davies.

“This is not to advocate removing humans from the process… Human conversations are vital, particularly in a crisis, but advisers need to be assisted by better diagnostic tools enabling accurate assessment of the client’s personality and likely behavioural tendencies.”

More reading

• ASX 200 up 1.3%: CBA Q1 update, tech shares rebound, JB Hi-Fi sinks
• 5 things to watch on the ASX 200 on Wednesday
• Enjoying your ASX 200 gains? Here’s why you should watch out for January
• Vaccine hopes cause ASX 200 to rise on Tuesday
• Why the JB Hi-Fi (ASX:JBH) share price is down 7% today

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 The irresistible urge that costs retail investors 3% a year appeared first on Motley Fool Australia.

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