If you have $10,000 sitting in a savings account and no immediate plans for it, I would suggest you consider investing it into the share market where the potential returns are vastly superior.

But where should you invest these funds? I think the three ASX shares listed below would be great options:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

I think investing $10,000 into the BetaShares NASDAQ 100 ETF would be a great idea. This is my favourite exchange traded fund on the ASX and for good reason. It gives investors access to the 100 largest non-financial shares on the NASDAQ index. This means you’ll be buying a piece of the likes of Amazon, Apple, Facebook, Microsoft, Netflix, and Google parent, Alphabet. Given the very positive long term outlooks of these companies, I believe the Nasdaq 100 index is likely to outperform most markets over the next decade. This could make it a great buy and hold option.

REA Group Limited (ASX: REA)

I think REA Group would also be a great place to invest $10,000 with a long term view. It is a leading property listings company with websites in Australia, Europe, Asia, and the United States. I’ve been very impressed at the way the company has performed over the last couple of years despite the tough trading conditions it has faced. So when trading conditions finally improve, I’m confident that its earnings growth will accelerate. This could drive the REA Group share price notably higher over the 2020s.

ResMed Inc. (ASX: RMD)

A final option to consider investing $10,000 into is ResMed. I think this sleep treatment-focused medical device company is one of the best buy and hold options on the local share market. This is because I believe it is well-placed for growth over the 2020s thanks to its industry-leading masks and software and its sizeable market opportunity. The company has previously suggested that there could be upwards of 1 billion people impacted by sleep apnoea worldwide. As the vast majority of these are undiagnosed, it gives ResMed a very long runway for growth. So after smashing the market in the 2010s, I would not bet against the ResMed share price repeating its heroics in the current decade.

More reading

• Diversify your portfolio with BHP, ResMed, and Wesfarmers shares
• Why I would buy CSL and these ASX blue chip shares in FY 2021
• These 3 ASX healthcare shares are at all-time highs!
• Where I would invest $10,000 into ASX shares in FY 2021
• The top 10 performing ASX shares over the past year

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. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS, REA Group Limited, and ResMed 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 Where to invest $10,000 into ASX shares in July appeared first on Motley Fool Australia.

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The gold price has been a quiet achiever over the year so far. While most investors’ attention has been focused on the recovery of the S&P/ASX 200  (INDEXASX: XJO) since the market bottom on 23 March, the gold price has also been climbing. At March’s low, the yellow metal was priced around US$1,478 an ounce. Today, that same ounce will set you back US$1,778 (which is more than a 20% bump). Just 2 days ago, gold hit $1,787 an ounce — it’s the highest price since 2011’s all-time high of $1,917.90.

Why has the gold price been climbing?

Gold is usually viewed as a ‘safe haven’ asset due to its physicality, scarcity, and former role as a monetary base. The coronavirus pandemic has created an almost perfect environment for gold to flourish in this role in recent months. Further, investors worry about the consequences of central banks using ‘quantitative easing’ (QE) to assist their economies through the crisis. QE is viewed by many people as ‘money printing’. This is leading to fears of an inflationary investing environment in the coming years. Last month, I wrote about how the ultra-rich are hoarding gold for this very reason.

How can you invest in gold?

There are 3 conventional ways of investing in gold:

1. Buying physical gold bullion
2. Invest in a gold miner
3. Buy gold through an exchange-traded fund (ETF).

Buying physical bullion can be unattractive to investors due to storage and transportation costs, so we’ll leave this out of the discussion.

That leaves ETFs or ASX gold miners for your perusal.

Advantages of gold ETFs

A gold ETF is an easy way to invest in gold because the fund manager buys and stores the gold on investors’ behalf, usually in a bank vault or other secure location. An ASX example is the ETFs Metal Securities Australia Ltd (ASX: GOLD).

Gold ETFs are an easy choice, as they will usually mirror the returns you will see in the gold price. This will, of course, be adjusted for currency fluctuations. But there are a couple of drawbacks. Gold (as an unproductive asset) gives off no yield, so you can’t generate cash flow unless you sell your units. Also, the gold still has to be stored and guarded, which means you will pay a fee to the ETF for the privilege.

Advantages of ASX gold miners

A gold miner is another popular way of gaining exposure to gold. As a gold miner is a company, you, as a shareholder, indirectly ‘own’ any gold the company mines. And as a company is (hopefully) profitable, you can also receive a yield on your investment through dividend payments. As an example, Newcrest Mining Limited (ASX: NCM) is the largest ASX gold miner and currently offers a trailing dividend yield of 1%.

But the good news for a gold miner is that it can deliver returns that exceed the gold price movements. If a company’s cost to mine an ounce of gold is US$1,000, and gold is selling for $1,500 an ounce, the company makes a profit of $500 per ounce. But if gold prices rise to US$2,000 an ounce, your investment just doubled its profitability, even though gold ‘only’ rose 33%.

Of course, this works in reverse too. Meaning that a gold miner is effectively a ‘leveraged bet’ on gold prices. There are also other concerns to worry about with a miner including how well the company is run and the debt it employs.

Foolish takeaway

A gold miner can be a lucrative way to gain exposure to gold. But it’s also riskier than just owning physical bullion or investing in an ETF. As such, if exposure to gold is important to your investing philosophy, I think most retail investors are best served by an ETF.

More reading

• The Webjet share price is dividing analysts even as it becomes a likely takeover target
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• 2 dirt-cheap ASX shares to buy next week
• ASX 200 closes 0.4% higher, Cochlear share price up 6%

Motley Fool contributor Sebastian Bowen owns shares of Newcrest Mining Limited. 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 Gold at record highs! Are ASX gold miners or ETFs a better bet? appeared first on Motley Fool Australia.

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The prospects for dividend stocks may prove to be somewhat challenging in the short run. After all, risks such as political uncertainty in the United States and Europe, as well as the potential for a rise in coronavirus cases later this year, could provide difficult trading conditions for many businesses.

However, those risks mean that many companies now trade on low valuations that could lead to high returns in the long run. Buying them now instead of other popular assets could boost your financial position over the coming years.

Bargain dividend stocks

The low valuations of dividend stocks is a key part of their appeal at the present time. They appear to offer wide margins of safety in many cases that could translate into improving returns in the long run.

A strategy of buying high-quality companies while they offer wide margins of safety has been highly profitable for many investors in the past. Value investors such as Warren Buffett have been able to purchase stocks when risks are relatively high and their prices are reflective of weaker investor sentiment. Over time, the stock market has always recovered from the various risks it has faced to produce high single-digit returns over the long term.

Through buying a diverse range of dividend stocks today, you can access low valuations and high yields that could lead to attractive total returns as the world economy recovers.

Income opportunities

Dividend stocks have been a popular means for income-seekers to generate a passive income since the global financial crisis. Lower interest rates have caused other income-producing assets, such as cash and bonds, to become a less viable means of producing a worthwhile passive income. Therefore, many investors have focused their capital on dividend shares when they would normally have also held cash and/or bonds in the past.

This situation is likely to be prolonged by the recent market crash. Policymakers across many large economies are set to remain supportive of the global economy’s growth prospects during what is proving to be a hugely damaging period following the pandemic. Rising unemployment and weaker GDP growth may encourage sustained low interest rates that make dividend stocks one of the few means of generating an above-inflation income return over the coming years.

Dividend reinvestment

The past performance of equities suggests that buying dividend stocks could increase your chances of generating market-beating returns. A large proportion of the stock market’s total returns have been derived from the reinvestment of dividends. This trend could persist in the coming years, as the continued payment of generous dividends may provide compounding opportunities for investors.

Therefore, even if you do not desire a passive income today and are looking for capital growth over the coming years, buying a selection of dividend stocks could help you to achieve your financial goals.

More reading

• The Webjet share price is dividing analysts even as it becomes a likely takeover target
• Another stock market crash may be ahead. I’d take these 3 steps to get rich from it
• How I’d invest in this stock market crash to make a passive income
• 3 of the best ASX growth shares to buy for the 2020s
• 3 very reliable dividend shares I plan to pay for my retirement

Motley Fool contributor Peter Stephens 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 3 reasons why I’d buy dirt-cheap dividend stocks right now appeared first on Motley Fool Australia.

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There are many reasons why the Webjet Limited (ASX: WEB) share price will be in the spotlight in FY21 as it emerges from the COVID-19 baptism of fire!

The online travel agent will likely keep investors on the edge of their seats as its one of the most divisive stocks on the S&P/ASX 200 Index (Index:^AXJO) and could be a star player in mergers and acquisitions (M&As).

Of course, Webjet isn’t the only one in the travel sector to be hit hard by the coronavirus outbreak.

The Flight Centre Travel Group Ltd (ASX: FLT) share price and Qantas Airways Limited (ASX: QAN) share price have copped a beating, but it’s Webjet that’s splitting the experts.

It seems Flight Centre and Qantas are easier calls. Brokers are overwhelmingly recommending investors sell Flight Centre and buy Qantas, according to data on Yahoo Finance.

Consensus divided over Webjet

But in the case of Webjet, they are equally split between “buy” and “hold or sell” after the group received a €100 million ($162 million) cash injection through the issue of convertible notes.

The key point of contention is the uncertainty over when state and international borders will reopen, even though Webjet bought itself time through the convertible notes and the emergency $346 million capital raising in April.

A bull’s view

UBS is a bull when it comes to Webjet. The broker upgraded its price target to $5.35 from $3.75 a share and reiterated its “buy” recommendation on the stock on Friday.

“A high degree of uncertainty still remains around the travel market recovery, which will likely create a more volatile share price in the short-term,” said the broker.

“However, we continue to believe the high quality, well-capitalised players like WEB will take share and potentially acquire good businesses at discounted prices.”

Better placed than its peers?

UBS is feeling confident about Webjet’s future as the group aims mainly at leisure travellers who can easily substitute locations for holidaying. State border restrictions are lifting bar Victoria, but even then, all states are likely to allow border crossings in the not too distant future.

Further, there’s talk that Australia and New Zealand may form a travel bubble by September and this will open another market for Webjet. If travellers can’t go to Bali, they can head to Cairns or somewhere in New Zealand.

A bear’s view

However, some brokers like Morgan Stanley aren’t so sure. The extra cash from the con notes may give Webjet ammunition to make an opportunistic acquisition or two (so says management), but Morgan Stanley is taking a dim view of the move.

“Talk of meaningful M&A [merger and acquisition] following a c. 150% dilution event when cash burn is still close to peak levels seems optimistic,” said the broker.

“We feel that risks around receivables, working capital unwind and prolonged disruption are the main issues, and that balance sheet protection is the priority.”

Morgan Stanley prefers the Corporate Travel Management Ltd (ASX: CTD) share price over Webjet.

Webjet a takeover target?

As an aside, it’s also worth noting the hunter could be the hunted. Takeover speculation for Webjet was running rife in late 2019.

One has to wonder if potential bidders could come out of the woodwork amid the chaos, especially now that Webjet is cashed up.

Stranger things have happened!

More reading

• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• 10 more top broker ASX share picks for FY21
• 2 dirt-cheap ASX shares to buy next week
• ASX 200 closes 0.4% higher, Cochlear share price up 6%

Motley Fool contributor Brendon Lau owns shares of Webjet Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post The Webjet share price is dividing analysts even as it becomes a likely takeover target appeared first on Motley Fool Australia.

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A number of risks currently face investors that could cause another market crash over the coming months. For example, there could be a second wave of coronavirus across many of the world’s major economies. There may also be rising trade tensions between the United States and China that cause investor sentiment to weaken.

Therefore, now could be the right time to focus your capital on high-quality shares that have a higher chance of surviving an economic downturn. Through taking a long-term view, and keeping some cash on hand, you could benefit from another stock market crash.

Holding cash in a market crash

Having some cash available during a market crash can be highly beneficial to long-term investors. It provides peace of mind so that you can pay for unexpected costs at a time when job security may be low. It also means that you are in a position to capitalise on lower valuations across the stock market.

Clearly, holding large amounts of cash for the long term is unlikely to produce high returns. But, at a time when the prospects for the world economy are uncertain, ensuring you have liquidity within your portfolio could be a major advantage should stock prices become more attractive over the coming months.

High-quality stocks

High-quality businesses may be in a better position than their industry peers to survive another market crash. For example, companies with solid balance sheets that contain little amounts of debt may be under less pressure to deliver sales and profit growth on a relative basis. Likewise, companies with wide economic moats may be less affected by a period of weaker growth for the world economy.

Furthermore, high-quality businesses may be able to take advantage of weak operating conditions to strengthen their competitive positions. For example, they may be able to take market share from their peers to improve their profit growth potential over the coming years. This could aid their share price performances, and boost your portfolio returns.

A long-term view

A market crash can cause investors to panic about paper losses within their portfolio. However, a loss is not realised until a stock is sold. As such, holding your stocks for the long term could be a means of allowing them to recover from short-term declines in their valuations.

Similarly, when buying stocks it could be a sound move to have modest expectations about their prospects over the short run. The challenging outlook for the economy means that many stocks may struggle to post improving levels of profitability. However, with the world economy and the stock market having strong track records of recovery over the long run, adopting a buy-and-hold strategy could allow you to benefit from improving performances over the coming years.

More reading

• 3 reasons why I’d buy dirt-cheap dividend stocks right now
• The Webjet share price is dividing analysts even as it becomes a likely takeover target
• How I’d invest in this stock market crash to make a passive income
• 3 of the best ASX growth shares to buy for the 2020s
• 3 very reliable dividend shares I plan to pay for my retirement

Motley Fool contributor Peter Stephens 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 Another stock market crash may be ahead. I’d take these 3 steps to get rich from it appeared first on Motley Fool Australia.

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