If you’re just starting out with investing, you may not have tens of thousands of dollars to invest into the share market.

But I wouldn’t let that put you off starting your investment journey. This is because even small investments can grow into something meaningful over a long enough timeframe thanks to compounding.

For example, $2,500 invested in the share market each year for 20 years and earning a 10% return would grow into almost $160,000.

And if you’re able to increase your level of investments as the years go by and your earnings increase, you could grow your wealth materially more.

But which shares should you start with? I think you would be best looking long term and at companies which have the potential to grow their earnings strongly.

Two that tick a lot of boxes for me are listed below. Here’s why I would invest $2,500 into them:

Nearmap Ltd (ASX: NEA)

I think this growing aerial imagery technology and location data company could be a great place to invest $2,500. Nearmap provides high resolution aerial imagery, city-scale 3D datasets, and integrated geospatial tools to businesses. It has a massive opportunity in a highly fragmented market and looks well-placed to grow it market share significantly over the next decade thanks to its high quality product offering.

Pushpay Holdings Group Ltd (ASX: PPH)

Another ASX share to consider investing these funds into is Pushpay. It is a donor management platform provider which is well-positioned to benefit from the digitisation of giving and the shift to a cashless society. It is aiming to capture a 50% share of the medium to large church market in the future, which represents a US$1 billion opportunity. If it delivers on this target, which I suspect it will, then it should drive strong earnings growth over the next decade.

More reading

• 2 fast-growing ASX tech shares to buy right now
• 3 ASX shares to buy and hold for the next decade
• Why Nearmap and this ASX mid cap share could be strong buys
• $3,000 invested in these 2 shares could make you a fortune over the next 10 years
• The top ASX growth shares I would buy for the 2020s

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 Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended Nearmap 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.

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On Wednesday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three ASX 200 shares that have just been given sell ratings by brokers are listed below.

Here’s why these brokers are bearish on them:

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

According to a note out of UBS, its analysts have retained their sell rating but lifted their price target on this medical device company’s shares to NZ$18.20 (A$17.09). While the broker acknowledges that Fisher & Paykel Healthcare will have been benefiting during the pandemic, it doesn’t appear convinced it will be as much as its share price implies. In light of this, it has retained its sell rating, largely on valuation grounds. The Fisher & Paykel Healthcare share price is trading notably higher than this price target at $26.84 this afternoon.

InvoCare Limited (ASX: IVC)

A note out of the Macquarie equities desk reveals that its analysts have downgraded this funerals company’s shares to an underperform rating and cut the price target on them to $10.20. Macquarie believes there is a risk of InvoCare falling short of expectations in FY 2020. It notes that its research is indicating that the company is losing market share. In addition to this, it suspects there will be lower deaths during the current flu season because of social distancing initiatives. The InvoCare share price is trading at $11.12 at the time of writing.

Regis Resources Limited (ASX: RRL)

Analysts at Ord Minnett have downgraded this gold miner’s shares to a sell rating with a $4.10 price target. According to the note, the broker made the move on valuation grounds after a strong share price gain over the last three months. Prior to today, the Regis share price was up over 130% in the space of just three months thanks to a strong gold price. Regis’ shares are currently changing hands for $5.08.

More reading

• Australian unemployment jumps to 7.1%
• ASX 200 down 1.3%: Big four banks tumble, Afterpay tipped to go higher
• Where to invest $5,000 in an irrational market
• Next phase of bull market could see ANZ Bank outperform Afterpay
• Is the Macquarie share price a solid buy today?

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.

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The Australian Finance Group Ltd (ASX: AFG) share price has leapt 16% this morning following the announcement the ACCC will grant clearance for its merger with rival Connective. Both businesses will become better positioned to invest in digital technologies and innovation in the face of digital disruption faced by the sector. 

What does AFG do?

AFG is one of Australia’s largest mortgage broking groups and was established in 1994. It began as a mortgage aggregator which provides mortgage brokers access to products and support. It now offers business finance, insurance products, and AFG-branded and securitised products throughout Australia. 

What is the Connective merger?

AFG proposed to merge with competitor, Connective. The combination would create Australia’s largest mortgage aggregator by a significant margin, accounting for almost 40% of Australia-operating mortgage brokers. More than half of all home loans written each year are initiated through the broker channel. 

After the merger, the AFG and Connective brands intend to operate separately. The transaction is also subject to court approval with a final decision likely in the second half of FY20. 

How is the AFG share price performing?

The AFG share price has more than doubled from its March low of 92 cents with shares currently trading at $1.96. AFG entered the S&P/ASX 300 (ASX: XKO) in the most recent quarterly rebalance due to this increase.   

AFG announced in its most recent update that April operating results had been strong. However, COVID-19 is expected to create some economic uncertainty. Lodgements and settlements could experience adverse effects on 1H FY21. Lodgements in the March quarter were up 33% on the previous corresponding period, driven by record-low interest rates. 

Nonetheless, residential settlements are expected to fall in coming months driven by a slowdown in broader economic activity. This will result in upfront commissions payments softening. Operating cash flow from existing trail commission arrangements on AFG’s $151.7 billion trail book will, however, continue. 

Foolish takeaway 

AFG’s merger will provide a strong base to benefit from an eventual recovery, despite the Australian mortgage market being expected to feel a downturn as a result of COVID-19. 

More reading

• Keep a watch on these 3 ASX trends next week

Motley Fool contributor Kate O’Brien 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.

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The Infinity Lithium Corporation Ltd (ASX: INF) share price is skyrocketing today after the company provided a European funding update.

At the time of writing, Infinity Lithium shares are flying 91.67% higher to 11.5 cents per share. With this rise, Infinity Lithium’s current market capitalisation stands at around $27 million.

Infinity Lithium is a minerals company focused on developing its 75%-owned San José Lithium Project and produce battery-grade lithium hydroxide in Spain.

The San José deposit is an advanced, previously mined brownfield development opportunity located in Extremadura, Spain. It is the second-largest JORC hard rock lithium deposit in the European Union (EU).

Why is the Infinity Lithium share price skyrocketing?

This morning, Infinity Lithium announced it has executed binding agreements for multi-stage funding from the EU-backed public-private partnership EIT InnoEnergy.

While Infinity Lithium revealed details of the funding in March, back then the deal was only at the memorandum of understanding stage.

Infinity’s San José Lithium Project is the first lithium project in Europe to secure funding from EIT InnoEnergy. The funding includes a staged amount of up to €800,000 to support the project’s first phase of feasibility study test work.

Following this, EIT InnoEnergy will leverage the European Battery Alliance (EBA) network to facilitate the funding for phase two, with an investment of up to €2.4 million. Phase two involves the construction of the pilot plant at San José.

This funding also comes with an assistance agreement to support fundraising activities for up to €300 million in debt and equity to fund the development of the San José project.

Commenting on today’s update, managing director Ryan Parkin said:

“The Board of Infinity is delighted to announce the completion of these multi-level agreements, highlighted by the financial endorsement of the San José Project through the funding by EIT InnoEnergy.”

“This multi-level collaboration will see San José benefit through exposure to EIT InnoEnergy and the EBA’s vast European network as the EU focuses on the essential requirement to secure lithium chemicals and develop an integrated lithium-ion battery value chain.”

More reading

• Start your investment journey with a $2,500 investment in these ASX shares
• Top brokers name 3 ASX 200 shares to sell today
• ASX stock of the day: The AFG share price surged 16% after merger clearance
• Why the Boral share price could be set for more growth in FY21
• No. 1 rule of investing? Ask Benjamin Graham

Motley Fool contributor Cathryn Goh 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.

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The Boral Limited (ASX: BLD) share price is on the move again this week, continuing the resurgence of the blue-chip building material and construction juggernaut since it bottomed out at $1.68 in March. Despite being down 2.79% at the time of writing, Boral’s current share price of $3.66 represents a 117% gain on its March low.

There’s no denying the company has underperformed in recent years, exemplified through multiple earnings downgrades and the ‘financial irregularities’ scandal of its American windows business. Despite this, here are 3 reasons why I remain bullish that Boral will turn the corner in FY21.

Management shake-up

In my opinion, the role management plays in the overall success or failure of a business is crucial. This is strongly endorsed by Jim Collins in his renowned management book Good to Great. Collins argues that getting the right people in the right seats on the bus – and getting the wrong people off the bus – is essential for a company’s broader financial success.

Boral is going through significant changes in management, as the old guard under current CEO Mike Kane departs and a new era is ushered in. Various changes to the management team of its troubled North American operations were announced last month.

This week, the highly anticipated appointment of Zlatko Todorcevski as the incoming CEO was also confirmed. In its statement to the market, the company revealed Todorcevski has 3 decades of experience in finance, business planning and strategy across several industries, and has maintained senior positions in Brambles Limited (ASX: BXB), Oil Search Limited (ASX: OSH), and BHP Group Ltd (ASX: BHP).

Furthermore, the recent 10% stake taken in the company by Seven Group Holdings Ltd (ASX: SVW) is likely to include a fresh face in Boral’s boardroom. Overall, I’m optimistic these changes may provide the company with reinvigorated energy to navigate the present economic environment. To extend the Jim Collins’ metaphor, Boral seems to be making the necessary management changes to get the bus back to full speed, and that will likely enhance the company’s financial performance in the coming years. This period of transition may be an ideal buying opportunity for prospective investors.

Shoring up its liquidity

The COVID-19 pandemic has reiterated the importance of robust company cashflow in all industries, but the construction and materials sector has been one of the hardest hit. Consequently, Boral’s liquidity has faced substantial scrutiny, leading to the company bolstering its balance sheet through various debt mechanisms.

These encompass a US private placement note issue of US$200 million, as well as various bilateral bank loan facilities including a $365 million, two-year debt obligation. These additional debts have allowed the company to bolster its balance sheet, which now holds $1.3 billion of cash and undrawn funds combined. Coupled with its expanded debt-financing campaign, Boral has been proactive in mitigating its capital expenditure by 15–20% this financial year, a strategic decision estimated to save up to $330 million.

With debt at relatively inexpensive levels due to the low interest-rate environment in Australia and globally, I like Boral’s decision to increase its cash on hand and improve its liquidity on the books. And as an added bonus for shareholders, the company’s decision not to utilise an equity capital raising has ensured no further dilution of its share price.

Having boosted its short-term cash flow, Boral seems well-placed to emerge from COVID-19 relatively unscathed financially. This should enable the company to maximise its profitability from new government projects heading its way.

Government-led infrastructure projects

Having recognised the lull in the construction industry, the federal government’s new JobMaker economic recovery plans will arguably send the Boral share price higher yet.

Earlier this week, prime minister Scott Morrison announced 15 key infrastructure projects that are being prioritised to facilitate jobs growth and spur economic productivity. According to an ABC article, these projects include the Snowy Mountains 2.0 scheme and a $10 billion inland rail project from Melbourne to Brisbane.

The government has also provided a $25,000 incentive for people to build or renovate their homes. This will further boost a national construction sector lagging in 2020 thus far.

As the premier supplier of construction materials, I think plenty of government and household work might be heading Boral’s way in FY21. At a time when large-scale projects are drying up left and right, Morrison’s infrastructure plans may be the lifeline the company needs to increase its revenue and unlock further returns for shareholders in the year ahead.

Foolish takeaway

Having watched this company’s share price claw back the majority of its losses in the past month or two, some prospective investors may feel they’ve missed the chance to get on the Boral bus.

Nonetheless, I think the shake-up in management may bring with it new ambition to take the company in a new direction, and this may favourably coincide with post-COVID government infrastructure projects being accelerated.

Overall, I think Boral has the necessary liquidity and successful track-record to deliver for shareholders in FY21 and beyond.

More reading

• Next phase of bull market could see ANZ Bank outperform Afterpay
• Why the Reliance Worldwide share price is outperforming today
• Leading brokers name 3 ASX 200 shares to buy right now
• Why the Seven Group share price was up 2% on Friday
• Keep a watch on these 3 ASX trends next week

Motley Fool contributor Toby Thomas owns shares of Boral 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.

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When you ask most people what the no. 1 rule of investing is, they’ll probably quote you Warren Buffett’s famous line “don’t lose money”. Whilst this simple (if not slightly confusing) rule is great advice and is easy to remember, there’s another father of investing I want to talk about today. And that person is Benjamin Graham.

Ben Graham died back in 1976. However, in his day he was a masterful investor and was one of Warren Buffett’s mentors and even employers for a time. In 1949, he wrote one of the most famous books ever written on value investing – called (appropriately) The Intelligent Investor.

This book is full of wonderful investing lessons. But one lesson that stands out for this writer above others is Graham’s description of ‘Mr Market’.

Mr Market is described as every investor’s business partner, who is a fair businessman offering fair prices most of the time. But he does have trouble dealing with vicious mood swings, which can cause some irrationality. One day, he offers to sell you his share of a business at a stupidly high price. The next, he wants to buy your share for an offensively low price.

Graham points out that Mr Market isn’t offended by an investor taking him up on his offer or not. Regardless, he comes back day in, day out with a new offer. But he also points out that most investors don’t know how to deal with their mercurial business partner. They might panic when Mr Market offers them a low price for their share of a business, capitulate to their fears and accept Mr Market’s offer. Otherwise, they might offer to buy Mr Market’s share off him if he offers to overpay for theirs in turn.

Investing lessons from ‘Mr Market’

Now if you haven’t already figured out that ‘Mr Market’ is an allegory for the share market, then I apologise for being too subtle. But Graham’s lessons on Mr Market are as true today as they were back in 1949. As such, Graham’s no. 1 rule of investing (in my view) can be distilled into this: know how to deal with (and take advantage of) Mr Market.

In my view, the first goal of an aspiring investor should be to understand how this ‘Mr Market’ allegory applies when investing. It doesn’t take a lot of experience in the markets to see how true it is in so many ways. And understanding this parable is a sure way to put yourself on the path to successful investing. But the second goal should be to learn how you can use Mr Market’s temperament to your advantage. Financial markets like the share market run on human nature more than anything else. And they behave in a similar fashion today as they did in 1949. This is unlikely to change in the future, either, but if you understand this then you can use it to your advantage.

Foolish takeaway

So next time ‘Mr Market’ makes you an offer, you should think about whether its a fair or an emotional, mood-driven one. The best money you can make can be on the back of an emotional decision, but equally, these decisions can also be the most dangerous. Making sure you’re on the right side of that equation, again and again, is how investors like Buffett became so successful, and its how we all can follow in his (and Graham’s) footsteps.

More reading

• Is it too late to buy at today’s Kogan share price?
• Australian unemployment jumps to 7.1%
• Should you buy Domino’s shares right now?
• ASX 200 down 1.3%: Big four banks tumble, Afterpay tipped to go higher
• Splitit share price rockets 33% on new Mastercard deal

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.

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The Kogan.com Ltd (ASX: KGN) share price has had an amazing ride on the ASX over the past few months. It has risen from $3.92 in mid-March to reach a new all time high of $14.29 in today’s trade. This was before pulling back slightly to its current price of $14.01 at the time of writing. 

This growth has been driven by a number of positive market updates, with Kogan successfully tapping in to market opportunities offered up during the coronavirus pandemic.

Earlier this month, Kogan successfully completed a $100 million placement. This capital will provide Kogan with the financial flexibility to act quickly on any lucrative future opportunities, in its quest to further expand.

So, with such a strong recent rise in value, does the Kogan share price still offer investors growth potential right now?

Sales and customers continue to climb

In its latest market update in early June, Kogan revealed that its active customers continue to climb higher. Customer numbers were up by 6.5% during May to a total of 2,074,000. For the fourth quarter to date, i.e., April and May, gross sales for Kogan soared higher by more than 100% compared to the prior corresponding period in 2019.

Kogan’s pipeline for new sellers in its Kogan Marketplace also continues to remain very strong. This is adding further fuel to help to increase the company’s strong sales momentum and, in turn, drive the Kogan share price even higher.

Due to COVID-19 lockdown restrictions, specialist online retail sites such as Kogan have seen a spike in online sales. In particular, there has been strong demand for home office equipment and accessories such as PCs and laptops. In contrast, many bricks and mortar retailers have suffered from a heavy decline in foot traffic. While some have managed to keep a portion of sales momentum alive through their supplementary online channels, for many the impact on their physical store channels has been significant.

Kogan also revealed in its June update that the company’s cash position remains very solid. It had $58.6 million of cash on its books at the end of May.

Is it too late to buy at today’s Kogan share price?

With such a massive share price jump over the past few months, the Kogan share price is definitely starting to look rather full. This is reflected in Kogan’s price-to-earnings (P/E) ratio which has now climbed to over 70.

While I wouldn’t be rushing out to buy Kogan shares at today’s price, I still believe the company is a reasonable buy for a long-term investment horizon.

I believe Kogan has created a solid foundation from which to tap into the rising demand for online shopping over the next decade. It has cleverly established a strong foot-hold in the local Australian market, upon which it can build over the coming years. Furthermore, the company’s expansion into a broad range of verticals provides sector diversification which can act as a buffer during different times in the investment cycle.

More reading

• 2 ASX shares to buy for beginners
• Why Zip Co and these All Ords shares have doubled in 12 months
• UBS picks the best ASX retail stocks for the post COVID-19 world
• Why AusCann, Phoslock, Kogan, & Village Roadshow are dropping lower
• How to earn $50,000 in dividends each year with ASX shares

Motley Fool contributor Phil Harpur owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com 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.

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to end its positive run with a sizeable decline.

At the time of writing the benchmark index is down a disappointing 1.5% to 5,900.8 points.

What is weighing on the market today?

While U.S. futures pointing to declines on Wall Street tonight are certainly not helping matters, today’s share market weakness could also be related to Australia’s rising unemployment levels.  

This morning the Australian Bureau of Statistics (ABS) released its jobs data and revealed another sharp rise in unemployment.

According to the release, Australia lost a further 227,700 jobs in May. This brought the total number of unemployed people to a sizeable 927,000. Which means that the unemployment rate has now risen to 7.1%, compared to 6.4% in April and 5.2% in March.

The head of labour statistics at the ABS, Bjorn Jarvis, commented: “The drop in employment, of close to a quarter of a million people, added to the 600,000 in April, brings the total fall to 835,000 people since March.”

What about monthly hours worked?

The unemployment rate doesn’t necessarily show the full extent of the disruption caused by the pandemic.

The ABS data also shows that monthly hours worked fell a further 0.7% in May. This means they are now down 10.2% since March after April’s data was revised up to a 9.5% decline.

Mr Jarvis explained: “The ABS estimates that a combined group of around 2.3 million people – around 1 in 5 employed people – were affected by either job loss between April and May or had less hours than usual for economic reasons in May.”

One small positive was that the underemployment rate decreased by 0.7 percentage points in May to 13.1%. However, this still remains 4.3 points above the March reading.

This means that the underutilisation rate, which combines the unemployment and underemployment rates, climbed to a new record high of 20.2% in May.

“Women continued to be more adversely affected by the labour market deterioration than men. Younger workers have also been particularly impacted,” said Mr Jarvis.

More reading

• ASX 200 down 1.3%: Big four banks tumble, Afterpay tipped to go higher
• Where to invest $5,000 in an irrational market
• Next phase of bull market could see ANZ Bank outperform Afterpay
• Is the Macquarie share price a solid buy today?
• 5 things to watch on the ASX 200 on Thursday

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.

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