The Volpara Health Technologies Ltd (ASX: VHT) share price is edging higher today after reporting its full-year results for the year ended 31 March 2020.

Volpara is a New Zealand-based, small-cap ASX share that develops and sells software solutions. It facilitates the early detection of breast cancer by improving the quality of mammogram-based screening programs. 

What did Volpara announce?

For the 12 months to 31 March 2020, the company reported total revenue of NZ$12.6 million, up 153% from NZ$5 million in FY19. Within this, growth in subscription revenue continued its upward trajectory, up 106% on the prior corresponding period to NZ$9.1 million.

Volpara expects growth in subscription revenue to continue in FY21 as it pivots MRS Systems – a provider of breast clinic management software acquired in mid-2019 – away from a capital sales model to an almost solely software-as-a-service (SaaS) model. Additionally, the full end-to-end platform will be available for sales.

Despite an improvement in gross margins, which was up from 83% in FY19 to 86%, the company recorded a net loss for the year before tax of NZ$22.3 million. This compares to a loss of NZ$11.8 million in the prior year.

This was primarily the result of an increase in operating costs due to organic growth and the additional costs incurred after the MRS acquisition. Operating costs increased 110% from NZ$17.1 million in FY19 to NZ$36 million in FY20.

Nonetheless, as revenue continues to grow faster than operating expenses, the company improved its net margin from -235% in FY19 to -176% in the current period.

Given the uncertainty on business activity resulting from COVID-19, the company has undertaken various cost-saving initiatives. Volpara expects these initiatives will yield reductions of between 10% and 15% on annualised operating costs.

Looking to cash flow, Volpara increased its cash receipts from customers during the year by 193% to NZ$16.3 million. Its cash balance as at 31 March 2020 stood at NZ$31.4 million, which has now expanded to NZ$69 million following a recent capital raising. Importantly, the company remains debt-free.

Outlook and management commentary

Looking forward, the company recognises the world has changed with COVID-19 but highlights the critical nature of breast screening. 

Volpara will focus on long-term SaaS contracts which appear resilient despite COVID-19. Most of its contract are 5-year annual rolling contracts, paid annually in advance. The company noted that cash collection continues to be strong, with no obvious signs of any significant churn risks.

Commenting on the full-year results, CEO Dr Ralph Highnam said:

“FY2020 was an excellent year for Volpara. We successfully conducted our first acquisition, medical software company MRS Systems in the United States, and built an installed software base covering over 27% of US women screened for breast cancer.”

“Despite the current Coronavirus pandemic, we ended the year with our strongest Q4 to date and Annual Recurring Revenue (ARR) of over NZ$18M. This has set up the strong accounting revenue numbers we’re presenting today, showing very significant growth year-on-year,” he added.

At the time of writing, the Volpara share price is trading 0.35% higher for the day after being up by nearly 4% in morning trade.

More reading

• Why didn’t Warren Buffett buy more shares in the recent bear market?
• 3 exciting small cap ASX healthcare shares to watch
• Top brokers name 3 ASX shares to buy next week
• 3 exciting small cap ASX shares that should be on your watchlist
• These small cap ASX shares could be stars of the future

Motley Fool contributor Cathryn Goh owns shares of VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. 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 Nearmap Ltd (ASX: NEA) share price has been a strong performer over the last couple of months.

Since March 29, the aerial imagery technology and location data company’s shares have zoomed a remarkable 123% higher to $2.23.

Is it too late to buy Nearmap shares?

Despite Nearmap’s impressive gain over the last couple of months, it is worth noting that they are still trading almost 50% lower than their 52-week high of $4.29.

I believe this leaves the company’s shares trading at a very attractive level for a long term investment. Especially given its high quality software and the fragmented and lucrative market it operates in.

I’m not the only one that thinks that the Nearmap share price is in the buy zone. This morning analysts at Goldman Sachs retained their buy rating and lifted their price target on its shares to $2.55.

Why is Goldman Sachs bullish on Nearmap?

Goldman Sachs was pleased with Nearmap’s better than expected market update on Thursday and named three key reasons why its shares are a buy.

The first is its large and growing market. The broker notes that Nearmap estimates the market opportunity in its four countries of operation (Australia, New Zealand, United States, and Canada) to be worth $2.9 billion per year.

This means that the annualised contract value (ACV) that it expects to achieve in FY 2020 of $103 million to $107 million is just a ~3.6% share of its overall market. This gives it a significant runway for growth over the next decade.

Another reason it is positive on the company is the fragmented nature of the aerial imagery market. Goldman believes this gives providers such as Nearmap an opportunity “to scale across a broad range of industry segments (i.e. such as architecture, insurance, government, utilities, solar panel providers).”

A third reason is the company’s technology. The broker believes it is very competitive versus its domestic and global peers. It notes that its strengths include high quality image capture and market leading frequency of capture. It also notes that a substantial investment has been made to provide oblique and 3D imagery and artificial intelligence/machine learning driven analytical capability at scale.

Combined, the broker believes Nearmap is capable of growing its ACV by a compound annual growth rate of 18% between FY 2019 and FY 2022.

I think Goldman is spot on with its buy rating, but is potentially being a little conservative with its estimates. I expect the company to deliver on its target of at least 20% growth over the period.

Overall, I think Nearmap is a great buy and hold option along with the likes of Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX).

More reading

• Brokers name 3 ASX 200 shares to buy right now
• 5 things to watch on the ASX 200 on Friday
• ASX 200 rises again, ASX banks push higher
• These ASX tech shares could take your portfolio to the next level
• Why ANZ, Blackmores, IDP Education, & Nearmap shares are racing higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia owns shares of Altium and Appen 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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The Fortescue Metals Group Limited (ASX: FMG) share price is showing little signs of stress even as the miner faces compensation claims that could cost it hundreds of millions.

But investors aren’t perturbed by the news that the High Court denied the company special leave to appeal a Federal Court ruling.

The Fortescue share price is a rare riser on the S&P/ASX 200 Index (Index:^AXJO). The stock inched up 0.5% to $13.59 during lunch time trade while the top 200 benchmark shed 0.9% of its value.

The performance of the other major miners was mixed. The BHP Group Ltd (ASX: BHP) share price slipped 0.3% to $35.05 while the Rio Tinto Limited (ASX: RIO) share price added 0.6% to $94.16 at the time of writing.

What the court ruling means

The High Court defeat means that the earlier ruling that found Fortescue had built the Solomon iron ore mining hub without the permission of traditional owners will stick.

The traditional owners are represented by the Yindjibarndi Aboriginal Corporation (YAC) and the YAC is now expected to launch a multi-million-dollar compensation claim against Fortescue, reported the Australian Financial Review.

Big compensation bill

The court gave YAC exclusive native title rights over 2,700 square kilometres of iron ore-rich land in Western Australia’s Pilbara region.

The AFR reported that some in the community believe the size of claim should be based on a percentage of Fortescue’s total revenue of about $70 billion over the past decade.

You can see how even a small percentage can work out to be a big number.

Why investors aren’t worried

However, investors may be brushing this new development aside as it’s too early to quantify the impact of YAC’s claim.

The process might also take years to resolve if it’s dragged through the court system again.

In any case, the market may have already factored in some level of compensation that Fortescue has to cough up. The miner was backing the breakaway Wirlu-murra Yindjibarndi Aboriginal Corporation.

Further, the miner has previously downplayed the significance of any payout and said that the case does not affect its mining tenure rights or current operations.

Foolish takeaway

The Fortescue share price outperformed right through the COVID-19 market meltdown as its earnings and generous dividend handouts are resilient to the deep recession.

Such defensive qualities are hard to find in the current environment. This explains why the stock jumped 28% since the start of the year when the ASX 200 fell 13%.

More reading

• Brokers name 3 ASX 200 shares to buy right now
• Ready to invest your first $1,000? Try these 2 ASX shares
• 3 cheap ASX 200 shares I’d buy today
• ASX 200 down 1.2%: Westpac tumbles, Appen reaffirms guidance, Costa CEO to retire
• Will the Wesfarmers share price climb higher in 2020?

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited and Rio Tinto Ltd. 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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This month I’ve been looking at how investments in the IPOs of a number of popular ASX shares have fared.

This includes the likes of Afterpay Ltd (ASX: APT) and CSL Limited (ASX: CSL). You can read about those IPOs here and here.

Today I thought I would turn my attention to New Zealand-based infant formula and fresh milk company A2 Milk Company Ltd (ASX: A2M).

How has a2 Milk Company performed since its ASX listing?

Technically speaking, a2 Milk Company didn’t list on the Australian share market through an IPO.

It first listed on the New Zealand stock exchange all the way back in 2004. The company then sought a dual listing on the Australian share market in March 2015.

The ASX listing didn’t impact its New Zealand listing, nor did it involve the raising of any new capital.

Once its shares were listed on the ASX, you could have picked them up for 56 cents apiece. This means that a $10,000 investment in its shares would have given you a total of 17,857 shares.

Since then a lot has changed. For a long time the company was playing catch up with rival Bellamy’s and seen as just a small time player in the industry. It’s also interesting to note that its operations were loss-making, much like those of Bubs Australia Ltd (ASX: BUB) today.

Today it is the largest ANZ infant formula brand and has a growing fresh milk footprint both here and in the United States.

It has also transformed from being a loss-making entity into one of the most profitable companies on the Australian share market.

The upper end of the company’s guidance for FY 2020 implies revenue of NZ$1,750 million and earnings before interest tax, depreciation, and amortisation of NZ$560 million. This represents a sizeable 34.1% and 35.4% increase, respectively, on the prior year.

Unsurprisingly, given this explosive growth in its earnings since 2015, its shares have been exceptionally strong performers.

Today’s the a2 Milk Company share price is changing hands for $17.64. Which means that the 17,857 shares you picked up in 2015 would now be worth a total of $315,000.

I think that is a pretty incredible return over a period of just over five years. But perhaps what is even better is that a2 Milk Company’s growth is far from over.

Given the modest market share its infant formula has in the China market and its expanding fresh milk footprint, I believe it is well-positioned to continue its strong earnings growth for a long time to come.

More reading

• Brokers name 3 ASX 200 shares to buy right now
• 10 quality ASX shares to buy in June
• 1 key trait to look for with most top ASX growth shares
• Is the A2 Milk Company share price in the buy zone?
• 3 outstanding ASX growth shares to invest $3,000 into 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 BUBS AUST FPO and CSL Ltd. The Motley Fool Australia owns shares of A2 Milk and AFTERPAY T FPO. The Motley Fool Australia has recommended BUBS AUST 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.

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Coles Group Ltd (ASX: COL) shares haven’t been having a good time of late.

Since 19 March 2020, the S&P/ASX 200 Index (ASX: JXO) has risen an extraordinary 21%. Over the same period, the Coles share price has fallen more than 12% from above $17 to where they sit today (at the time of writing) at $15.02.

Of course, from a year-to-date perspective, it’s a bit of a different story. Since the dawn of 2020 (which feels like a lifetime ago), the ASX 200 is still down 13.4%, whilst Coles shares have essentially been flat.

So what’s going on here? And more importantly, for investors, is the Coles share price a buy today?

Hot Coles or not?

The first thing to note is that Coles’ former parent company has been selling Coles shares like there’s no tomorrow. At the start of 2020, Wesfarmers Ltd (ASX: WES) owned a 15% stake in Coles – leftover from the demerger that occurred back in November 2018 (at around $12.80 a share).

Fast forward to today, and Wesfarmers has trimmed back its remaining stake in Coles to around 5%. Yes, Wesfarmers sold a ~5% chunk of its Coles stake in February this year, followed by another ~5% tranche in late March.

With Wesfarmers seeing no value in Coles, should investors take the hint?

These transactions don’t merit too much thought, in my view. Yes, Wesfarmers probably doesn’t see too much meaningful growth in Coles’ future. But that’s understandable, seeing as Coles is a very mature business with almost complete market saturation.

It was also an easy avenue for Wesfarmers to raise cash, seeing as the Coles share price held up extraordinarily well in the market crash we saw in March. And Wesfarmers is the kind of company that’s always looking for new pathways to invest down.

Are Coles shares a buy right now?

So here’s how I see Coles shares today: a defensive, mature company with a reasonably safe dividend. Nothing more, nothing less.

For investors who prioritise ASX dividend income, Coles remains a great option in my view. On current prices, Coles shares are offering a 2.78% dividend yield, which comes with full franking credits (giving it a grossed-up yield of 3.97%). If you identify with these goals, the Coles share price is in the buy zone right now, in my view.

But if you’re looking to substantially grow your wealth over years or even decades, Coles is probably not the best bet to make. There are a plethora of ASX shares out there that offer better growth prospects, so perhaps your cash is better served in something else.

More reading

• Will the Wesfarmers share price climb higher in 2020?
• 3 ASX blue chip shares to put into your retirement portfolio
• 3 ASX shares Warren Buffett couldn’t ignore today
• 1 key trait to look for with most top ASX growth shares
• 3 quality ASX dividend shares for income investors to buy today

Motley Fool contributor Sebastian Bowen 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.

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The Over the Wire Holdings Ltd (ASX: OTW) share price is charging higher today on the back of a business update and new strategic partnership.

Over the Wire is a telecommunications, cloud and IT solutions provider that specialises in converged voice and data networks, data centres, and hosted infrastructure solutions for corporate clients.

The company owns a carrier-level network with points of presence in all major Australian capital cities and Auckland, New Zealand.

What did Over the Wire announce?

This morning, the company revealed that the current pandemic and associated restrictions have generated strong demand for its voice offering, resulting in higher volumes. This increase in voice volumes has positively offset the delay in some data services due to customer site access restrictions during lockdown.

What’s more, Over the Wire’s exposure to customers in the hardest-hit industries of retail, hospitality and travel is limited, with those most affected representing less than 3% of its recurring base.

While COVID-19 has affected its non-recurring business, recent orders from customers indicate the company is now likely to deliver more than 70% of its non-recurring revenue forecast.

On the whole, Over the Wire noted that it continues to generate positive operational cash flow, maintains a strong balance sheet, and its recurring business is in line with expectations.

The company remains confident of being within 3% of consensus, which comprises revenue of $90.4 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $17.4 million.

Commenting on business performance, managing director Michael Omeros said:

“Although the COVID-19 pandemic has created uncertainty and challenging market conditions our team has shown focus and resilience which should be commended. We are satisfied with how the business is currently tracking and confident about achieving positive growth into next financial year.”

Partnership with NEXTDC Ltd (ASX: NXT)

On top of the business update, Over the Wire also announced a strategic partnership with S&P/ASX 200 Index (ASX: XJO) share NEXTDC. Over the Wire will migrate core elements of its network and private cloud infrastructure into NEXTDC’s tier 4 facilities.

Over the Wire described this partnership as a “foundational building block” that will bring its network closer to many of the world’s leading cloud providers and cloud on-ramp services. Additionally, the partnership will allow Over the Wire to further develop its multi-cloud strategy in conjunction with its current private cloud offering.

“NEXTDC forms an integral part of our multi-cloud strategy and we are excited to be on the journey with NEXTDC, as they continue to build out next generation data centres that are enabling the growth of the digital economy,” said Mr Omeros.

At the time of writing, the Over the Wire share price is sitting 6.35% higher at $3.18 after soaring as much as 10.7% at around midday. Like most small-cap ASX growth shares, Over the Wire shares took a tumble in the wake of COVID-19 and are currently down 30% year to date.

More reading

• 3 fantastic ASX growth shares I would buy and hold for decades
• New to investing? Put $500 into these top ASX 200 shares
• Where to invest $5,000 in ASX growth shares today
• Where to invest $20,000 into ASX shares right now
• 3 explosive ASX growth shares to buy

Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Over The Wire Holdings Ltd. The Motley Fool Australia has recommended Over The Wire Holdings 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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Australia’s top brokers have been busy adjusting their estimates and recommendations again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX 200 shares are in the buy zone:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of UBS, its analysts have retained their buy rating and NZ$22.00 (A$20.55) price target on this fresh milk and infant formula company’s shares. Although the broker suspects that market share gains have slowed, it remains confident that a2 Milk Company is on course to deliver a strong result in FY 2020. In addition to this, UBS isn’t concerned by the recent launch of a2-only products from rivals such as Bellamy’s. It believes a2 Milk Company’s strong brand loyalty will help it fend off the competition. I agree with UBS and believe a2 Milk Company would be a great option for investors.

Nearmap Ltd (ASX: NEA)

Analysts at Goldman Sachs have retained their buy rating and lifted the price target on this aerial imagery technology and location data company’s shares to $2.55. According to the note, the broker was pleased with Nearmap’s market update on Thursday. It is performing better than it expected, which has led to Goldman increasing its forecasts. The broker is now forecasting its annualised contract value growing by a compound annual growth rate of 18% between FY 2019 and FY 2022. The broker also notes that Nearmap has a $2.9 billion opportunity in its current markets, which is materially more than its estimate for revenue of $130 million in FY 2022. I agree with Goldman Sachs and feel Nearmap could be a great long term option.

Telstra Corporation Ltd (ASX: TLS)

A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating but trimmed the price target on this telco giant’s shares slightly to $3.90. The broker has reduced its earnings estimates slightly to account for negative impacts of the pandemic. Nevertheless, Macquarie believes Telstra will continue to generate sufficient cash flow to maintain its 16 cents per share dividend over the coming years. This equates to a fully franked 4.9% dividend yield. I think Macquarie is spot on and Telstra remains a great option for investors. Especially those in search of income.

More reading

• Ready to invest your first $1,000? Try these 2 ASX shares
• Should you worry about geopolitical events in investing?
• 3 cheap ASX 200 shares I’d buy today
• ASX 200 down 1.2%: Westpac tumbles, Appen reaffirms guidance, Costa CEO to retire
• Will the Wesfarmers share price climb higher in 2020?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. and Telstra Limited. The Motley Fool Australia owns shares of 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.

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is being weighed down by profit taking in the banking sector. At the time of writing the benchmark index is down 1% to 5,792.5 points.

Four shares which have not let that hold them back are listed below. Here’s why they are charging higher:

The Afterpay Ltd (ASX: APT) share price is up almost 2.5% to $47.15. Investors appear to be taking advantage of a pullback in the payments company’s share price on Thursday to top up their positions. Profit taking led to Afterpay’s shares sliding around 7% yesterday.

The Austal Limited (ASX: ASB) share price is up over 5% to $3.20 after upgrading its revenue and earnings guidance. This morning the shipbuilder advised that its FY 2020 revenue will hit ~$2 billion, while its earnings before interest and tax (EBIT) will be “no less than $125 million”. As a comparison, the company was previously expecting revenue of at least $1.9 billion and EBIT of no less than $110 million.

The Kogan.com Ltd (ASX: KGN) share price has jumped 7% to a record high of $11.32. This is despite there being no news out of the ecommerce company on Friday. However, its shares have been on a tear this month after it revealed very strong sales and profit growth during the pandemic. Investors appear optimistic that the crisis has accelerated the structural shift to online shopping.

The Northern Star Resources Ltd (ASX: NST) share price has surged 7.5% higher to $14.78. Investors have been buying the gold miners today after the price of the precious metal rebounded overnight. This was driven by escalating tensions between the United States and China. It isn’t just Northern Star rising strongly. The S&P/ASX All Ordinaries Gold index is up a solid 3.2% at the time of writing.

More reading

• ASX 200 down 1.2%: Westpac tumbles, Appen reaffirms guidance, Costa CEO to retire
• The best performing ASX 200 stock today may have more room to climb
• 10 quality ASX shares to buy in June
• 5 things to watch on the ASX 200 on Friday
• 4 ASX fintech shares to make you rich

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 Austal Limited. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of AFTERPAY T 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.

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Investing your first $1,000 into the share market is a very exciting event in anyone’s life. But it can also be nerve-racking. Where to put it? There are literally thousands of investments to choose from, just on the ASX alone.

That’s why I’ve found 2 ASX shares that I would be very happy to recommend to a beginner with their first $1,000 to spend. Both shares can be bought and held with very little active management or effort, which I think is a perfect arrangement for anyone wanting to dip their toes into ASX shares for the first time.

Magellan High Conviction Trust (ASX: MHH)

This share is actually a listed investment trust (LIT), which is a collection of underlying shares that is managed on investors’ behalf. In this way, I think it’s a great option for a beginner’s first $1,000 investment. Magellan High Conviction Trust aims to amass a concentrated portfolio of 8–12 of the shares that Magellan’s management team views as the ‘best in the world’. These currently include well-known names like Google-owner Alphabet, Microsoft, Visa and Alibaba.

These companies are world-class and have a truly global presence. As such, I think this is a great investment for your first $1,000 – or for any investor, in truth. MHH also aims to pay out a 3% cash distribution each year, which can either be taken in cash as some passive income, or else re-invested for a discount.

VanEck Australian Equal Weight ETF (ASX: MVW)

One of the criticisms I hear most of your typical S&P/ASX 200 Index (ASX: XJO) exchange-traded funds (ETFs) is regarding their high concentration towards ASX banks and miners.

Whilst this is true of a conventional ASX 200 ETF, this fund from VanEck operates a little differently. That’s because it assigns each company in the ASX 200 an equal investment, rather than giving larger companies a bigger slice of the pie. As such, your larger shares like Commonwealth Bank of Australia (ASX: CBA) get the same slice of this ETF as your smaller companies like WiseTech Global Ltd (ASX: WTC).

Since this ETF’s inception in 2014, it has comfortably outperformed the ASX 200 index, so that’s enough validation for your first $1,000 investment in itself, in my view.

As such, I think this equal-weighted ETF is a great choice for any beginner investor, who wants an equally cut ‘slice of Australia’. Again, it’s managed entirely on your behalf – meaning you can just ‘set and forget’ it if you so wish.

More reading

• 3 cheap ASX 200 shares I’d buy today
• ASX 200 down 1.2%: Westpac tumbles, Appen reaffirms guidance, Costa CEO to retire
• Will the Wesfarmers share price climb higher in 2020?
• 2 ASX 200 tech shares I’d like to buy today
• Why I think the CSL share price is a strong buy today

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Magellan High Conviction Trust, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares) and Visa. The Motley Fool Australia owns shares of WiseTech Global. The Motley Fool Australia has recommended Alphabet (A shares). 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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Investors in the share market can be sent into a flurry of worry by geopolitical events. Should you worry about them when it comes to investing?

There is growing concern about what’s happening with the two superpowers of the world, China and the US.

Western countries aren’t happy with how things are going in Hong Kong with a new security law passed by China. The Chinese don’t like that Australia was pushing for an inquiry into the coronavirus. The US election could turn out to be a real mess with how things are going with the ongoing spread of the coronavirus.

Geopolitical events can cause big shudders in the share market. Just look what happened during the trade war. Each tweet from President Trump caused the market to react negatively or positively.

Keep geopolitical events in mind

I do think it’s important to be aware of what’s going on. Sometimes an event can cause the earnings and valuation of shares to move dramatically higher or lower. Look what happened with Bellamy’s. Look how changing oil prices have an obvious huge effect on shares like Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (ASX: STO).

Politics can have a big effect on returns. The decisions about the NBN were decided by politicians and this has had a huge effect on Telstra Corporation Ltd (ASX: TLS).

But don’t give it too much weight

We also need to keep in mind that geopolitical events will keep happening. There probably isn’t going to be a time when we all agree with what the leaders of Australia, the US, China are all doing. 

Geopolitical events have been happening for many centuries. We should expect that things will keep changing. There wouldn’t be any share market volatility if there were no surprises.  

The share market reached an all time high in February 2020 despite all previous (and ongoing) problems. As investors we need to stay optimistic for the long-term or else we’ll end up missing out on gains.

More reading

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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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