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Zoom: Work from Home is Here to Stay, But This Analyst Says Hold Off
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2 five star ASX healthcare shares to buy in July
The ASX healthcare sector is definitely one of my favourite share market sectors. The demand for healthcare products and services, both locally and internationally only continues to grow. Demand is being driven by an ageing global population and continuing advances in healthcare treatments and supporting technologies.
Here we examine 2 of my top ASX healthcare shares picks right now: ResMed Inc (ASX: RMD) and Ramsay Health Care Limited (ASX: RHC).
ResMed
ResMed has evolved over the last 30 years to become one of the world’s leading sleep treatment companies. The company’s healthcare devices target sleep apnoea and other respiratory conditions.
ResMed has been one of the star performers on the ASX over the past decade. Since the beginning of 2012, the ResMed share price has risen more than 10-fold from $2.49 to now be trading at around $29. More recently, over the past 12 months, the ResMed share price has continued to perform strongly, increasing by 64%.
ResMed continues to perform well financially and recorded a very strong 47% increase in non-GAAP net income during the third quarter of FY 2020.
I remain confident that the strong demand for ResMed’s products will continue over the next decade. Demand will be driven by the growing need for sleep apnoea treatments. It is estimated that around 1 billion worldwide are impacted by sleep apnoea.
Ramsay Health Care
Another ASX healthcare share on my buy list right now is Ramsay Health Care. Ramsay has evolved over the past few decades, from a small Australian hospital operator, to now become Australia’s largest private healthcare provider.
The company has been impacted by the ban on non-essential surgeries during the coronavirus pandemic. However, elective surgeries are now recommencing in a number of the 11 countries in which it operates.
Ramsay managed to successfully sign a number of key government deals recently in Australia and the United Kingdom. These will help to support its hospitals during the further challenges it will face during the pandemic.
I remain optimistic about Ramsay’s long term future. The demand for high quality hospitals will only increase over the next decade.
With a fall in the Ramsay Health Care share price since the beginning of the pandemic, I believe now could be a good buying opportunity for patient long term investors.
Foolish Takeaway
Both ResMed and Ramsay are 2 quality ASX healthcare shares that are in my buy zone right now. Both companies have entrenched market positions and a growing international presence. The high demand for their products and services is only likely to increase over the next decade.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
More reading
- ResMed share price rockets to record highs
- My top 5 ASX growth shares to buy in FY 2021
- Want to beat the market? Try these 3 ASX growth shares
- How to get rich by investing in small cap ASX shares
- Invest like Warren Buffett and buy and hold these excellent ASX shares
Motley Fool contributor Phil Harpur owns shares of ResMed Inc. The Motley Fool Australia has recommended Ramsay Health Care 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.
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Kanye West – ASX shares for his US presidential campaign
Kanye West launched his campaign tour for the United States presidential election last weekend. ASX investors may ask themselves why this relevant to their stock portfolios. I believe that there are two main reasons:
- US presidential election years always have a big impact on the stock market, both in the US and abroad. This is true both in the lead up to the election and also in the following years, as either side seeks to implement their philosophies and policies.
- Kanye West may or may not be who you think should be president, but his commercial success (and that of his wife Kim Kardashian-West) is undeniable. Two keys to Kanye’s success have been his marketing prowess and his ability to form strategic partnerships.
2 ASX shares for Kanye West’s US presidential campaign
I have selected the first ASX share because I believe that it could likely see increased volatility during the US presidential election. This could present a nice entry point for patient investors to acquire this quality ETF at a discount. The second share is a great example of how businesses can use partnerships and a strong brand to rapidly grow both locally and internationally.
Betashares NASDAQ 100 ETF (ASX: NDQ) – US tech behemoths
Betashares NDQ aims to track the performance of the NASDAQ-100 Index (before fees and expenses). The NASDAQ-100 comprises 100 of the largest, non-financial companies listed on the NASDAQ market, and includes many companies that are at the forefront of the new economy.
Surprisingly, given the current circumstances, the NASDAQ is actually up nearly 22% for the year, driven higher by the surging FAANG stocks. With prices and some valuations higher than before COVID-19, news coming out of the US presidential election could cause this ETF to be more volatile than normal. That could present buying opportunities for long-term investors.
Afterpay Ltd (ASX: APT) – Partner now, profit later
Afterpay is a true Australian success story. The buy now, pay later company has been one of the top performing ASX shares of recent years, surging from $2.95 in June 2017 to $72.42 at the time of writing. That is an incredible 25 fold increase in the Afterpay share price and the company now boasts a market capitalisation of over $20 billion!
Similar to Kanye West’s partnership with Adidas, this ASX share has had a lot of success partnering with bigger, more established networks recently. The company initially targeted larger Australian and then international retail brands, which has proven a successful strategy. Now, as Afterpay gains popularity and looks to broaden its reach, it has reached agreements with the likes of Apple Inc (NASDAQ: AAPL), Alphabet Inc (NASDAQ: GOOG) and Visa (NYSE: V). Although these partners may have considerable negotiating leverage, they also vastly increase Afterpay’s reach and potential upside.
Foolish bottom line
As an investor in ASX shares, it is worth paying attention to significant international news like the US presidential election. Both Afterpay and Betashares NASDAQ 100 ETF could be impacted by the election and news such as Kanye West commencing his campaign.
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
*Extreme Opportunities returns as of June 5th 2020
More reading
- ASX 200 drops 1.1%: Big four banks fall, Resolute rockets, Afterpay tumbles
- Why Afterpay, BHP, Cann, & Mesoblast shares are tumbling lower
- Are you ready to invest in ASX shares?
- Should you buy ASX retail shares in July?
- Apple Plans to Be 100% Carbon Neutral by 2030
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Lloyd Prout 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 Alphabet (C shares), Apple, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Alphabet (C shares), Apple, and BETANASDAQ ETF UNITS. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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Stimulus Should Keep Boeing Afloat, But This 5-Star Analyst Remains Sidelined
Just when you thought things could not get any worse for A&D giant Boeing (BA), more dispiriting news gets revealed.Last week, Boeing reported that another 60 MAX 737 orders were cancelled in June, bringing the yearly cancellation total to 373. Boeing has an additional 439 orders that are currently considered at risk.All in all, in the second quarter, Boeing delivered just 20 commercial aircrafts. While only 10 orders left the warehouse in June, the figure is still an improvement on the 4 delivered in May.Boeing will report 2Q20 results on July 29, and ahead of the print, Canaccord’s 5-star analyst Ken Herbert consoles investors by stating the second quarter could be the low point for commercial orders and deliveries.“We believe Q2 will be the trough for deliveries, but the pace of recovery now appears to be more muted than hoped for just a few months ago… Considering the importance of the MAX to BA’s FCF, we believe sentiment on the stock will be bracketed between an accommodating monetary policy, which will limit the downside, and soft fundamentals (MAX orders and deliveries), which will limit the upside. We see incremental risk to the MAX backlog and delivery schedule,” Herbert explained.The MAX cancellations are unfortunate for Boeing, as they come at a time when the long-troubled airliner is on the cusp of returning to service. After two fatal accidents left it grounded since March 2019, re-certification is likely to be granted in September, with deliveries starting in late-3Q20. But the question is who will be taking any deliveries now that global air travel is almost nonexistent?On the plus side, looking ahead, Herbert believes the “unprecedented level of monetary stimulus in the US” should provide enough support for now. However, given the current macro climate, the 5-star analyst warns “there is more fundamental downside for BA than is currently reflected in estimates.”Accordingly, Herbert reiterated a Hold rating on Boeing along with a $155 price target. The figure implies possible downside of 13% in the year ahead. (To watch Herbert’s track record, click here)Looking at the consensus breakdown, 7 Buys and Holds, each, and an additional 3 Sells add up to a Hold consensus rating. The average price target is more optimistic than Herbert’s, and at $188.73, there’s potential upside of 6% over the next 12 months. (See Boeing stock-price forecast on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. More recent articles from Smarter Analyst: * Zoom: Work from Home is Here to Stay, But This Analyst Says Hold Off * Adobe, IBM Partner On Hybrid Cloud For Banking, Healthcare Industries * Logitech Ramps Up Annual Profit Outlook As Q1 Income Leaps 75% * Amazon Officially Confirms Its Prime Day Will Be Postponed
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De Grey share price rising following mine extensions
The De Grey Mining Limited (ASX: DEG) share price is currently up 4.1% following news the company’s Hemi project has grown with its new Aquila extensions. This is good news for the company that has seen a recent slump in its share price thanks to the issue of new shares at prices of 28 cents and lower. The De Grey share price is currently trading at 75 cents.
What Happened?
De Grey announced that the Hemi project scale has grown with the new Aquila extensions. Aquila extensional drilling has continued after promising results were found at Hemi. The mine continues to find high grade mineralisation gold at various depths with gold found as deep as 350 vertical metres below surface. The finds indicate the potential for new gold zones between the Aquila and Brolga sites. Some of the highlights from the release are as follows:
- 39m @ 3.2g/t Au from 180m in HERC097D including 17.6m @ 4.6g/t from 195.7
- 31.8m @ 2.0g/t Au from 180m in HERC094D including 10.3m @ 3.2g/t from 180.4m
- 23m @ 2.0g/t Au from 246m in HERC100D including 0.7m @ 41.4g/t from 246.9m
- 33m @ 1.1g/t Au from 151m in HERC082D
De Grey Technical Director, Andy Beckwith, noted: “Aquila continues to grow as we extend drilling laterally and at depth. Mineralisation remains open in all directions with limits yet to be defined. The new aircore drilling to the west of Aquila has now extended the overall strike potential to 1.6km.”
What now for the De Grey share price?
The De Grey share price has been on a miserable run since it rocketed more than 107% in June. It is now down around 20% in July. However it is still likely to benefit from the rising gold prices, with gold recently flirting with its nine year high. Furthermore, the company is well backed by fund managers like John Forward, who have made impressive returns with the share price rising about 1400% this year.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
More reading
- Azure Minerals share price rockets 24% on acquisition news
- Why De Grey, Openpay, Woodside, & Zip shares are dropping lower
- De Grey Mining share price plunges another 13% lower today
- Why the De Grey share price rocketed more than 107% in June
- De Grey Mining share price plunges 5% despite announcing “excellent” gold recoveries
Motley Fool contributor Daniel Ewing 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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Microsoft Q4 Earnings Preview: Azure Key To Growth
Microsoft Corporation (NASDAQ: MSFT) is poised to report strong fourth-earnings Wednesday, according to tech analysts.Wedbush's Daniel Ives maintained an Outperform rating on Microsoft with a $260 price target, while Jefferies' Brent Thill maintained a Buy rating and raised the price target from $200 to $240.Azure Key To Microsoft's Results: During the June quarter, there was "robust cloud deal activity" around Microsoft's Azure, Ives said in a Monday note.The work from home environment created by COVID-19 is "is further catalyzing more enterprises to make the strategic cloud shift with Microsoft across the board," the analyst said.Some firms are accelerating their partnerships with Microsoft by six to 12 months, he said. "Azure's cloud momentum is still in its early days," and Microsoft "is the core cloud name" in the trend of cloud deployments, Ives said. View more earnings on MSFTThe number of workloads in the cloud could rise from 33% today to 55% by 2022, the analyst said, with work-from-home potentially accelerating the trend by a year. Microsoft could be a major beneficiary, he said. Aside from Azure, the Office 365 transition in the consumer and enterprise segments is providing additional growth tailwinds for Microsoft, according to Wedbush. Microsoft "is one of the best pillars in software," Thill said in a Sunday note.Microsoft will deliver strong fourth-quarter results and Azure will "continue to perform strongly," the analyst said. Jefferies also noted the increased cloud computing shift, and Thill said video games and Microsoft Office are two other potential strength areas.The analyst named three potential pitfalls for Redmond: * High expectations. Microsoft stock has "moved 13% since the day following its last earnings report and is now up close to 29% YTD vs the IGV's 23%," he said. * Risk to the on-premise service business. Guidance and Azure "could mitigate this," Thill said. * Potential noise in coronavirus-impacted segments. They include Search, Dynamics and LinkedIn. Microsoft shares were down 1.35% at $208.75 at the close Tuesday.Latest Ratings for MSFT DateFirmActionFromTo Jul 2020Raymond JamesMaintainsStrong Buy Jul 2020JefferiesMaintainsBuy Jul 2020BarclaysMaintainsOverweight View More Analyst Ratings for MSFT View the Latest Analyst RatingsSee more from Benzinga * 2 Analysts On Why Disney, Roku Are Streaming Stock Alternatives To Netflix * Nvidia Analyst Says AI Is Fueling Data Center Growth * Morgan Stanley Says Edwards Lifesciences Settlement With Abbott An 'Expensive Positive'(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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ASX 200 drops 1.1%: Big four banks fall, Resolute rockets, Afterpay tumbles
At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) has given back a good portion of yesterday’s gains. The benchmark index is currently down 1.1% to 6,085.9 points.
Here’s what has been happening on the market today:
Big four banks drop lower.
The big four banks have all dropped lower on Wednesday and are weighing on the ASX 200 index. The worst performer in the group has been the National Australia Bank Ltd (ASX: NAB) share price with a 1% decline. The Commonwealth Bank of Australia (ASX: CBA) share price isn’t far behind with a 0.9% decline.
Resolute impresses.
The Resolute Mining Limited (ASX: RSG) share price is zooming higher today after the release of its second quarter update. For the quarter ending 30 June 2020, Resolute achieved gold production of 107,183 ounces at an all-in sustaining cost (AISC) of US$1,033 an ounce. This puts it on course to achieve its FY 2020 guidance of 430,000 ounces at an AISC of US$980 an ounce. The company also revealed an average realised price of US$1,446 an ounce for the period.
Tech shares come under pressure.
After rocketing higher on Tuesday, the tech sector has run out of steam today. The likes of Afterpay Ltd (ASX: APT) and WiseTech Global Ltd (ASX: WTC) are dropping lower in response to an overnight pullback on the tech-heavy Nasdaq index. At the time of writing the S&P/ASX 200 Information Technology index is down a sizeable 2.4%.
Best and worst ASX 200 shares.
The best performer on the ASX 200 on Wednesday has been the Resolute Mining share price. The gold miner’s shares are leading the way with a 10% gain following its Q2 update. The worst performer on the index has been the Mesoblast limited (ASX: MSB) share price with a 7.5% decline. This appears to be down to profit taking after some strong gains on Tuesday following a positive announcement.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
More reading
- Kanye West – ASX shares for his US presidential campaign
- Why Afterpay, BHP, Cann, & Mesoblast shares are tumbling lower
- Are you ready to invest in ASX shares?
- Should you buy ASX retail shares in July?
- Why Mesoblast might be the best ASX healthcare growth share to own right now
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and WiseTech Global. 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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Audinate shares in trading halt, capital raising announced
Audinate Group Ltd (ASX: AD8) shares are in a trading halt this morning after the media technology company announced a $40 million equity raising. Funds are earmarked to accelerate growth and strengthen the company’s balance sheet. The additional capital will also provide flexibility to pursue acquisitions that complement Audinate’s medium-term objectives.
What does Audinate do?
Audinate is a leading provider of professional digital audio networking technologies. The company’s Dante platform distributes audio signals over computer networks, with networked digital capability replacing analog cabling. Software based audio-visual (AV) systems are replacing hardware systems, transforming the AV industry. Dante is an ‘AV Application Stack’ comprising software, hardware, and products such as microphones, speakers, and cameras. Audinate’s technology has been used by Sydney Trains, The Super Bowl, and Wembley Stadium.
What are the details of the capital raising?
Audinate is seeking to raise $28 million via a placement to institutional and sophisticated investors at $5.15 per share. This will result in the issue of around 5.4 million new shares representing approximately 8% of Audinate’s existing issued share capital. The placement price of $5.15 represents a 9.5% discount to the last traded price.
A share purchase plan is being offered to raise up to an additional $12 million. Funds will be used to accelerate growth opportunities, strengthen Audinate’s leadership position in the AV industry, and develop its video capabilities. Audinate will increase investment in engineering, R&D capabilities, and business infrastructure as well as accelerating investment in additional video and software products. The funds will also shore up the balance sheet in the uncertain COVID-19 period and provide flexibility to pursue potential M&A opportunities.
How has the Audinate share price been performing?
The Audinate share price dropped to a low of $2.51 in March. It has, however, since gained 127% and was trading at $5.69 before the trading halt was called. Despite the recovery in the Audinate share price since March, it is still well below its 2020 high of $9. Over the 12 months to 30 June, Audinate reported unaudited revenue of US$20.4 million. Cash on hand at 30 June was A$29.3 million.
Audinate CEO, Aidan Williams, commented “Whilst we have faced headwinds associated with COVID-19 and recovery timing is uncertain, our confidence in the strength of our technology and business model remains high. Delivering our medium-term strategic priorities will ensure that Audinate is well placed to benefit from economic recovery as it occurs in our markets around the world.”
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- Afterpay and 1 other ASX tech share to buy and hold beyond 2030
- Why Audinate, Breville, Zip Co, & Zoono shares are sinking lower today
- Audinate share price sinks on trading update
- 3 quality ASX shares to buy right now with $3,000
- Are these small cap ASX tech shares future stars?
Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO. The Motley Fool Australia has recommended AUDINATEGL 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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Why Afterpay, BHP, Cann, & Mesoblast shares are tumbling lower
The S&P/ASX 200 Index (ASX: XJO) has run out of steam on Wednesday and is dropping lower. In late morning trade the benchmark index is down a sizeable 0.9% to 6,099.5 points.
Four shares that have fallen more than most today are listed below. Here’s why they are tumbling lower:
The Afterpay Ltd (ASX: APT) share price is down 3.5% to $72.44. Investors appear to be taking profit after the payments company’s shares raced higher on Tuesday following a strong day for tech shares. Afterpay isn’t the only tech share tumbling lower today. At the time of writing, the S&P/ASX 200 Information Technology index is down 2.5%.
The BHP Group Ltd (ASX: BHP) share price has fallen 2.5% to $37.81. Investors may be selling the mining giant’s shares today after they were downgraded by analysts at Citi. According to the note, the broker has downgraded BHP’s shares to a neutral rating with a $40.00 price target. Citi appears a little underwhelmed with the company’s production guidance for FY 2021 and has revised its earnings estimates to reflect this.
The Cann Group Ltd (ASX: CAN) share price is down 5% to 62.5 cents. This morning the cannabis company released an update on its share purchase plan. It confirmed that it is seeking to raise up to $10 million at a price of 40 cents per share. This represents a massive discount of 51.2% to the last closing price prior to the announcement of its placement.
The Mesoblast limited (ASX: MSB) share price is down 6.5% to $3.46. This appears to have been driven by profit taking after a strong gain on Tuesday. Investors were buying the biotech company’s shares following the announcement of a review date for its remestemcel-L treatment by the U.S. FDA. The review will assess data supporting Mesoblast’s application for approval for remestemcel-L in the treatment of steroid-refractory acute graft versus host disease in children.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- Are you ready to invest in ASX shares?
- Why Mesoblast might be the best ASX healthcare growth share to own right now
- Are ASX 200 shares overvalued right now?
- 5 things to watch on the ASX 200 on Wednesday
- ASX 200 jumps 2.6% on vaccine hopes and jobkeeper
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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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Are you ready to invest in ASX shares?
Investing in ASX shares as a first-timer is exciting. You can finally put some hard-earned cash to work and start building your financial future.
ASIC recently reported a noticeable increase in trading from everyday investors like you and me in the March bear market. That’s great news as more people are gaining an interest in the Aussie share market.
However, investing is not for everyone. How, where and when you invest will vary depending on your age, net worth, future plans and many other factors.
Here’s a quick guide to check whether you’re ready to invest in ASX shares in 2020.
Pay off your debts
It’s easy to get ahead of yourself when looking to invest in ASX shares. However, paying off personal and unproductive debt like credit cards or auto loans is often a better use of money.
Credit card interest rates can be in excess of 20% per annum. You’re unlikely to generate that sort of return consistently with ASX shares.
Paying off expensive, interest-accruing debts means less obligations to the banks. This will generally mean less stress and more freedom to invest in ASX shares as you like.
Build up an emergency fund
One thing that people are feeling right now is FOMO. The S&P/ASX 200 Index (ASX: XJO) has climbed around 34% higher since 23 March.
That means many first time investors are worried they’re missing out on potential gains. But as a long-term investor, you don’t want to be forced to sell.
It’s a wise move to build up an emergency fund of 3-12 months worth of living expenses, depending on your circumstances. Having this liquid (i.e. cash) emergency fund means you can invest in ASX shares knowing you can handle the odd unexpected expense.
There’s nothing worse than buying a hot stock like Afterpay Ltd (ASX: APT) and being forced to sell at a bad time because of liquidity issues.
Buy your favourite ASX shares!
Once you’re debt-free and have a decent emergency fund, it’s time to look at the markets.
If you’re a first-timer, I think diversification is key. You want to spread your portfolio risk across a number of ASX shares, to begin with.
That could mean a low cost, diversified exchange-traded fund (ETF) like BetaShares Australia 200 ETF (ASX: A200) could be a good option.
The fund has a management fee of just 0.07% per annum and attempts to track the benchmark index.
If you’re after more concentrated positions, blue-chip shares like BHP Group Ltd (ASX: BHP) or Commonwealth Bank of Australia (ASX: CBA) have historically been portfolio staples.
Foolish takeaway
While it’s easy to get excited as a first-time investor, it’s best to take a step back and breathe.
The share market will still be there in a few months’ time. There will still be good ASX shares to buy.
By paying down your debts and building up an emergency fund, you will be able to confidently invest in your favourite companies knowing that you’re well set up for the future.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- Why Afterpay, BHP, Cann, & Mesoblast shares are tumbling lower
- Should you buy ASX retail shares in July?
- Are ASX 200 shares overvalued right now?
- Is the Brambles share price a hidden buy?
- Is the Tassal share price a potential outperformer?
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