The InvoCare Limited (ASX:IVC) share price has continued its recent upward trend this morning and is trading for $11.17, driven higher by the widespread gains of the S&P/ASX200 Index (ASX:XJO) more broadly.

At the time of writing, the funeral home operator is trading at a 25% discount compared to its pre-COVID-19 highs of $14.92 earlier this year.

Although some investors may view the funerals industry as a controversial addition to their portfolio, here are 3 reasons I believe the current InvoCare share price has significant potential to outperform in the medium to long-term:

Successful capital raising

On 14 April, InvoCare announced it would tap institutional investors for $150 million total equity in the company at a price of $10.40 per share. The company cited that the raising would “provide enhanced support for its growth initiatives and further strengthen its balance sheet.”

The next day, however, the company revealed that over-subscription of the placement by investors had prompted its expansion to $200 million. This 25% enlargement suggests that there was significant demand for InvoCare shares and may be considered a positive indication that investors see sizeable growth opportunities for the company moving forward.

Track record of strong financial performance

The widespread impacts of COVID-19 will inevitably disrupt the short-term business operations of companies such as InvoCare. Despite this, the company’s track-record of stellar financial performance should provide investors with optimism that it will survive the challenging contemporary economic environment.

In its FY19 annual report to shareholders, InvoCare saw sales revenue rise by 3.5% to approximately $490 million, operating earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 21.4%, and net profits substantially increased by a whopping 54% relative to FY18. These figures were accompanied by a fully franked dividend of 41 cents per share, thus representing an annual dividend yield of 2.9%.

Lastly, InvoCare’s FY19 report discussed the acquisition of several regional funeral facilities as part of its overall growth strategy, including the purchase of Heritage Funerals (QLD) and Batemans Bay & Moruya District Funerals (NSW). These businesses will likely add to the 30% of existing market share that InvoCare currently holds in the funeral home industry.

This robust financial performance in FY19, combined with InvoCare’s fruitful acquisitions strategy, provide considerable opportunities for investors to benefit from the long-term earnings growth and profitability of the company.

Ageing population

According to the Australian Institute of Health and Welfare, 15% of the Australian population was included in the 65 and over category as of 2017, with this proportion of older demographics expected to inflate to 8.7 million people (22%) by 2056. If this projection is accurate, InvoCare appears well-placed to benefit from an ageing population. In the FY19 annual report, InvoCare CEO Martin Earp summarised this current demographic trend by stating:

The populations in our core geographical markets of Australia, New Zealand and Singapore are growing and ageing, with the first wave of the so-called baby boomer generation now impacting on anticipated death volumes. This positive demand profile is forecast to continue for at least two more decades.

To effectively meet this additional demand for funeral services, the company has embarked on a $200 million refurbishment program known as ‘Protect & Grow’. As of April 2020, 106 locations had undergone various improvements, and a further 74 sites are expected to benefit from renovations in FY20. Of particular interest, the Protect & Grow venture has seen mixed responses from shareholders, perhaps owing to their concerns that the up-front debt is weighing down the company balance sheet. This has arguably kept the share price lower in recent months.

However, I believe that this investment in the company’s infrastructure should be viewed positively by investors. InvoCare has recognised the long-term demand opportunities an ageing population provides, and is adapting accordingly to distribute the ensuing profitability of this demographic shift to its shareholders.

Foolish takeaway  

Fresh off its over-subscribed capital raise, I believe InvoCare is well-placed to emerge from the COVID-19 pandemic in a position of strength. The company has a significant portion of market share in a growing industry and has demonstrated a desire to further expand in the coming years through acquisitions and internal investment via the Protect & Grow strategy.

Although this company may be a buy-and-hold for the medium to long-term, I believe there is significant upside for prospective investors to include InvoCare shares in their portfolio.

More reading

• ASX 200 down 0.2%: Big four banks lower and TPG announces demerger plans
• Positive signs for Australia’s jobs market as ABS data points to a recovery
• Is the Newcrest Mining share price in the buy zone?
• Are ASX bank shares worth buying despite dividend cuts?
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Toby Thomas owns shares of InvoCare Limited. 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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At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) is off its lows for the day, but still trading slightly lower. The benchmark index is down 0.2% to 5,547.8 points.

Here’s what is happening on the market today:

Big four banks tumble.

The big four banks have given back some of yesterday’s strong gains and are acting as a drag on the ASX 200 on Wednesday. The worst performer in the group today is the Westpac Banking Corp (ASX: WBC) share price with a decline of 0.5%.

Sydney Airport update

The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is trading a fraction higher at lunch after the release of its April update. The airport operator revealed that Domestic passengers fell 97.9% and International passengers fell 96.9% in April. Management warned that the downturn in passenger traffic is expected to persist until government travel restrictions are eased.

TPG share price higher on update.

The TPG Telecom Ltd (ASX: TPM) share price is storming higher today after revealing its future business plans. Following FIRB approval for its merger with Vodafone Australia, the company has revealed that it intends to demerge its Singapore business. It will then be listed on the ASX has a separate entity. TPG also revealed plans to pay a fully franked cash special dividend.

Best and worst ASX 200 performers.

The EML Payments Ltd (ASX: EML) share price is the best performer on the ASX 200 on Wednesday with a 13% gain. This follows the release of a business update this morning which impressed investors. The worst performer is the Unibail-Rodamco-Westfield (ASX: URW) share price with a 5% decline. Investors continue to sell the shopping centre operator’s shares due to the headwinds it is facing from the pandemic.

More reading

• Positive signs for Australia’s jobs market as ABS data points to a recovery
• Why the EML Payments share price is rocketing over 12% higher today
• Why investing in these COVID-19 stricken ASX shares won’t be the same again for a very long time
• Is the Newcrest Mining share price in the buy zone?
• Are ASX bank shares worth buying despite dividend cuts?

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited. The Motley Fool Australia has recommended Emerchants 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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There are some positive signs for Australia’s jobs market as new data from the Australian Bureau of Statistics (ABS) reveals a slowdown in COVID-19 job losses.

The ABS has been collecting payroll and wages data in Australia as part of its effort to shed some light on the impact of COVID-19 on people and businesses across the country.

What the numbers say

According to the ABS, total payroll jobs fell by 7.3% between 14 March 2020 and 2 May 2020. In the same period, total wages paid decreased by 5.4% compared to an 8.2% drop in the ABS’ previous report, largely propped up by the JobKeeper payment. 

According to March unemployment data, some 13 million Australians were employed in mid-March. So, this reported 7.3% fall equates to around 950,000 job losses over the 7-week period.

The hardest-hit states were Victoria and New South Wales, where falls in job numbers were around 8.4% and 7.7%, respectively, over the 7-week period. In terms of wages, Western Australian fared the worst with a 7% fall in total wages, while Victoria wasn’t far behind with a 6.7% decrease.

At an industry level, the accommodation and food services industry had lost around a third of payroll jobs by the week ending 11 April. A subsequent increase in jobs saw this reduce to around 27.1% by the week ending 2 May.

Similar improvement has been seen in the arts and recreation services industry, where a previous fall of 27% is now a (still significant) 19% slump.

Tentative signs of improvement

Commenting on this new data, Bjorn Jarvis, Head of Labour Statistics at the ABS, said: “The latest data shows a further slowing in the fall in COVID-19 job losses between mid-April and early May.”

“The week-to-week changes are much smaller than they were early in the COVID-19 period. The decrease in the number of jobs in the week ending 2 May was 1.1 per cent, which was only slightly larger than the 0.9 per cent increase in the week ending 25 April,” Mr Jarvis added.

What does this mean for ASX shares?

Over this 7-week period, the S&P/ASX 200 Index (ASX: XJO) initially fell to a bottom on 23 March before emerging out of its bear market and marching higher (albeit with many bumps along the way):

The ASX 200 has continued to climb in the interim, just yesterday jumping 1.81% to close at 5,560 points, buoyed by COVID-19 vaccine hopes.

As the economy wakes from hibernation, the effects of COVID-19 and the associated restrictions will begin to emerge through data points like the ones mentioned above. Generally speaking, the share market reflects the conditions of local and global economies – or at least perceived conditions and sentiment – for which employment and wages certainly play a part.

More reading

• ASX 200 down 0.2%: Big four banks lower and TPG announces demerger plans
• Is the Newcrest Mining share price in the buy zone?
• Are ASX bank shares worth buying despite dividend cuts?
• 5 things to watch on the ASX 200 on Wednesday
• Top brokers pick the latest ASX stocks to buy today

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 S&P/ASX 200 Index (ASX: XJO) is on course to end its winning streak on Wednesday. In late morning trade the benchmark index is down 0.3% to 5,543.3 points.

Four shares that are falling more than most today are listed below. Here’s why they are sinking lower:

The AP Eagers Ltd (ASX: APE) share price is down 3% to $5.44. The catalyst for this decline appears to have been a broker note out of Credit Suisse. According to the note, the broker has downgraded AP Eagers’ shares to a neutral rating and cut the price target on them to $6.45. The broker made the move on valuation grounds after a strong recovery in its share price over the last couple of months. It also expects a sharp decline in profits this year.

The Lendlease Group (ASX: LLC) share price has fallen 3.5% to $11.26. This decline also appears to have been driven by a broker note. Although analysts at Ord Minnett have retained their buy rating on the property company’s shares, they have cut their price target down by a third to $14.00. Ord Minnett believes the next 12 months could be difficult, but the longer term looks positive.

The Pushpay Holdings Ltd (ASX: PPH) share price has dropped almost 2.5% to $6.65. This appears to have been driven by profit taking after the donor management platform provider’s shares rocketed to a record high this week. Investors have been buying Pushpay’s shares following the release of a strong full year result earlier this month.

The ResMed Inc. (ASX: RMD) share price is down 2% to $24.84. This follows a similar pullback in the medical device company’s U.S. listed shares overnight. Investors may be concerned that demand for its ventilators will decline if a COVID-19 vaccine is successfully developed in the coming months.

More reading

• Why these ASX shares have just stormed to record highs
• 3 fantastic ASX shares to buy now to get rich later
• 3 ASX 200 healthcare shares I’d buy today
• Where to invest $500 in ASX shares right now
• Will these ASX car dealers bounce back after COVID-19?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended 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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Key ASX shares in the wine and dairy sector could be in the firing line as trade tensions look to escalate between Australia and China. A recent article from Bloomberg reports that China is considering targeting more Australian exports, following calls into an independent inquiry into the coronavirus pandemic.

Here are the latest developments on trade tensions and the key stocks that could be impacted.

Escalating trade tensions

According to the article, China is considering enforcing further trade barriers and tariffs on Australian imports, including wine and dairy products. The article states that Chinese officials have listed potential goods from Australia that could be subject to stricter quality checks and tariffs. It is also possible that China could encourage a consumer boycott of Australian products, however a formal stance has not been acknowledged.  

The speculation of further economic retaliation follows China’s action to block meat imports from 4 Australian slaughterhouses and the enforcement of an 80% tariff on Australian barley on Monday. Calls by the Australian Government for an independent inquiry into the coronavirus pandemic are thought to have fuelled economic retaliation from the Chinese government.

Which ASX shares are in the firing line?

A2 Milk Company Ltd (ASX: A2M) is one of the few shares on the ASX that has managed to withstand the turmoil caused by the coronavirus pandemic. Despite the company’s resilience thus far, sanctions and trade restrictions on its products to China could cause major damage.

The infant formula company relies heavily on consumer demand from China to fuel revenue growth. Currently, a2 Milk reports it has a 6.4% share in the lucrative infant formula market in China and the company recently spent NZ$200 million of its marketing budget on ads in China.

Treasury Wine Estates Ltd (ASX:TWE) is another company with heavy exposure to China. Australia is the 5th largest exporter of wine in the world, with China accounting for the majority of the volume. The operations of Treasury Wine reflects the wine industry’s reliance on China, with the company generating more than 40% of its total profits from Asia. The company’s prestigious and luxury brands, such as Penfolds, are highly popular in the Chinese market and offer better profitability margins.

Foolish takeaway

China is Australia’s most important trading partner – Chinese consumers and businesses are a reliable source of demand for many Australian goods and services. As China emerges from the coronavirus pandemic, demand will play an important role in the recovery of Australia’s economy.

More reading

• 3 stellar ASX growth shares to buy right now
• Where to invest $10,000 into ASX shares
• ASX shares can help millennials retire before their parents
• Are these China-exposed ASX shares in danger in 2020?
• 3 top ASX shares to buy now and hold for 10 years

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates 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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Interest rates are at ultra-low levels and look likely to remain that way for the foreseeable future.

As a result, I continue to believe investors would be better off putting any excess funds into the share market rather than leaving them to gather paltry interest in an account.

But where should you invest these funds? Here are three top shares I would invest $5,000 into right now:

Freedom Foods Group Ltd (ASX: FNP)

I think Freedom Foods could be worth considering for that $5,000 investment. It is a growing diversified food company with a focus on healthy eating trends. The company has been investing heavily in its future growth over the last few years and looks set to reap the rewards in the coming years. Especially given its significant lactoferrin and UHT production capacity and the insatiable demand for these products in Asia. Combined with the rest of its growing business, I believe Freedom Foods is well-positioned to grow its earnings at a strong rate over the next decade.

NEXTDC Ltd (ASX: NXT)

Another share that I would invest $5,000 into is NEXTDC. It is Asia’s most innovative Data Centre-as-a-Service provider and busy building the infrastructure platform for the digital economy. I believe this leaves NEXTDC in a very strong position to benefit from the accelerating adoption of cloud computing. This is because as cloud computing usage increases, demand for its data centre outsourcing solutions and connectivity services is likely to increase along with it. This year the company has seen a big lift in demand. So much so, it recently announced plans to build a new data centre in Sydney.

Pro Medicus Limited (ASX: PME)

Another option to consider investing $5,000 into is Pro Medicus. It is a leading provider of a full range of radiology IT software and services to hospitals, imaging centres, and healthcare groups globally. The key product in its portfolio is Visage 7. Pro Medicus’ Visage 7 technology delivers fast, multi-dimensional images streamed via an intelligent thin-client viewer. It offers users robust clinical capabilities and scales to the needs of massive organisations. Demand has been very strong over recent years, leading to strong sales and profit growth. For example, during the first half of FY 2020, Pro Medicus reported a 32.7% increase in net profit after tax to $12.1 million. Although the pandemic is likely to stifle its growth in the second half, I remain confident that its long-term potential is enormous.

More reading

• These ASX tech shares could be destined for big things thanks to cloud computing
• These ASX 200 shares are up over 40% in 2020
• Why I would buy these exciting ASX growth shares right now
• Why a buy and hold strategy for ASX shares is best
• Should you invest in super or your ASX share portfolio?

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. The Motley Fool Australia has recommended Freedom Foods Group 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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Alternative ASX dividend shares could be a great way to boost your income during these times.

Popular ASX dividend shares like National Australia Bank Ltd (ASX: NAB), Sydney Airport Holdings Pty Ltd (ASX: SYD) and Transurban Group (ASX: TCL) have disappointed shareholders because of the coronavirus.

But alternative ASX dividend shares could be the answer. Here are three very interesting ideas:

Vitalharvest Freehold Trust (ASX: VTH)

This is an agricultural real estate investment trust (REIT) which owns berry and citrus farms in Australia. It earns fixed rental income and variable rental income from Costa Group Holdings Ltd (ASX: CGC), its tenant.

The variable rental income is a share of profit from the farms, which is an interesting time to be able to get some of the profit considering food prices are rising.

Each year Vitalharvest will pay out most (or all) of its net rental profit. The last 12 months amounts to a trailing distribution yield of 6.7%. A solid yield from the alternative ASX dividend share. The last year includes a lot of disruption, so the next 12 months could be materially better.

Duxton Water Ltd (ASX: D2O)

The water entitlement business is definitely one of those investments that could count as an alternative ASX dividend share. It’s the only share on the ASX that purely owns water entitlements.

It leases the water to farmers to ensure they get the water they need for their operations. Some of it is leased with multi-year leases, which locks in attractive water income for Duxton Water, providing good visibility.

It’s these leases that have given the Duxton Water Board the confidence to forecast that dividends can grow over the next two years with an increase every six months.

Based on the next 12 months of projected dividends, it currently has a forward grossed-up dividend yield of 6.1%.

Rural Funds Group (ASX: RFF)

Farmland is a very different asset class compared to most other investments on the ASX. Rural Funds is the biggest agricultural REIT on the ASX. It has a diverse property portfolio including cattle, almonds, vineyards, macadamias and cotton.

One of the most attractive things about Rural Funds as an alternative ASX dividend share is that it aims to increase its distribution by 4% each year. This is possible thanks to the contracted rental indexation, regular productivity investments and the occasional accretive acquisition.

Rural Funds has forecast another increase for FY21. It offers a forward distribution yield of 6%.

Which alternative ASX dividend share to buy?

Vitalharvest is an interesting idea, it may prove to be the strongest performer over the next 12 months. But for consistent dividend growth I think Rural Funds and Duxton Water would be better buys today.

More reading

• 3 safe and strong ASX dividend shares to buy right now
• 2 ASX shares I plan to hold til I’m 100
• 3 Warren Buffett ASX dividend shares to buy right now
• 3 industries that may never recover from COVID-19
• Beat falling rates with these strong ASX dividend shares

Motley Fool contributor Tristan Harrison owns shares of COSTA GRP FPO, DUXTON FPO, and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended DUXTON 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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Is there any price better than free?

I mean, seriously: Free!

Costless.

Gratis.

$0.

It has to be the best deal going around, right?

Right?

You’re onto me, aren’t you.

You know that there’s a ‘but’ coming.

A huge ‘but’.

Maybe not. Maybe…

Just kidding. You’re right. 

Free is good.

But!

Nothing is truly free. 

There’s always a catch. Or a cost. Or a trade-off.

Sure, Facebook is free. Except that in return you become the product that’s sold to advertisers. And preyed on by apps and advertisers who use what they know about you to mess with you. Exhibit A: Cambridge Analytica. Exhibit B: Targeted (fake) election ads.

Enough said.

Air is free, too. I mean, not clean air — just whatever air polluters choose to leave us with. But of course there’s a cost. You just can’t measure it, so we all, as a group, pretend it’s free to pollute. Some freedom.

And then there are free share trades.

Yet another brokerage mob is offering commission-free trades for Australians who want to trade on the US exchanges.

Free!

What could possibly go wrong?

Well, — and from here on, for the avoidance of doubt (and to placate any lawyers reading), I’m talking generically, and not about any particular current or future broker! — there’s the not-free stuff:

Like inactivity fees.

Or withdrawal fees.

There’s the often-unknown-or-hidden cost of converting your Aussie dollars to greenbacks.

What happens to your email address?

What will you be cross-sold?

Do you have to pay a subscription fee?

What interest will you lose out on by holding your cash with that broker?

Are you covered by CHESS (on the ASX) or the insurance scheme run by SIPC (in the US)?

Free isn’t quite so ‘free’ any more, is it?

Now, I’m not saying the trade-off mightn’t be worth it.

For all I know it’s still a stonking great deal.

Or maybe it’s not.

See, our brains go into meltdown when ‘free’ is mentioned.

If you don’t believe me, consider the foreign exchange mob (I can’t remember who, and I didn’t bother Googling) that markets its services as ‘no commission’.

See if you can get there before me… how could they possibly do it without fees?

Yep, by giving an inferior exchange rate. 

They’re 100% right that no fees are charged, but would you rather:

1. Pay no fees, and get $620 for your $1,000; or 

2. Get $650 for your $1,000 and pay a $10 fee for the privilege?

(Hint, if you answered #1, I have a bridge I’d like to sell you)

And if you reckon no-one would fall for such a deal, ask yourself why the FX dealer uses that pricing mechanic (and marketing strategy).

It’s not quite ‘bait and switch’, but it’s a pretty good case of misdirection, huh?

Want another example? 

I haven’t seen the ad recently, but one Big 4 bank was advertising a ‘cashback’ home loan a while back. All you had to do is sign up to their loan, and they’d throw you a few gorillas ($3,000 from memory) for the deal.

Tempted? Of course you are.

I dare say it was a pretty effective campaign.

I also bet — I’d almost guarantee — that loan had a relatively unattractive interest rate.

It’s almost certainly a dumb financial decision — get a few grand now, pay much, much more over the life of the loan.

But people did it, because our brains short-circuit really quickly on this stuff.

(If they didn’t, the Big 4 Bank and the foreign exchange company wouldn’t waste their time and money on these types of products or marketing campaigns!)

So, when someone offers you something for free, it pays to wonder why — what’s in it for them?

Again, it’s not necessarily a bad thing… but unless you know what the deal is, you’re bringing a knife to a gunfight.

And you know what? That mightn’t even be the worst of it.

Because you know what else free brokerage does?

It lowers the barriers to action… removing what economists call ‘friction’.

When you had to pay $150 to buy or sell shares, it required two things. You needed to save more money (assisting and rewarding discipline) and you needed to trade less frequently (because buying, then selling and buying something else cost $450!)

You had to be thoughtful. Careful. Diligent. Slow. 

Now?

Average holding periods have fallen precipitously. And that was before zero-dollar brokerage exploded in the USA.

If it’s costless (or close enough), then where’s the friction? Where’s the mental handbrake? Where’s the ‘Maybe I’ll think about this for a bit’ response?

Gone? Just about, yeah.

Why not buy today, sell tomorrow morning, buy something else at lunch and then sell it before the end of the day?

Why stop and think? Why be long-term when there’s just no need to.

It’s free!

Or is it?

My old man used to say ‘you get what you pay for, and you pay for what you get’. 

That’s not always true, of course, but it’s a good yardstick.

The other truism is that we value more highly that which we pay for, compared to that we get for free.

Don’t get me wrong — in general, I’m all for lower cost for investors, across the board, including fees paid to fund managers and financial planners.

But remember the examples, above.

Just because the transaction is free, doesn’t mean it doesn’t cost you anything.

For investors, the hidden costs might be the most insidious of all. The temptation to day-trade. To sell on a whim, and buy on another whim. To forget all about the value of ‘long term, buy to hold’ investing, and, hell, just break loose!

And lest you think this is only about brokerage (and I’d be happy if I’ve made you think twice), it’s only partly about that.

Mostly, it’s about the one thing that even those who accept the premise tend to underrate: the overwhelming importance of behavioural psychology.

And, for investors, behavioural finance.

A good stock pick will make you money once. Learning the principles of a good investment will make you money many times. But a thorough and increasingly instinctive understanding of behavioural finance will pay off more times in your life than you can possibly imagine.

That’s the lesson I want you to take from this, to become a better investor (and manager of your own money) by understanding how our brains instinctively work.

Then taking control, and making better decisions.

Fool on!

More reading

• ASX 200 down 0.2%: Big four banks lower and TPG announces demerger plans
• Positive signs for Australia’s jobs market as ABS data points to a recovery
• Why AP Eagers, Lendlease, Pushpay, & ResMed shares are sinking lower
• 2 ASX shares in the firing line of trade tensions with China
• Where I would invest $5,000 into ASX shares immediately

Motley Fool contributor Scott Phillips 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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