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You might have heard someone talk about the recent Powerball jackpot at your most recent barbeque or water cooler gathering. Nothing gets as a-gossiping more it seems than a monstrous, life-changing jackpot up for grabs. Certainly not ASX shares.

Last week’s $150 million Powerball jackpot remains unclaimed at the time of writing, although we do know that the winning ticket was purchased in South Australia.

Whilst this gargantuan amount of cash has understandably got everyone talking (and dreaming), it’s probably worth discussing the pitiful odds of this windfall coming to you.

According to reporting from the ABC, mathematician Adam Spencer has estimated that the odds of winning last week’s $150 million jackpot was a staggering 134 million to one. Here’s how that looks written out:

134,000,000,000 : 1

Spencer expanded by walking us through the maths:

First of all, you have to get seven correct out of 35… That is a one in 6.8 million chance. If you get through that hoop, you then have a one in 20 chance of getting the final ball. The total odds are one in 134 million.

Not much of a gambler myself, I like the idea of getting a decent return on one’s cash using ASX shares instead.

Buying an ASX share almost certainly isn’t going to make you a millionaire 134 times over in one day. However, the probability of you building life-changing wealth using the share market is a lot more appealing than buying a lottery ticket.

So if you missed out on last week’s jackpot, here are two ASX shares I think you’d be better off buying than another long-shot lotto ticket.

Two ASX shares I’d buy over a lottery ticket

First up is the Vanguard Australian Shares Index ETF (ASX: VAS). This index fund isn’t really an individual ASX share, but represents an investment in a whole bunch.

How many? Well, VAS tracks the S&P/ASX 300 Index (ASX: XKO), which means it holds the largest 300 shares on the Australian share market within it.

That’s everything from Commonwealth Bank of Australia (ASX: CBA) and Woolworths Group Ltd (ASX: WOW) to Telstra Group Ltd (ASX: TLS) and Harvey Norman Holdings Limited (ASX: HVN).

Think of this index fund as buying a small share of all the lottery tickets on the ASX. You won’t get rich overnight. But over time, you’ll enjoy the average return of the entire stock market.

This average return has historically been rewarding. Since this index fund’s inception in 2009, it has averaged a return of 8.97% per annum (as of 30 April).

Whilst past performance is never a guarantee of future returns, I think an index fund like VAS is about as good as it gets if you’re looking for a sturdy long-term investment.

If you can’t win the Powerball, buy it

Next, we have Lottery Corp Ltd (ASX: TLC). Yep, none other than the very ASX share that runs the Powerball.

Lottery Corp has exclusive licenses to run lotteries and Keno in most Australian states and territories. Whilst only one person tends to benefit from a Powerball win, every single Lottery Corp shareholder benefits when a Powerball ticket is sold.

As such, I think you’d be better off betting on the ASX share that runs the Powerball than trying to beat those one in 134 million odds.

Lottery comparisons aside, I like Lottery Corp as an ASX share investment. We all tend to want to try our luck with a lotto ticket or at Keno in all kinds of economic weather. That makes Lottery Corp a reliable and defensive investment in my view.

Additionally, this company pays a decent, fully franked dividend, which means that there’s a good chance (a lot better than the lotto) you’ll get paid every six months just for owning this company’s shares.

The post Forget lottery tickets, I’d buy these ASX shares instead appeared first on The Motley Fool Australia.

More reading

• $1,000,000 portfolio: One way to achieve 7-figure wealth
• Here’s what $10,000 invested in the Vanguard Australian Shares Index ETF (VAS) at the start of 2023 is worth now
• Could buying the Vanguard Australian Shares Index ETF (VAS) at under $100 help me retire early?
• Here’s how the ASX 200 market sectors stacked up last week
• How I plan to invest my tax cuts

Motley Fool contributor Sebastian Bowen has positions in Telstra Group and Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lottery. The Motley Fool Australia has positions in and has recommended Harvey Norman and Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are a lot of options for income investors to choose from on the Australian share market.

One of the most popular options out there is Telstra Group Ltd (ASX: TLS).

The telco giant features in countless portfolios and super funds across the country. This is thanks largely to its defensive earnings and the Telstra board’s decision to regularly share a good portion of these profits with its shareholders each year in the form of dividends.

For example, in FY 2023 Telstra’s solid financial performance enabled the board to resolve to pay dividends of 17 cents per share, returning $2 billion to shareholders.

But what is next for the Telstra dividend?

Telstra recently released an update on its guidance for FY 2024 and FY 2025.

In respect to the former, Telstra has reaffirmed its earnings guidance for FY 2024. It continues to expect underlying EBITDA in the range of $8.2 billion to $8.3 billion.

However, it introduced guidance for FY 2025 which was short of expectations. Telstra is guiding to underlying EBITDA of $8.4 billion to $8.7 billion. A key driver of this growth will be a $350 million cost reduction plan.

Commenting on next year’s guidance, Goldman Sachs said:

Overall mid-point of guidance of $8.55bn is disappointing given we previously noted our views that $8.6bn was very achievable. Although the differences vs. GSe are not clear, it potentially relates to: (1) Timing of Enterprise restructure; or (2) Lower than CPI postpaid mobile pricing.

In light of this, it may not come as a surprise to learn that this guidance has implications for the Telstra dividend.

Dividend forecast through to 2027

According to a note out of Goldman Sachs, its analysts have downgraded their estimates for the Telstra dividend.

For FY 2024, the broker continues to expect a fully franked 18 cents per share dividend. This represents a 5.1% dividend yield based on the current Telstra share price of $3.53.

However, in FY 2025, Goldman now only expects a half cent increase to 18.5 cents per share. This is down from its previous estimate of 19 cents per share. Though, Goldman’s new dividend estimate still equates to an above-average dividend yield of 5.25%.

Looking ahead, it is a similar story in FY 2026, with Goldman now pencilling in a 19.5 cents per share fully franked dividend for that financial year. This is down from its previous estimate of 20 cents per share.

But once again, an attractive dividend yield would be on offer with Telstra’s shares if this dividend estimate is accurate. Based on its current share price, 19.5 cents per share equates to a 5.5% yield.

Should you invest?

Goldman may have been disappointed with Telstra’s update, but it still sees a lot of value in its shares.

It currently has a buy rating and $4.25 price target on them, which implies potential upside of 20% for investors over the next 12 months.

The post Here’s the new Telstra dividend forecast through to 2026 appeared first on The Motley Fool Australia.

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• Joining the revolution: How I’d invest in ASX AI shares right now
• Beat the bank! 2 ASX stocks worth buying to make more money than interest on savings
• With a dividend yield over 7%, are Telstra shares a buy for income?
• Buy these ASX 200 dividend shares for passive income in June
• Should you buy, hold, or sell this ASX 200 bank stock?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Artificial intelligence (AI) could be one of the next great megatrends to affect society, potentially as impactful as the Industrial Revolution.

While there is some trepidation about this rapidly developing new technology, there is also an incredible amount of excitement and optimism. AI could upend whole industries and fundamentally change the way we all work. But it also has the capability to massively enrich and improve our lives.

In this article, we take a look at what makes AI such an exciting field to invest in. Then, we’ll list some of the ASX stocks best positioned to benefit from the emergence of AI.

What even is AI, anyway?

Our ideas about AI have changed a lot over the past few decades. We used to think of AI as the friendly robots that ‘beep-booped’ their way around the Star Wars universe.

But nowadays, in the era of ChatGPT and DALL-E 3, we’re probably more likely to think of AI as a piece of complex computer software that we interact with on a computer screen than a clunky humanoid robot that follows us around on intergalactic adventures.

As our understanding of AI has changed and evolved, it has become a much more nebulous concept to define. Essentially, it is now an umbrella term that includes just about any computer process designed to simulate the patterns of human thought.

For example, ChatGPT is a large language model that is designed to produce fluent, human-sounding responses to just about any prompt. And, as I’m sure you’re already aware, it’s pretty convincing.

AI systems like ChatGPT use machine learning, an algorithmically driven process. In this process, the AI program is fed huge amounts of data, which it then analyses for patterns, connections, and correlations.

In the case of ChatGPT, if you give the program enough language data, it will begin to learn how language is constructed. Eventually, the program will be able to simulate that language and even generate its own unique responses to questions.

Why should you invest in it?

Putting all those uncomfortable Blade Runner­-type questions about what it even means to be human anymore to one side, today’s AI technology is undoubtedly extremely cool. And it’s developing at a rapid pace.

The commercial applications of AI are potentially limitless. Tasks that would normally take a human hours to complete, AI could bash out in mere seconds. It could replace a corporation’s whole logistics, accounting and cybersecurity departments.

It could develop marketing campaigns based on a deep analysis of consumer trends, improve medical care, help advance scientific discoveries, and drive our cars for us.

Given its potential, AI could be a great section of the market to focus on for growth-minded investors. It does, of course, come with risks – the fast pace of development means that today’s industry leaders might become tomorrow’s laggards.

So, be sure to diversify across a few different AI stocks and balance them out in your portfolio with some less risky shares, like defensive stocks and blue chips.

ASX AI shares

Luckily for ASX investors, there are plenty of stocks available on the ASX that tap into the AI trend. Some develop AI technology, while others provide the infrastructure that supports it.

I’ve selected a bit of a mix below to give you an indication of the different ways you can gain exposure to AI.

NextDC Ltd (ASX: NXT)

AI programs like ChatGPT and other machine learning systems require huge amounts of data to function effectively. And all that data needs to be stored somewhere.

That’s where NextDC comes in. It is a leading Australia-based company operating data centres in Australia, New Zealand, Japan and Malaysia. As AI technology continues to develop, demand for data storage will only increase, creating growth opportunities for companies like NextDC.

And the company knows it – it launched a $1.3 billion capital raise back in April to help finance its growth plans.

Telstra Group Ltd (ASX: TLS)

In addition to data storage, AI needs fast and reliable internet connectivity. As the nation’s leading telco, Telstra could have the potential to be Australian AI’s infrastructure backbone.

According to its website, Telstra’s mobile network covers 2.7 million square kilometres of Australia’s landmass – about 60% more than its next biggest rival.

Telstra is a good choice for income-seeking investors as it pays a consistent, fully franked dividend. Based on current prices, its dividend yield is a healthy 5%.

BetaShares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ)

Exchange-traded funds (ETFs) are a great option for investors seeking diversified exposure to global AI stocks. When you buy a unit of an ETF like RBTZ, you’re really buying a small ownership stake in a portfolio of stocks overseen by a fund manager.

This means that in a single trade, you can gain exposure to an entire industry.

The RBTZ ETF invests in companies worldwide that specialise in robotics, AI, automation, and driverless cars and have a market capitalisation of at least US$100 million.

Currently, the fund’s largest holding is American tech company and AI champion NVIDIA Corp (NASDAQ: NVDA), which makes up about 10% of its portfolio,

The post Joining the revolution: How I’d invest in ASX AI shares right now appeared first on The Motley Fool Australia.

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• Here’s the new Telstra dividend forecast through to 2026
• Beat the bank! 2 ASX stocks worth buying to make more money than interest on savings
• Nvidia shares are now worth more than 17 times the market cap of BHP. What’s next?
• With a dividend yield over 7%, are Telstra shares a buy for income?
• Buy these ASX 200 dividend shares for passive income in June

Motley Fool contributor Rhys Brock has positions in Nextdc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

With a new month just days away, let’s take a look at four ASX dividend stocks that analysts think could be worth adding to your portfolio in June.

Here’s what you need to know about them:

Accent Group Ltd (ASX: AX1)

Accent could be an ASX dividend stock to buy in June. It is the footwear-focused retailer behind brands such as HYPEDC, Platypus, Stylerunner, Subtype, and The Athlete’s Foot.

Bell Potter is a big fan of the company and sees significant value in its shares at current levels. The broker currently has a buy rating and $2.50 price target on them.

As for dividends, Bell Potter expects fully franked dividends per share of 13 cents in FY 2024 and then 14.6 cents in FY 2025. Based on the latest Accent share price of $1.89, this represents dividend yields of 6.9% and 7.7%, respectively.

Centuria Industrial REIT (ASX: CIP)

Another ASX dividend stock for investors to consider buying in June is Centuria Industrial. It is the country’s largest domestic pure play industrial property investment company.

Analysts at UBS are feeling very positive about the company’s outlook and have a buy rating and $3.71 price target on its shares.

The broker is also expecting some decent yields from its shares in the near term. It is forecasting dividends per share of 16 cents in both FY 2024 and in FY 2025. Based on the current Centuria Industrial share price of $3.20, this represents dividend yields of 5% in both years.

Deterra Royalties Ltd (ASX: DRR)

Deterra Royalties could be another excellent ASX dividend stock to buy next month. It is a mining royalties company with a collection of cash-generating assets across Australia.

Morgan Stanley is positive on the company and has an overweight rating and $5.60 price target on its shares.

It also expects Deterra Royalties to be in a position to pay some big dividends in the near term. It is forecasting fully franked dividends per share of 32.7 cents in FY 2024 and 39 cents in FY 2025. Based on the current Deterra Royalties share price of $4.77, this will mean yields of 6.8% and 8.2%, respectively.

Eagers Automotive Ltd (ASX: APE)

A final ASX dividend stock that could be a buy in June is Eagers Automotive. It is operates one of Australia’s largest auto dealership networks.

Bell Potter sees a lot of value in its shares following a recent selloff. The broker reiterated its buy rating with a price target of $13.35.

As for income, it expects Eagers Automotive to pay fully franked dividends of 64.5 cents per share in FY 2024 and then 73 cents per share in FY 2025. Based on its current share price of $10.52, this represents dividend yields of 6.1% and 6.9%, respectively.

The post 4 excellent ASX dividend stocks to buy in June appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group and Eagers Automotive Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) share Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is a stalwart in my portfolio, and I expect to own it for the rest of my life.

Soul Patts is an investment house that has been listed since 1903, making it one of the oldest companies on the ASX.

It started as a chemist with 21 pharmacy stores, but it’s now a very different business. Incredibly, Soul Patts has been managed by the same family from the start – Robert Millner is the fourth generation of the family to chair the company.

Being old doesn’t automatically make it a compelling investment, though longevity is a useful characteristic for a long-term investment. It means I can confidently hold the ASX 200 share for a long time.

Three factors really matter to me about this business.

Diversification and investment flexibility

Diversification is appealing because it lowers the risk to the Soul Patts portfolio if a particular investment goes wrong.

The portfolio is invested in multiple industries and asset classes, including ASX blue-chip shares, ASX small-cap shares, private businesses, property, and credit/bonds.

In terms of individual ASX companies, some of its main investments include Brickworks Limited (ASX: BKW), New Hope Corporation Ltd (ASX: NHC), TPG Telecom Ltd (ASX: TPG), Tuas Ltd (ASX: TUA), BHP Group Ltd (ASX: BHP), Macquarie Group Ltd (ASX: MQG), CSL Ltd (ASX: CSL), Goodman Group (ASX: GMG) and Wesfarmers Ltd (ASX: WES).

Other areas it’s invested in include agriculture, resources, financial services, retirement living, swimming schools, electrification and more.

I like that the business has the flexibility to invest almost anywhere, opening up lots of opportunities for the company to find the best investment.

Re-investment

One of the most substantial financial moves that can help an ASX 200 share deliver long-term returns is the re-investment of profit back into itself for more growth.

With Soul Patts, there’s a double layer of re-investment occuring. The investment house’s portfolio of companies are re-investing inside their own businesses. Soul Patts doesn’t need to do anything for Wesfarmers, Goodman and Brickworks to invest in and grow their operations.

On top of that, Soul Patts receives dividends and distributions from its portfolio of assets. After paying for its costs and sending a majority of the net cash flow to shareholders as a dividend, Soul Patts re-invests some of that cash flow into more opportunities, adding more financial power to the snowballing effect of growth.

Growing dividends

The ASX 200 share has grown its annual ordinary dividend every year since 2000, the longest streak of consecutive dividend increases on the ASX.

Dividend hikes aren’t guaranteed, but it’s nice to know that there’s a good chance next year’s dividend payment will be larger than this year’s.

In the FY24 first-half result, Soul Patts increased its interim payout by 11.1% after its net cash flow from investments increased by 6.9%.

It currently has a grossed-up dividend yield of around 4%.

I like that I can own Soul Patts shares and receive dividends, meaning I don’t need to sell shares to capitalise on the growth it’s generating.

The post If I had to own only one ASX 200 share forever, this would be it appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks, CSL, Goodman Group, Macquarie Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Brickworks, Macquarie Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has recommended CSL and Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Warren Buffett is one of the world’s greatest investors. Berkshire Hathaway, the business Buffett has led for decades, achieved an average annual return of 19.8% between 1965 and 2023.

Buffett is also one of the world’s most generous people with his money and advice. He plans to donate most of his huge wealth to charity. He also spends hours every year at the Berkshire Hathaway annual general meeting answering questions from shareholders and has given numerous pieces of advice over the years.

I will talk about three Buffett pearls of wisdom that I think are very relevant to today’s investment conditions.

Interest rates

Inflation remains higher than central banks would like, so interest rates may stay at this level for longer. The US Federal Reserve boss Jerome Powell said earlier in May:

We did not expect this to be a smooth road. But these [inflation readings] were higher than I think anybody expected.

What that has told us is that we’ll need to be patient and let restrictive policy do its work.

Of course, that doesn’t mean we shouldn’t invest at all. But, I believe investors should continue to assess company valuations on their merits and only buy if they think long-term returns can be solid.

Warren Buffett once explained why interest rates are so important to valuations:

The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature…its intrinsic valuation is 100% sensitive to interest rates.

Don’t have to swing at every pitch

At a time when the share prices of many businesses are close to 52-week highs or all-time highs, I think it would be reasonable for investors to be discerning about which investments they’re buying.

Investing is not like baseball, where batters must swing at pitches sooner or later. We can take our time with investments and only buy shares at a price we like.

Warren Buffett explained how to handle investing in this situation:

The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot. And if people are yelling, ‘Swing, you bum!,’ ignore them.

When the market does become fearful, that could be the time to be greedy. There doesn’t need to be a bear market to find opportunities, though; I’ve written plenty of articles recently where I see opportunities right now.

Great companies at fair prices

There is a wide range of potential ASX share investments for us to buy. Warren Buffett and Charlie Munger have been advocates of investors focusing on wonderful companies rather than average businesses. Warren Buffett said:

It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

By choosing great businesses, I think those investments are much more likely to deliver strong metrics such as a higher return on equity (ROE) and better compounding of net profit after tax (NPAT) over the long term. Owning wonderful companies can deliver good share price (and dividend) returns over time.

The post 3 pearls of Warren Buffett wisdom I think all ASX investors need right now appeared first on The Motley Fool Australia.

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• Why inflation could cost young investors 50% of their retirement savings

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Do you have some room in your investment portfolio for a couple of ASX 200 blue chip shares?

If you do, then it could be worth considering the two blue chips listed below that have been named as best ideas by analysts at Morgans.

Here’s what the broker is saying about these high-quality companies right now:

Flight Centre Travel Group Ltd (ASX: FLT)

The first ASX 200 blue chip share that Morgans has named as a buy is Flight Centre.

It is one of the world’s largest travel groups with a vast leisure and corporate travel sales network that extends throughout four major regions. These are Australia and New Zealand, The Americas, EMEA, and Asia.

Morgans believes that it would be a great option for investors right now. Particularly given its compelling risk/reward profile. It explains:

FLT has the greatest risk, reward profile of our travel stocks under coverage. The risk is centred around execution given its changed business model, while the reward is material if FLT delivers on its 2% margin target. If achieved, this would result in material upside to consensus estimates and valuations. FLT is targeting to achieve this margin in FY25. With greater confidence in the travel recovery and the benefits of Flight Centre’s transformed business model already emerging, we think the company is well placed over coming years.

Morgans has an add rating and $27.27 price target on the company’s shares.

Washington H Soul Pattinson & Company Ltd (ASX: SOL)

Another ASX 200 blue chip share that could be a buy according to Morgans is Soul Patts. It is an investment company with a diversified portfolio of assets across a range of industries.

Morgans is very positive on the company’s investments and highlights its long track record of outperforming the market. It said:

SOL’s investment portfolio includes a diversified pool of assets ranging from listed equities (both large cap and emerging companies), private equity, property and structured yield. On a 20-year horizon, SOL’s annualised TSR is 12.5% vs the All Ords accumulation index of 9%. SOL has a 20-year history of increased dividend distributions, with a 20-year CAGR of c.8%. In our view, SOL’s management team continues to deliver both organic and inorganic growth over the long term. We continue to like the SOL story, particularly its track record of growing distributions.

The broker has an add rating and $35.60 price target on the company’s shares.

The post 2 of the best ASX 200 blue chip shares that money can buy appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Idp Education. The Motley Fool Australia has recommended Bapcor and Idp Education. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

By now, all Australians would be aware of the woes that high inflation has brought upon us. After virtually disappearing as an economic concern for a decade, the post-pandemic era saw inflation rear its ugly head once more. This could have serious consequences for a generation of Australians’ retirement dreams.

The Australian economy has been suffering from some of the worst rates of inflation we’ve seen since the turn of the century since 2021. This has seen the price of almost everything rise at a rate that many Australians have never experienced.

Inflation can also be thought of as the erosion of the value of our currency. As inflation rages, the cost of everything priced in Australian dollars rises as the real value of the currency falls. This makes financial management of all aspects of life, including retirement planning, more difficult. If someone’s wages or salary doesn’t increase by at least the rate of inflation, that person’s living standards will fall.

New data from Commonwealth Bank of Australia reveals that the high inflation environment we’ve all been enduring over the past few years is hitting younger people harder than older people.

According to the CBA report, Australians of retirement age (aged over 65) don’t seem to be feeling the pains of inflation, with this age group spending above the rate of inflation over the first three months of 2024. But in stark contrast, Australians aged between 25 and 29 reduced their spending by 3.5% over the three months to 31 March compared to the same period in 2023.

This trend could have a severe impact on the retirement savings of young Australians.

Inflation eats into younger Australians’ retirement dreams

Most Australians invest with the goal of building wealth, achieving financial independence and perhaps even an early retirement.

The powers of compound interest become more potent the longer someone invests in wealth-producing assets like ASX shares. As such, getting started with investing as early as possible is essential for maximising one’s investing returns (and retirement comfort) over a lifetime.

Here’s how Visual Capitalist recently put it:

Though you should only invest money that you don’t need access to in the short term, the reality is that waiting will have consequences on your long-term gains.

For example, let’s say you started investing at 20 years old, and you invest $250 each month with an 8% annual rate of return. By the time you reach 65, over 50% of your total portfolio would have come from money that you invested in your 20s.

Someone who invests a decade later than their peer with double the amount will actually see lower returns in the long run.

By this logic, the current inflation crisis could be doing enormous damage to younger Australians’ retirement prospects.

If Australians aged between 25 and 29 are cutting their spending, we can probably assume that they are struggling to put the same money aside to invest for retirement as they might once have done as well.

So if you’re a younger Australian struggling to invest at the same rate you were in, say, 2021, right now, this is very much worth keeping in mind. It can be devilishly difficult to scrape together enough money to invest in your retirement in 2024. But this is a timely reminder that every little bit helps.

The post Why inflation could cost young investors 50% of their retirement savings appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

With so many shares to choose from on the Australian share market, it can be difficult to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Brambles Ltd (ASX: BXB)

According to a note out of UBS, its analysts have retained their buy rating and $17.30 price target on this logistics solutions company’s shares. The broker highlights that Brambles has been having a reasonably underwhelming year with mixed performances being seen across regions. However, UBS is expecting things to pick up in the final quarter of FY 2024, which it believes could support a re-rating of Brambles’ shares to higher multiples. So, with its shares trading at a deep discount to industrials peers, the broker thinks that now is an opportune time for investors to snap them up. The Brambles share price is trading at $14.49 on Monday afternoon.

Coles Group Ltd (ASX: COL)

A note out of Citi reveals that its analysts have retained their buy rating and $19.00 price target on this supermarket giant’s shares. The broker has been busy making in store visits to get a better idea of how the big two supermarket operators are performing with their respective strategies. The good news for Coles’ shareholders is that Citi believes that its pricing strategy is leading the way and will result in stronger sales growth during the fourth quarter of FY 2024. This is based on its belief that Coles’ strategy is being executed better and has a stronger value perception. And while the broker likes both supermarket giants at current levels, its preference at this point is Coles. The Coles share price is fetching $16.32 on Monday.

Collins Foods Ltd (ASX: CKF)

Analysts at Morgans have retained their add rating on this quick service restaurant operator’s shares with a trimmed price target of $11.50. The broker has been busy looking over recent updates from peers. Unfortunately, these updates demonstrated moderating sales in the Australian market during the first half of 2024. In light of this, the broker has trimmed its earnings estimates ahead of the company’s full year results release next month. Nevertheless, Morgans believes that the KFC restaurant operator’s shares have been oversold and that this has created a buying opportunity for investors. The Collins Foods share price is trading at $9.48 at the time of writing.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in Collins Foods. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool Australia has recommended Collins Foods. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.