Tag: Motley Fool Australia

With so many shares to choose from on the ASX, it can be hard 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 shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Redbubble Ltd (ASX: RBL)

According to a note out of Goldman Sachs, its analysts have upgraded this ecommerce company’s shares to a buy rating with a $2.35 price target. The broker made the move after Redbubble’s very strong trading update led to a revision to its estimates. Goldman has lifted its EBITDA estimates materially over the next couple of years to reflect higher revenues and lower customer acquisition costs. I think Goldman Sachs makes some good points and Redbubble could be worth a closer look.

Sigma Healthcare Ltd (ASX: SIG)

Analysts at Citi have upgraded this pharmacy chain operator and wholesaler’s shares to a buy rating with a 75 cents price target. The broker has been looking at the industry following the announcement of the new Community Pharmacy Agreement. This agreement aims to improve patient choice and health literacy about access to medicines through community pharmacies. Citi appears to have seen enough positives in it to upgrade Sigma’s shares. I’m not a big fan of Sigma, but it could be worth a closer look following this agreement.

Treasury Wine Estates Ltd (ASX: TWE)

A note out of UBS reveals that its analysts have retained their buy rating and $14.80 price target on this wine company’s shares. Although the broker’s research indicates that Treasury Wine is continuing to lose market share in the United States, it feels investors should be focusing on the future. It sees a lot of value in its shares given its strong balance sheet, the restructure of the Americas business, and the potential spin off of the Penfolds business. I agree with UBS and feel Treasury Wine would be a good buy and hold option.

More reading

• Could these ASX 100 shares help you retire early?
• The latest ASX shares to be upgraded by top brokers to “buy”
• Why AMP, IOOF, Redbubble, & Westpac shares are charging higher
• ASX retailers beware! Amazon.com is gearing up for its next major attack
• Redbubble share price rockets 40% on bumper Q4 sales growth

Motley Fool contributor James Mickleboro 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 has recommended REDBUBBLE 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.

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

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The JB Hi-Fi Limited (ASX: JBH) is bucking the sharp market sell-off as a broker survey finds it to be COVID-19 resistant. And it isn’t the only one either.

Shares in the electronics retailer jumped 1.3% to $42.80 in morning trade when the S&P/ASX 200 Index (Index:^AXJO) tumbled 1.3%.

Worries about a second wave of coronavirus infections are gripping global markets, but investors should stand ready to back ASX shares that are well placed to benefit from the crisis.

Survey’s surprising results

JP Morgan undertook a survey of 500 consumers to test some of its assumptions about the winners and losers from the pandemic – and some of the results were surprising.

“The COVID-19 pandemic and its lingering aftereffects look all but certain to fundamentally change how we work, consume, travel, interact and socialise,” said the broker.

“These tectonic shifts will have deep and far-reaching implications for a range of sectors and industries, with many likely to endure permanent structural change.”

The respondents to the survey were chosen across age, gender and employment status. This is to ensure they represented Australia’s demographic distribution.

Not so super for Supermarkets

The results throw into doubt JP Morgan’s belief that investors should be underweight on consumer discretionary stocks and neutral on consumer staples during the crisis.

“Consumers expect to shop online for food more post-COVID-19, yet surprisingly intend to also eat out more frequently,” said JP Morgan.

“We had expected a result showing food retail gaining share from cafes and restaurants.”

This feedback holds mixed implications for the broker’s “overweight” recommendation on Coles Group Ltd (ASX: COL) and Metcash Limited (ASX: MTS).

Malls are down but not out

Another surprise from the survey was consumer attitudes towards shopping malls. The surge in online sales from stuck-at-home consumers is a major risk factor for ASX-listed retail landlords.

“Somewhat surprisingly, only a small [number] of people expect to visit shopping centres less post-COVID-19 than more, with the average visitation also expected to be down only slightly,” added JP Morgan.

“We view this as positive for retail landlords, as we had expected a more dramatic shift given how they are priced.”

I still hold a negative view to the sector as visitations don’t necessarily equate to sales, but JP Morgan’s top pick here is GPT Group (ASX: GPT).

Driving better than flying

Another interesting finding was that nearly half of respondents expected to fly less even after state and international border restrictions are eased.

Further, 68% said they won’t fly internationally until a vaccine is found. This means driving holidays may be entering a renaissance period, and the stocks on the broker’s buy list that are leveraged to this are petrol stations Viva Energy Group Ltd (ASX: VEA) and Ampol Ltd (ASX: ALD).

On the flipside, the survey shows why the path to recovery for Sydney Airport Holdings Pty Ltd (ASX: SYD) and Qantas Airways Limited (ASX: QAN) may take longer to eventuate.

Finally, the work-from-home culture that’s incubated during the pandemic is likely to continue to be a tailwind for JB Hi-Fi.

Around 45% of respondents intended to increase their spending on technology and JP Morgan is recommending investors buy this stock.

More reading

• ASX 200 drops 1.15%: Fisher & Paykel Healthcare impresses, big four banks tumble
• E-commerce is the COVID-19 success story. These businesses are the clear winners.
• Fortescue Metals and 2 other ASX 200 shares to buy in a recession
• Why you probably won’t buy stocks in the next market crash either
• Comments from CUA brings hope to COVID-19 stricken ASX banking stocks

Motley Fool contributor Brendon Lau 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The stock market has been on a wild ride lately, and investors aren’t enjoying it. In fact, a Gallup poll taken at the end of April 2020 revealed just 21% of people think stocks or mutual funds are the best long-term investment. This was the lowest level since 2012. And that was well before it was announced that the country had officially entered a recession. 

If you’re concerned about buying stocks now, you aren’t alone. But you may also be making a big mistake as a recession is as good a time to invest as any — or perhaps an even better one.

Don’t take my word for it either. Heed the advice of the Oracle of Omaha, as Warren Buffett, one of the world’s best investors, has a lot to say about investing in troubled times. Here are some pearls of wisdom to take to heart. 

1.”Widespread fear is your friend as an investor because it serves up bargain purchases”  

More than half of all Americans fear the market hasn’t hit bottom yet. If you’re one of them, you shouldn’t let fear prevent you from putting your money in.

As Buffett explained, when most people are fearful, it’s a good opportunity to purchase shares of stock at low prices. And who doesn’t want to buy low and sell high?  

2. “The best chance to deploy capital is when things are going down”

While the market has largely recovered from the coronavirus-driven crash in March, another correction is inevitable as many investors are still overvaluing stocks because they aren’t taking into account the full economic impact COVID-19 could have throughout the summer and fall. 

If the market ends up crashing again, you may be tempted to sit on the sidelines and wait until the bad times have passed. Instead, heed Buffett’s advice about the opportunity to invest on the downswing and take the chance to get your money in to score even deeper discounts. 

3. “Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance”

A quick glance at the news shows that commentators aren’t very hopeful about the future. And with the country in a recession, coronavirus cases rising, and justifiable fear of a second wave, you won’t get much reassurance right now.

But according to Buffett, that’s a good thing because you won’t be paying a high price for words that mean nothing in the end since, after all, no one can predict what’s coming. 

4. “Risk comes from not knowing what you’re doing”

Americans may be wary of stocks because they’re worried about the risk of loss — and March’s market crash didn’t help allay their fears. But, as Buffett points out, putting your money into the market really only carries big risks if you don’t know how to do it right.

Of course, any investment could lose money. But if you know how to pick solid companies to invest in (or you invest in index funds that track the market’s performance) and you build a diversified portfolio, the most likely outcome based on decades of historical data is that you’ll earn a reasonable return overall, over time.  

This doesn’t mean no investments will perform poorly, and it doesn’t even mean that you won’t have bad years. But it does mean that when you take the time to learn how to invest, you invest for the long term, and as you make informed decisions in building a diversified portfolio, you reduce your risk — even if you’re investing in a recession.

Of course, on the flip side, if you think you can invest your money during the downturn and make a quick buck without taking the time to learn the fundamentals of sound investing, you could be setting yourself up for disaster.  

5. “Predicting rain doesn’t count; building arks does”

There’s plenty of reason for doom and gloom during the 2020 recession, but anticipating bad times does little to help you survive them.

Instead, follow Buffett’s wise words and take the time to build your ark. You can do this by developing a solid investment strategy, researching and picking stocks you’ll be happy holding for a while, and making sure you’ve taken the steps needed to recession-proof your finances. 

Don’t let the opportunity to invest during a recession pass you by

Recessions almost always present buying opportunities, but this one is unique because it wasn’t driven by natural economic cycles but rather by a black swan event. If effective treatments are developed for coronavirus or a vaccine comes along sooner than expected, economic recovery may be swift.

Don’t miss out on the chance to invest when things look bleak — as long as you do it wisely. Otherwise, you could very well come to regret it. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Here are 2 easy ways to invest in quality international shares on the ASX
• Leading brokers name 3 ASX shares to buy right now
• Broker survey points to more upside for JB Hi-Fi and these ASX stocks
• ASX 200 drops 1.15%: Fisher & Paykel Healthcare impresses, big four banks tumble
• Why De Grey, Fisher & Paykel Healthcare, Perseus, & PolyNovo shares are charging higher

Christy Bieber 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.

The post Worried about investing in a recession? Take this advice from Warren Buffett appeared first on Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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At lunch on Monday the S&P/ASX 200 Index (ASX: XJO) is on course to start the week on a disappointing note. The benchmark index is currently down 1.15% to 5,836 points.

Here’s what is happening on the market today:

Big four banks tumble.

The big four banks have taken a tumble on Monday and are acting as a major drag on the ASX 200’s performance. All four banks are trading notably lower, but the National Australia Bank Ltd (ASX: NAB) share price is the worst performer in the group. NAB’s shares are nursing a 2.6% decline at the time of writing.

Fisher & Paykel Healthcare impresses.

The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price is racing higher on Monday after the release of a strong full year result. In FY 2020, the medical device company delivered an 18% increase in operating revenue to NZ$1.26 billion and a 37% jump in net profit after tax to NZ$287.3 million. This was ahead of its upgraded guidance. Further growth has been forecast for FY 2021, thanks largely to its Hospital products segment.

Travel shares tumble.

Concerns over a spike in coronavirus cases in Victoria and the impact this could have on the domestic travel market appear to be weighing heavily on travel shares on Monday. The likes of Flight Centre Travel Group Ltd (ASX: FLT), Qantas Airways Limited (ASX: QAN), and Webjet Limited (ASX: WEB) have all fallen heavily today.

Best and worst ASX 200 shares.

The best performer on the ASX 200 on Monday has been the Fisher & Paykel Healthcare share price with a gain of 5%. Investors appear pleased with its record full year result and guidance for FY 2021. The worst performer on the index has been the Flight Centre share price with a decline of over 6%. Qantas isn’t far behind with a sizeable 5.5% decline of its own.

More reading

• Broker survey points to more upside for JB Hi-Fi and these ASX stocks
• Why De Grey, Fisher & Paykel Healthcare, Perseus, & PolyNovo shares are charging higher
• Why Galaxy, Jumbo, Webjet, & Zip Co shares are sinking lower
• Fortescue Metals and 2 other ASX 200 shares to buy in a recession
• Why you probably won’t buy stocks in the next market crash either

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is following the lead of U.S. markets and tumbling notably lower. At the time of writing the benchmark index is down 1.35% to 5,824.3 points.

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

The De Grey Mining Limited (ASX: DEG) share price has continued its sensational run and is up over 3% to 92.2 cents. The gold-focused mineral exploration company’s shares have been on fire this year thanks to some impressive drilling results from the Hemi prospect. These results appear to indicate that the company is sitting atop a major resources.

The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price has climbed almost 5% to $31.03. Investors have been buying the medical device company’s shares after the release of its full year results. For the 12 months ended 31 March 2020, the company delivered an 18% lift in operating revenue to NZ$1.26 billion and a 37% jump in net profit after tax to NZ$287.3 million. Further growth has been forecast for FY 2021, thanks largely to its Hospital products segment.

The Perseus Mining Limited (ASX: PRU) share price is up over 3.5% to $1.27. Investors have been buying the gold miner’s shares after the price of the precious metal jumped higher on Friday night. Investors were buying gold after a spike in coronavirus cases led to increased demand for safe haven assets. The S&P/ASX All Ordinaries Gold index is up 1.8% at the time of writing.

The Polynovo Ltd (ASX: PNV) share price has stormed over 4.5% higher to $2.64. This is despite there being no news out of the medical device company. However, as I mentioned here last week, one leading fund manager believes that PolyNovo’s shares are undervalued at the current level. This could have given them a boost today.

More reading

• Up 2,700% in 5 years: can the a2 Milk share price continue to climb?
• ASX 200 Weekly Wrap: ASX retreats as confidence wanes
• Fisher & Paykel Healthcare share price on watch after COVID-19 drives record profit result
• 5 things to watch on the ASX 200 on Monday
• $10,000 invested in De Grey Mining shares in January would be worth $165,000 today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of POLYNOVO FPO. 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.

The post Why De Grey, Fisher & Paykel Healthcare, Perseus, & PolyNovo shares are charging higher appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) has followed the lead of U.S. markets and is on course to record a sizeable decline. At the time of writing the benchmark index is down 1.4% to 5,819.9 points.

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

The Galaxy Resources Limited (ASX: GXY) share price is down 2% to 77.5 cents. Investors have been selling the lithium miner’s shares after analysts at Credit Suisse downgraded them to a neutral rating and slashed their price target to 84 cents. It made the move due to weakening lithium prices.

The Jumbo Interactive Ltd (ASX: JIN) share price has crashed 8% lower to $10.52. This follows the announcement of a 10-year lottery ticket reseller extension with Tabcorp Holdings Limited (ASX: TAH). While this removes a lot of uncertainty, it has come at a cost. Jumbo will pay Tabcorp an upfront fee of $15 million and increasing royalties on ticket sales. Eventually Jumbo will pay Tabcorp a service fee of 4.65% of the ticket subscription price.

The Webjet Limited (ASX: WEB) share price has tumbled 5% lower to $3.21. Webjet is one of a number of travel shares that are tumbling lower on Monday. Investors appear concerned that the domestic travel market could take longer to recover following a spike in coronavirus cases in Victoria. In addition to this, valuation concerns could be weighing on the online travel agent’s shares.

The Zip Co Ltd (ASX: Z1P) share price has fallen almost 4% to $5.24. With the market tumbling notably lower today, investors appear to have been taking a bit of profit off the table. Prior to today, the Zip Co share price was up 45% since this time last month. Investors have been buying the payments company’s shares after it announced its expansion into the United States.

More reading

• Jumbo Interactive share price sinks lower on new Tabcorp agreement
• ASX 200 Weekly Wrap: ASX retreats as confidence wanes
• Here are the 10 most shorted shares on the ASX
• Could the Afterpay share price really be good value right now?
• These were the worst performing ASX 200 shares last week

James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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E-commerce business has been the great success story of the pandemic. The lockdown has accelerated the trend towards online sales. In fact, Australia Post data shows that e-commerce growth rose by 80% in the 8 weeks following the World Health Organisation’s (WHO) announcement. They believe that this year online sales will reach 15% of all retail sales. That is 3–5 years ahead of previous forecasts.

Furthermore, we saw evidence of this among many of the revenue reports companies have posted throughout the pandemic. 

Traditional e-commerce business

It sounds strange to be talking about traditional e-commerce. However, Kogan.com Ltd (ASX: KGN) definitely fits that mould.  Kogan is an online marketplace similar to that of Amazon.com (NASDAQ: AMZN) and started out selling home electronics. Since Kogan listed on the ASX in 2016, it has purchased the old Dick Smith electronics business and recently purchased furniture retailer, Matt Blatt.

In a recent business report, Kogan announced an increase in online sales by 100% in 4Q FY20 to date. The company’s profit for the same period also grew by 130%. Kogan currently sells at a price to earnings (P/E) ratio of 73.83. 

A surprise entrant in this space is the online marketplace purchased by Wesfarmers Ltd (ASX: WES). Catch is a general marketplace the same as Kogan. Wesfarmers recruited former Amazon executive, Peter Sauerborn to run the company. Catch reported growth in gross transaction value of 68.7% for 2H FY20 to date, compared to 21.4% for H1 FY20. 

Wesfarmers also owns other retailers like Bunnings, Kmart and Officeworks. Financial year to date, total online sales across the Group increased by 60% to $1.4 billion or $1.9 billion.

Wesfarmers current holds a P/E ratio of 22.55. 

Store-specific sales

City Chic Collective Ltd (ASX: CCX) is a multi-branded women’s fashion apparel retailer. I think this is a red hot small-cap share to keep an eye on with its P/E ratio currently sitting at 33.91. The company prides itself on being an omnichannel retailer with online retail contributing two-thirds of the company’s global sales.

During the period of store closures during the lockdown, the company saw an increase in sales of 57%. City Chic states they achieved this increase by quickly adjusting their product offering to cater to customer demand during the lockdown. The company is looking to maintain high online sales revenues as stores begin to open after the pandemic. 

Temple & Webster Group Ltd (ASX: TPW) is a furniture company that has an e-commerce business with a ‘drop-shipping’ operations model. For the uninitiated, this means that products are shipped directly to customers from the providers. Temple & Webster also have their own branded products.

For 2H FY20 up to the end of May, the company reported a 68% increase in revenue and a 68% increase in active customers. In addition, the company reported a +100% increase in June revenue thus far verse the previous corresponding period. This all plays into the company’s current P/E ratio which sits at 199.93.

Foolish takeaway

This shortlist is just some of the e-commerce highlights across the market right now. I haven’t included the impressive sales increases by other recognised brands such as JB Hi-Fi Limited (ASX: JBH) or Harvey Norman Holdings Limited (ASX: HVN). However, the overall online shopping trend is clear. 

With e-commerce business rapidly racing towards 15% of total retail sales, it has become an essential element of retail. Of the companies listed here, the high P/E ratios show that the market thinks there is a big future in these sales channels. 

More reading

• 3 top ASX growth shares to buy for FY21
• ASX 200 Weekly Wrap: ASX retreats as confidence wanes
• 3 fantastic ASX dividend shares to buy next week
• 3 ASX shares to own for the next 10 years
• ASX shares vs property: which is a better investment?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daryl Mather 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 Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Amazon and Temple & Webster Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Many investors are are feeling the inevitable recession may present some buying opportunities among ASX 200 shares but are uncertain which ones to target.

Whilst I still believe in buying and holding for the long term, there are definitely some ASX 200 shares I’d have my eye on in the event there is another downturn this year.

3 ASX 200 shares to buy in a recession

The first Aussie company on my buylist should we experience another bear market would be Fortescue Metals Group Limited (ASX: FMG). 

Fortescue is one of the world’s leading iron ore miners and could benefit from a mining and infrastructure boom. When the GFC hit in 2008-09, it was Chinese demand for iron ore that helped pull the Aussie economy through.

While that is unlikely to be the case in 2020, surging demand for iron ore could still help boost economic activity. 

That’s good news for the ASX 200 mining share if demand continues to climb higher.

Other than Fortescue, I also like the look of Coles Group Ltd (ASX: COL) in a downturn.

The Coles share price has rocketed 13.3% higher this year and was one of the gainers in the recent bear market.

ASX 200 supermarket shares did well in March and I could see them experiencing strong demand again if there is another downturn. Those defensive qualities and non-cyclical earnings could definitely make Coles shares worth buying in 2020.

I think National Storage REIT (ASX: NSR) could also perform well if the S&P/ASX 200 Index (ASX: XJO) falls lower.

National Storage derives its income from rent paid by its self-storage unit users. A big economic downturn could hit residential real estate hard and mean more downsizing and ‘rightsizing’ from Aussie households.

This could be good news for the ASX 200 REIT share and its dividends on the back of strong earnings.

Foolish takeaway

No one knows if, or when, the next share market downturn will hit. These are just a few of the ASX 200 shares that I’ve got my eye on if the market turns south.

Of course, I believe it’s essential to consider investing for the long term rather than just trying to capitalise on a downturn. But if you can pick up some defensive shares to diversify your portfolio at decent prices, then I see that as an added bonus.

More reading

• Why you probably won’t buy stocks in the next market crash either
• Comments from CUA brings hope to COVID-19 stricken ASX banking stocks
• Are Coles and Woolworths shares back in the buy zone?
• Tassal and 2 more ASX 200 shares to watch this week
• ASX 200 Weekly Wrap: ASX retreats as confidence wanes

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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.

The post Fortescue Metals and 2 other ASX 200 shares to buy in a recession appeared first on Motley Fool Australia.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Time after time, investors have seen the same scenario play out. A crisis arises, and stocks sell off hard. Things look bad. There doesn’t seem to be any bottom in sight.

Then, all of a sudden, the market starts to rebound. It seems too good to be true, as the situation outside the financial markets still looks sketchy at best. Yet stocks keep rising and rising. Before you know it, a new bull market has started.

That’s what’s happened so far in 2020, and it’s a playbook that experienced investors have seen countless times before. Yet even with all that experience, many of those seasoned investors didn’t pull the trigger to buy more stocks when the market was plunging. A lot of them are kicking themselves right now, because once again, they’ve missed out on a golden opportunity to make what could be some of the most lucrative investments of their careers.

But if you’re angry at yourself for missing out on the March lows, cut yourself some slack. There are very good reasons why it’s so hard to buy stocks during market crashes. Here are two of the biggest.

1. It always feels different this time

It’s easy to say that the next time the stock market crashes for no apparent reason, you’ll be the first to take your cash and buy stocks on the cheap. But when the crash actually comes, the reason behind it always seems to be new. The bearish arguments for what the future will bring seem extremely compelling.

During the financial crisis in 2008 and 2009, there was a very real chance that the global financial system would collapse. It took extraordinary effort to keep it afloat. Those who took the chance and invested optimistically got rewarded, but to say that it was a sure thing is to let hindsight cloud what it was actually like during the crisis.

This year, the pandemic has led to similarly unprecedented actions, including the suspension of nearly all business activity for months. Tens of millions are unemployed. A market crash seemed warranted, and the magnitude of the decline reflected how much concern there was. Now, risk-tolerant investors have once again identified that it’s likely that things will work out and that the drop was exaggerated. However, there’s still no certainty that the pandemic won’t get worse, and that’s kept many people on the sidelines during the ensuing rally.

If you’re going to buy during a market crash, you have to be willing to invest when it feels like the absolutely worst idea in the world. Don’t expect to build a mindset where you’re comfortable or even eager to buy into crashes. That’s a rarity — and it’s why there are so many truly great investors out there.

2. You’ll settle for nothing short of perfect timing

Even if you have the discipline to buy stocks when the market drops, the odds of your picking the absolute bottom are nearly zero. What’s more likely is one of the following outcomes:

• You’ll identify bargains when the market is down 5% or 10%, and use up all your available cash just in time to see stocks drop another 10% or 20%.
• You’ll wait until the market stops falling, and then when share prices start to jump, you’ll nitpick over whether you should really pay 5% or 10% more than you would’ve paid if you’d just picked the day of the market lows to buy. Then, the stock will rise another 10% or 20% while you sit shaking your head.

One strategy to avoid this problem is to buy partial positions rather than investing all at once. You might invest a portion when the market’s down 5%, another when it’s down 10%, and a bigger part when it’s down 20% or 25%. Even then, you’ll sometimes invest all your money before the market hits bottom. But when the market recovers, you’ll see some of those positions turn profitable early on in the rally. You also run the risk of not investing all your cash at bargain prices if the market turns out not to fall that far, but that at least leaves you with opportunities to capitalize on future downturns.

The best way to keep investing during a market crash

Knowing that these influences are out there is helpful. But even knowing them won’t make it any easier to pull the trigger in the next market crash.

Perhaps the easiest way to avoid having to worry too much about investing during crashes is simply to have an automatic investment program. If you take the same amount of money month after month and put it to work in the stock market, then you’ll end up buying more shares of stocks or ETFs  in the months when the market has dropped. That’ll give you an edge — and if it’s automatic, you won’t even have to think about it.

Taking advantage of market crashes is harder than it looks. Rather than responding emotionally, you have to find a way to overcome anxiety and make the choices that seem so obvious when markets aren’t under stress. Do whatever it takes to put yourself in that rational state, and you’ll see your long-term results improve.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Fortescue Metals and 2 other ASX 200 shares to buy in a recession
• Comments from CUA brings hope to COVID-19 stricken ASX banking stocks
• Are Coles and Woolworths shares back in the buy zone?
• Tassal and 2 more ASX 200 shares to watch this week
• ASX 200 Weekly Wrap: ASX retreats as confidence wanes

Dan Caplinger 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.

The post Why you probably won’t buy stocks in the next market crash either appeared first on Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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If you’re looking to invest $10,000 into the share market in July, then I think the two ASX shares listed below could be the ones to buy.

Here’s why I would snap up these ASX shares next month:

Nearmap Ltd (ASX: NEA)

Nearmap is an aerial imagery technology and location data company providing high-resolution aerial maps and 3D maps for governments and businesses. While its performance in FY 2020 has been a touch disappointing because of several churn events, I remain very positive on its long term outlook.

For example, this year the company is aiming to deliver annualised contract value of $102 million to $110 million. This is only a fraction of the global aerial imagery market which is estimated to be worth US$10.1 billion in 2020. And thanks to its high quality software (including its new artificial intelligence product) and geographic expansion opportunities, I believe Nearmap will continue to win a greater share of this fragmented market over the coming years and drive strong recurring revenue growth.

NEXTDC Ltd (ASX: NXT)

Another top option for a $10,000 investment could be NEXTDC. It is a leading and innovative data centre operator which operates a portfolio of world class operations in key locations across Australia. Demand for its services has been growing very strongly in recent years and particularly in 2020 during the pandemic.

This is because the pandemic has accelerated the shift to the cloud and driven very strong demand for data centre capacity. So much so, NEXTDC recently announced the construction of its third data centre in Sydney and brought forward planned capacity additions in other markets. I’m confident there will be more of the same in the coming years, which should drive strong earnings growth as it scales. This could make it a great buy and hold option for investors.

More reading

• Here are the 10 most shorted shares on the ASX
• Do you want to get rich by investing? Then do this
• 3 stellar ASX tech shares to buy in July
• Here are 3 top ASX tech shares to buy with $5,000 today
• How ASX 200 shares like Xero could help you retire early

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia has recommended Nearmap Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 2 quality ASX shares I would buy with $10,000 in July appeared first on Motley Fool Australia.

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