Tag: Motley Fool Australia

Are you looking for better interest rates than those on offer with savings accounts or term deposits? Good news! Despite the pandemic, the Australian share market is still home to a good number of shares offering generous dividends.

Three ASX dividend shares which I think are top options right now are listed below:

BWP Trust (ASX: BWP)

The first dividend share to consider buying is this real estate investment trust. It leases the majority of its portfolio to hardware giant Bunnings, which I feel is a fantastic tenant to have. The benefits of this were demonstrated yesterday when BWP revealed its estimated final distribution for FY 2020. The company intends to declare a 9.27 cents per unit distribution, which will bring its full year distribution to a total of 18.29 cents per unit. Based on its last close price, this equates to a 4.65% distribution yield.

Commonwealth Bank of Australia (ASX: CBA)

I think the pullback in the Commonwealth Bank share price this year has brought it down to an attractive level for a patient investment. Especially as I’m optimistic that the worst is now behind the banks after the Royal Commission, bushfires, and pandemic. This could even mean that a return to growth isn’t too far away for the bank. For now, though, I expect Commonwealth Bank to cut its dividend down to approximately $3.70 per share in FY 2021. This equates to a fully franked forward 5.3% dividend yield.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

Investors that are not in immediate need for dividends might want to consider Sydney Airport. I’m not overly convinced the airport operator will pay a final dividend this year, or if it does it will be significantly reduced. However, as long as Australia avoids a second wave of coronavirus, I believe the domestic tourism market will have recovered enough for Sydney Airport to pay a decent 29 cents per share dividend in FY 2021. If this proves accurate, it will mean a 5% dividend yield next year.

More reading

• Australian businesses are running out of cash
• This top fund manager believes dividend yields are going to 0%. Where should you invest?
• The CBA share price is down 13% this year. Is it a cheap buy?
• My 3 high-yield ASX dividend shares to buy now
• Coronavirus second wave potential could drive investment portfolio changes

Motley Fool contributor James Mickleboro 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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Although the All Ordinaries (ASX: XAO) index is still some way off its highs for the year, this isn’t the case for all constituents of the index.

In fact, three popular ASX tech shares have just hit record highs. Here’s why they are on a high right now:

The Afterpay Ltd (ASX: APT) share price stormed to a new record high of $62.33 on Wednesday. This latest gain was driven by the payment company’s update on its UK business. That update reveals that Afterpay’s UK-based Clearpay business has reached 1 million customers after 12 months in the country. Also supporting its shares this year has been stellar customer and sales growth in the United States and the arrival of Tencent Holdings on its share registry. The latter could be the key to a future launch into the Asia market.

The Pushpay Holdings Ltd (ASX: PPH) share price continued its positive run and hit a new record high of $8.97 yesterday. Investors have been fighting to buy the donor management platform provider’s shares following the release of a very strong full year result in May and a guidance upgrade this month. The latter came just six weeks after first issuing its guidance. Pushpay now expects EBITDA of US$50 million to US$54 million in FY 2021. This compares to its previous guidance of US$48 million to US$53 million and will be double FY 2020’s operating earnings.

The Xero Limited (ASX: XRO) share price reached a record high of $91.94 on Wednesday. Investors have been buying the business and accounting software provider’s shares this year thanks to its strong FY 2020 result. During the 12 months, Xero delivered a 30% increase in operating revenue to NZ$718.2 million and a 29% jump in annualised monthly recurring revenue to NZ$820.6 million. This was driven by increases in both its average revenue per user and total subscriber numbers. The latter rose 26% to 2.285 million thanks to the addition of 467,000 net subscribers during the year. Judging by its strong share price form since then, investors appear confident there will be more of the same over the coming years. And I would have to agree.

More reading

• 3 high quality ASX shares I would buy if there were another market crash
• 3 star ASX shares to buy for the rest of 2020
• ASX 200 finishes higher, Afterpay hits new record
• 3 ASX payments shares that could double your money
• Australian businesses are running out of cash

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 PUSHPAY FPO NZX and Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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) looks set to crash lower today after U.S. stocks were sold off overnight amid concerns over rising COVID-19 cases.

The latest SPI futures are pointing to the ASX 200 index falling 95 points or 1.6% lower at the open.

On Wall Street things were even worse, with the Dow Jones falling 2.7%, the S&P 500 dropping 2.6%, and the Nasdaq index tumbling 2.2% lower.

While I’m optimistic this isn’t the start of larger declines, I feel it is worth considering which shares you would buy if there were another correction.

Here are three top ASX shares I would love to buy at a steep discount to their current share prices:

Afterpay Ltd (ASX: APT)

I have been very impressed with Afterpay’s performance over the last few years and particularly in 2020. Despite the pandemic, the payments company has been growing all its key metrics (such as customer numbers and underlying sales) at an explosive rate. And while I would still buy its shares at the current level for a long term investment, if they were to pull back 20%, it would be a no-brainer buy for me.

Kogan.com Ltd (ASX: KGN)

If there were a sharp pullback in this growing ecommerce company’s share price, I would be queuing up to invest. I believe Kogan has the potential to grow materially over the next decade thanks to the seismic shift to online shopping and its increasingly strong market position. Another positive is that the company has just raised funds for acquisitions. If these are a success, they could help accelerate its growth in the coming years.

Pushpay Holdings Ltd (ASX: PPH)

A final option I would be fighting to buy if there were a market crash is Pushpay. I believe the donor management platform provider is one of the best growth shares on the ASX right now and well-placed to grow its earnings at a rapid rate over the next decade. It is aiming to increase its revenue to US$1 billion in the future. This is many multiples the US$127.5 million operating revenue it recorded in FY 2020.

More reading

• Why Xero and these ASX tech shares just hit record highs
• 3 star ASX shares to buy for the rest of 2020
• ASX 200 finishes higher, Afterpay hits new record
• 3 ASX payments shares that could double your money
• Australian businesses are running out of cash

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 Kogan.com ltd and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Kogan.com ltd and PUSHPAY FPO NZX. 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 ASX shares which could be solid outperformers over the rest of 2020.

The share market has performed strongly since March 2020. The S&P/ASX 200 Index (ASX: XJO) has gone up 31.2% from 23 March 2020.

Some ASX shares don’t look like good value to me any more, particularly with how much COVID-19 uncertainty there still is. 

But there are some shares that I think could be star performers for the rest of 2020:

Share 1: Pushpay Holdings Ltd (ASX: PPH)

Pushpay is an electronic donation business. It facilitates digital giving to not-for-profits. Its main customer base is large and medium US churches. They have large congregations which donate large amounts of money. Pushpay management believe this is a $1 billion revenue opportunity.

Over the past year the company has regularly increased its profit guidance as the business continually under-promises and over-delivers.

In the recent Pushpay annual general meeting the company increased its earnings before interest, tax, depreciation and foreign currency (EBITDAF) to a range of US$50 million to $54 million, up from US$48 million to US$52 million. That means the ASX share is now expecting to approximately double its EBITDAF in FY21. That’s predicted to be a strong year. 

Pushpay’s share price has been a strong performer. Since the start of May 2020 the Pushpay share price is up 121%. I wouldn’t be surprised to see the share price hit $10 by the end of 2020 if social distancing continues in the US due to COVID-19 social distancing.

Share 2: A2 Milk Company Ltd (ASX: A2M)

A2 Milk sells a variety of different dairy products including liquid milk, powdered milk and infant formula.

The company is one of the rare ASX shares that is still reporting growth despite the tough COVID-19 times. A2 Milk continues to increase the footprint of its distribution, particularly in the US. The ongoing pandemic is causing people to stock up on A2 Milk products.  

A2 Milk said it’s expecting FY20 revenue to be in the range of $1.7 billion to $1.75 billion. This would be growth of 30% to 34% on FY19’s revenue.

FY21 could be another bumper year, particularly if the A2 Milk is successful at capturing more market share in the US.

Over the longer-term I believe that this ASX share still has a long growth runway ahead. A2 Milk is expanding into the Canadian market with Agrifoods for the production, distribution, sale and marketing of A2 Milk branded liquid milk. Canada is a sizeable potential market for A2 Milk.

A2 Milk is trading at 27x FY22’s estimated earnings.

Share 3: Vitalharvest Freehold Trust (ASX: VTH)

Agriculture is one of the sectors that could be a good performer even with the ongoing pandemic. People will always want food, particularly quality Aussie-grown fresh food.

Vitalharvest owns a portfolio of berry and citrus farms. But it will soon have a new manager that will pivot the real estate investment trust (REIT) to target real agricultural property assets and assets that are critical to the agricultural supply chain in both Australia and New Zealand.

The ASX share will be renamed Primewest Agri-Chain Fund. The ticker will be changed to ASX:PWA, subject to ASX confirmation.

It will still target farms, but it will also search for processing and manufacturing facilities of food, food and beverage packaging facilities and storage facilities related to food. The potential new assets will be leased on long-term leases with attractive terms.

I think investors will like how Vitalharvest evolves and could start trading at a premium to its net asset value (NAV) in time.

At 31 December 2019 it had a NAV of $0.95. The current share price is trading at a 16% discount to the NAV.

Rural Funds Group (ASX: RFF) has shown how an acquisition strategy can work out as long as they are wise purchases at a good price.

Foolish takeaway

I believe each of these shares have a good chance of beating the market over the rest of 2020, particularly there is another COVID-19-related selloff. Vitalharvest looks like it could be a cheap buy, whilst Pushpay and A2 Milk have excellent international growth credentials. 

More reading

• Why Xero and these ASX tech shares just hit record highs
• 3 high quality ASX shares I would buy if there were another market crash
• 5 things to watch on the ASX 200 on Thursday
• Why the risks of a market correction for the ASX 200 is rising
• 3 of the best ASX growth shares to buy today

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX and RURALFUNDS STAPLED. 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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On Wednesday the S&P/ASX 200 Index (ASX: XJO) continued its positive run and pushed higher again. The benchmark index climbed 0.2% to 5,965.7 points.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 to crash lower.

The ASX 200 looks set to crash lower on Thursday after a very poor night of trade on Wall Street. According to the latest SPI futures, the benchmark index is poised to drop 95 points or 1.6% lower at the open. On Wall Street the Dow Jones sank 2.7%, the S&P 500 fell 2.6%, and the Nasdaq index tumbled 2.2%. Investors were selling U.S. stocks amid concerns over a spike in coronavirus cases.

Oil prices sink lower.

Record U.S. crude inventories and pandemic resurgence concerns have sent oil prices crashing lower overnight. This could weigh on the likes of Oil Search Ltd (ASX: OSH) and Santos Ltd (ASX: STO) on Thursday. According to Bloomberg, the WTI crude oil price is down 5.6% to US$38.13 a barrel and the Brent crude oil price is 5.3% lower to US$40.37 a barrel.

Qantas $1 billion equity raising.

The Qantas Airways Limited (ASX: QAN) share price could be placed in a trading halt today. Last night the AFR speculated that the airline operator has called in bankers and could be about to launch a $1 billion equity raising. This would be the first time during the pandemic that Qantas has raised funds this way.

Gold price softens.

Gold miners such as Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could take a tumble today after the gold price fell despite the market volatility. According to CNBC, the spot gold price is down 0.4% to US$1,774.50 an ounce overnight. Investors appear to have rotated into cash assets.

Sonic Healthcare given buy rating.

The Sonic Healthcare Limited (ASX: SHL) share price was a strong performer on Wednesday but could still be heading higher from here. According to analysts at Goldman Sachs, they believe the healthcare company is a buy with a $34.50 price target. This is almost 14% higher than its last close price. The broker was pleased to see the company reinstate guidance well ahead of consensus estimates.

More reading

• Why the risks of a market correction for the ASX 200 is rising
• Should you wait for another market crash to invest in ASX shares?
• ASX 200 finishes higher, Afterpay hits new record
• The latest ASX 200 stocks to be slapped with a broker downgrade
• 3 ASX shares I’d buy if the market crashes again

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The De Grey Mining Limited (ASX: DEG) share price was up 25% on Wednesday, hitting a 9-year high of 84 cents. This came 2 days after the company announced positive drilling results at its Hemi site in Western Australia. 

What were the results?

The drilling result included near-surface, broad, and high grades intersected at Aquila. 

At another drilling location 400m West of Aquila, the company identified near-surface gold in aircore drilling. Drilling results included 33m @ 1.5g/t Au from 64m and 20m @ 0.9g/t Au from 46m. Follow-up drilling to test further depth and lateral extensions at Aquila has also commenced with 6 drill rigs now operating. 

De Grey Exploration Manager, Phil Tornatora, said:

“The Aquila style gold mineralisation identified in highly altered intrusion 400m to the West is an exciting and significant development as it opens up the overall strike potential of the deposit. The broad high grade mineralisation announced today is particularly encouraging demonstrating the potential to rapidly add to Aquila’s gold endowment.

“We are now targeting diamond drilling to extend Aquila to at least 300m below surface along the entire strike of the deposit. The potential to extend Aquila a further 400m to the West under an interpreted shallow veneer of sediments is an exciting development and will also be targeted. Similiar potential remains to be tested to the East under the sediment contact.

“Diamond core assays of depth extensions below the recent high grade intercepts are in the lab with results expected shortly. Stepout extension diamond drilling is on-going with a further 8 pre-collars already completed. A second RC rig arriving next week will help accelerate drilling on all mineralised zones at Hemi.”

The De Grey Mining share price

The De Grey Mining share price is up a massive 2041% since its 52-week low of .039 cents. Its share price has returned 1506% since the beginning of the year. The De Grey share price has almost doubled in June from 44 cents at the beginning of June to 84 cents on Wednesday.

More reading

• Why the risks of a market correction for the ASX 200 is rising
• PharmAust share price soars 22% on shareholder update
• 3 of the best ASX growth shares to buy today
• Should you wait for another market crash to invest in ASX shares?
• ASX 200 finishes higher, Afterpay hits new record

Motley Fool contributor Chris Chitty 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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ASX investors may feel like they are stuck in no-man’s land! The S&P/ASX 200 Index (Index:^AXJO) is struggling to convincingly break above 6,000 but bargain hunters won’t let the market fall too much either.

It’s a nail biting time as we are torn between hope that the worst of the economic impact from COVID-19 is behind us and fear that the share market is caught in irrational exuberance.  

While I am siding the bulls in this Mexican standoff, Macquarie Group Ltd (ASX: MQG) is warning that the risks of a market correction are rising.

Swamped by a second wave

There are three reasons why the broker believes the S&P 500 will fall, which will likely pull our market down too.

First is the prospect of a second wave of coronavirus infections. Macquarie doesn’t think the chance of a significant rise in COVID-19 cases is very high and a second wave of shutdowns is unlikely.

But it did note that Google data points to an increasing risk of this happening with searches for COVID-19 on the rise. There is a 93% correlation between such searches and the S&P 500, although this correlation has been weaker in more recent times.

Liquidity risk

The second factor is the US Federal Reserve (Fed), which recently withdrew liquidity from the market.

“The Fed’s balance sheet contracted last week, driven by reductions in Repo and Swaps,” said Macquarie.

“As both were introduced to ensure smooth market functioning, the market has been less concerned by these falls.

“But when Fed liquidity has been a key support for equities, further shrinking of the Fed’s balance sheet would add to the risk of a correction.”

Optimistic valuations

Lastly, valuations are causing concern to the broker who noted that the forward price-earnings (P/E) for the ASX 200 is 19.3x. This is 3% above its pre-pandemic high.

Even if you looked out the following year, the forecast P/E dips to 17 times, and that’s a mere 4% below the high before COVID-19.

“High valuations alone do not cause a correction, but they do make the market more susceptible to negative surprises,” added Macquarie.

“Too rapid withdrawal of fiscal stimulus would be a negative surprise for the market.”

Reasons to be optimistic

The warning from the broker isn’t what many investors want to hear, but there is a silver lining. If we do experience a big pullback, the fall may not be as bad as the bears are anticipating.

The broker estimates that the S&P 500 would fall by 6% to 7% but the ASX will not fall as much as it’s managing the coronavirus risks better.

Further, the earnings per share (EPS) rebound is going better than what many sceptics expect.

“Net EPS revisions have shown a V-shaped recovery, supporting stocks. From a low of nearly 80% net EPS downgrades on April 22, net EPS downgrades were down to 15% on June 22,” said Macquarie.

This means the August profit reporting season may not turn out to be a disaster, as what many fear. Macquarie’s estimates suggest net revisions could continue to improve in the upcoming results season.

All the more reason to buy the dips!

More reading

• Should you wait for another market crash to invest in ASX shares?
• ASX 200 finishes higher, Afterpay hits new record
• The latest ASX 200 stocks to be slapped with a broker downgrade
• 3 ASX shares I’d buy if the market crashes again
• Is the share market facing another February 2020 moment?

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie 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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The PharmAust Limited (ASX: PAA) share price had an impressive run on the market today, finishing 22.22% higher at 16.5 cents.

PharmAust is a clinical-stage oncology company that is developing targeted cancer therapeutics for humans and animals. 

The company’s lead drug candidate is monepantel (MPL), a novel inhibitor of the mTOR pathway which is a key driver of cancer.

Today’s rise comes as the company released a shareholder update, which summarised recent developments:

MPL shows “remarkable” results against COVID-19

In April, PharmAust began working with the Walter and Eliza Hall Institute of Medical Research to investigate the effects of MPL and monepantel sulfone (MPLS) on the SARS-CoV-2 virus that causes COVID-19 infections.

As disclosed in an ASX release on 18 June 2020, repeat experiments demonstrated that “infectivity of SARS-CoV-2 virus particles can be suppressed by up to 95% in cell structures by either MPL or MPLS”.

Commenting on the results, Walter and Eliza Hall Institute researcher Professor Marc Pellegrini said:

“These exciting repeat results validate the results of the initial test and form strong grounds for progressing the drug to the next step. Demonstrating twice, that infectivity of SARS-CoV-2 virus particles can be suppressed by up to approximately 95% in cell cultures is a remarkable outcome.”

As for next steps, PharmAust will prepare an executive summary and investigator’s brochure to permit discussions with clinicians about a Phase I trial. The trial would involve a small number of human patients to test the efficacy of MPL as a treatment for COVID-19.

MPL canine trial achieves successful anti-cancer outcome

The next section of today’s shareholder update relates to a canine trial. 

As announced on 12 May, PharmAust achieved a successful outcome in the veterinary Phase II clinical trial investigating the effects of MPL on dogs with treatment-naïve B cell lymphoma.

The company advised today that a dossier will be presented to the MPL compound owner and option partner, Vet Major, in July 2020. This will provide Vet Major with the opportunity to activate its 6-month exclusive option over the licensing of MPL for veterinary uses.

Phase II human cancer trial

PharmAust also confirmed today it continues to make progress towards the evaluation of MPL in human trials.

The company completed a Phase I clinical trial at the Royal Adelaide Hospital in 2015.

PharmAust has since conducted further tablet formulation and pharmacokinetic studies. It has also investigated changes in tablet size to enable more specific targeting of calculated optimum dose levels.

With this, the company is aiming to conduct a third GMP-grade manufacture program for MPL tablets in or around Q3 2020 to cater to future human trials.

PharmAust is also seeking to identify a suitable clinical oncology unit to evaluate the new MPL tablet in humans in a Phase II trial.

Epichem

Finally, PharmAust provided an update on its wholly-owned subsidiary, Epichem. 

Epichem is a profitable medicinal and synthetic chemistry company with expertise and capacity in the field of drug development, discovery, and design.

Today, PharmAust revealed that Epichem is on track to deliver $3.46 million revenue in FY20. This is an increase on the $3.34 million projected revenue forecast provided back in January.

After today’s jump, PharmAust’s market capitalisation is sitting a touch under $50 million. If you’d rather invest in much larger and more liquid companies, check out the ASX growth shares in the free report below.

More reading

• 3 of the best ASX growth shares to buy today
• Should you wait for another market crash to invest in ASX shares?
• ASX 200 finishes higher, Afterpay hits new record
• Bellevue Gold share price hits record high on metallurgical testing
• 3 ASX payments shares that could double your money

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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There certainly are a large number of growth shares for investors to choose from on the ASX.

Three which I think are among the best the local market has on offer are named below. Here’s why I would buy them:

a2 Milk Company Ltd (ASX: A2M)

I think a2 Milk Company is a growth share to buy. It has been growing at a very strong rate over the last few years and looks well-positioned to continue this positive trend for some time to come. This is thanks to the strong demand it continues to experience for its infant formula products and its expanding fresh milk footprint. In addition to this, there is speculation that a2 Milk Company could be looking to put its sizeable cash balance to work. This could mean an earnings accretive acquisition will be coming in the near future. Alternatively, there is the option for a2 Milk Company to bolster its portfolio with new product launches.

Appen Ltd (ASX: APX)

Another growth share I would buy is Appen. It is a leading developer of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). Appen prepares the data for the models of some of the world’s biggest tech companies such as Microsoft and Facebook. I believe these high quality customers are a testament to the quality of its service. Pleasingly, given the importance of AI and machine learning for businesses, I expect demand for its services to remain strong for a long time to come.

Aristocrat Leisure Limited (ASX: ALL)

This gaming technology company is another growth share which I think could provide strong returns for investors in the future.  While Aristocrat’s performance has been impacted greatly by the closure of casinos, I believe it will bounce back strongly when the crisis passes. This is thanks to its industry-leading poker machines and its growing digital business. The latter has been a big winner from the pandemic and is generating material recurring revenues thanks to increased mobile gaming.

More reading

• Australian businesses are running out of cash
• Here are 3 top ASX tech shares to buy with $5,000 today
• The Appen share price just hit a record high: Is it too late to invest?
• Is the share market facing another February 2020 moment?
• Where to invest $10,000 in ASX 200 shares for 2030

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk and Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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As most of us would be aware of by now, the S&P/ASX 200 Index (INDEXASX: XJO) had a fairly nasty market crash this year. Between 20 February and 23 March, the ASX 200 fell by more than 36%. It was the worst ASX crash since the global financial crisis and the fastest fall for the ASX 200 in history.

But since then, ASX 200 shares have rebounded strongly. Since 23 March, the ASX 200 has risen more than 30% and is now sitting 12.5% below where it started the year.

Now, before the March crash, there were a lot of investors (myself included) who thought ASX shares may have run away somewhat and entered ‘overvalued’ territory. The obvious solution to this problem was to stack cash in anticipation of lower share prices in the future.

But the March crash was so rapid that it took many investors (again, myself included) off guard. I managed to buy some ASX shares for some great prices, but in hindsight, I wasn’t able to take advantage of the situation as much as I would have liked to.

So that leads me to the question: should we always wait for a crash to buy a decent amount of shares? Or is this a fool’s game (and not the good kind of Fool).

Should we wait for an ASX 200 market crash?

In theory, it’s optimal to buy shares at the cheapest prices you can. In practice, none of us knows when this will occur. If you missed the bottom of the market during the crash in 2008–09, you would have had to wait until March 2020 for another real crash to take advantage of. That’s 11 long years to wait and a lot of gains to miss out on.

So what is an investor to do? Well, you can always have a foot in both camps; black and blue. I personally like to keep between 10-30% of my portfolio in cash at all times. If I get to the 30% threshold, I’ll usually start dollar-cost averaging into ASX shares until the 30% level is reached again or there is a significant buying opportunity (like we saw in March). If I don’t get to 30% I’ll just keep piling up cash and dividends until I do.

Now, everyone will have a different way of addressing this problem. You may like my way or find your own way better for your particular temperament. But, as long as you have a strategy that won’t leave you wanting something you don’t have if, and when, the markets do crash, you’ll be just fine.

More reading

• ASX 200 finishes higher, Afterpay hits new record
• The latest ASX 200 stocks to be slapped with a broker downgrade
• 3 ASX shares I’d buy if the market crashes again
• Is the share market facing another February 2020 moment?
• Can the Newcrest share price crest to new highs?

Motley Fool contributor Sebastian Bowen 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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