Tag: Motley Fool Australia

While the Australian economy is faring a lot better than many expected during the pandemic, I’m still of the belief that rates will remain lower for longer.

Barring a spike in inflation, I suspect the Reserve Bank will keep rates at 0.25% until at least 2022, but possibly longer.

In light of this, I think dividend shares remain the best way to generate a passive income. But which dividend shares should you buy? Three that I rate highly are listed below:

BHP Group Ltd (ASX: BHP)

The first dividend share I would consider buying is BHP. I believe the Big Australian would be a top option for investors due to its world class operations and favourable commodity prices. This is particularly the case with its iron ore operations, which are benefitting greatly from a surge in the price of the steel making ingredient. I expect BHP to generate significant free cash flows in the near term. And with its balance sheet in such a strong position, the majority of this free cash flow is likely to be returned to shareholders. I estimate that the mining giant’s shares currently provide investors with a forward fully franked ~5% dividend yield.

VanEck Vectors Australian Banks ETF (ASX: MVB)

Another dividend share to consider is the VanEck Vectors Australian Banks exchange traded fund. I think it is a great option for investors that are looking to invest in the banking sector, but aren’t sure which bank to buy. This is because this exchange traded fund gives investors exposure to all of the big four banks. It is also invested in Australia’s regional banks and investment bank Macquarie Group Ltd (ASX: MQG). Predicting the dividends the banks will pay in FY 2021 is tricky, but I would expect a yield of at least 5% from this exchange traded fund.

Wesfarmers Ltd (ASX: WES)

A final dividend share to consider buying is Wesfarmers. I’m a big fan of the conglomerate due to its strong businesses and their positive long term outlooks. Combined with its mountain of cash, which is likely to be used for acquisitions in the near future, I believe Wesfarmers is well-placed to grow its earnings and dividends at a solid rate over the next decade. This could make it a great long term option. At present I estimate that its shares offer a fully franked 3.7% FY 2021 dividend yield.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Want high-paying dividends? Try Wesfarmers shares and these 2 other ASX options
• Where I’d invest $2,500 in ASX shares today
• Top brokers name 3 ASX 200 shares to buy next week
• How to replace your entire wage with dividends

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of Wesfarmers 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.

The post 3 high quality ASX dividend shares you can buy today appeared first on Motley Fool Australia.

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At the start of each week I like to look at ASIC’s short position report in order to find out which shares are being targeted by short sellers.

This is because I believe it is worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Myer Holdings Ltd (ASX: MYR) continues to be the most shorted share on the ASX despite another reduction in its short interest to 13.6%. It appears as though traders believe the pandemic has hastened the structural decline of department stores.
• Speedcast International Ltd (ASX: SDA) has short interest of 13.2%. This communications satellite technology provider’s shares remain suspended while it declares itself bankrupt.
• Super Retail Group Ltd (ASX: SUL) has seen its short interest remain flat at 10.9%. A number of this retail group’s brands look likely to have been impacted greatly by the pandemic. This could mean soft results and lower dividends in FY 2020 and FY 2021.
• Galaxy Resources Limited (ASX: GXY) has seen its short interest slide to 10.7%. Short sellers were closing their positions despite Chinese lithium prices tumbling to their lowest levels of the year last week.
• Webjet Limited (ASX: WEB) has jumped into the top ten with short interest of 9.7%. Traders may believe the online travel agent’s shares are overvalued after a strong rebound. Especially given the dilution caused by its capital raising.
• Orocobre Limited (ASX: ORE) has seen its short interest slide to 9.4%. This lithium miner’s shares were strong performers last week, possibly due to short sellers closing positions. Its shares have been hammered in recent times due to a collapse in lithium prices.
• Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest rise to 9.3%. Traders may be targeting the biopharmaceutical company on the belief that its outlook doesn’t justify the lofty valuation its shares trade on.
• Nearmap Ltd (ASX: NEA) has seen its short interest edge higher to 9.3%. Unfortunately for short sellers, this aerial imagery technology company’s shares have been racing higher in recent weeks after a positive market update.
• Pilbara Mineral Ltd (ASX: PLS) has short interest of 9.2%, which is down slightly week on week. Pilbara is another lithium miner which experienced a decline in short interest last week. Short sellers may believe the worst is over for the industry.
• JB Hi-Fi Limited (ASX: JBH) has seen its short interest fall week on week to 9%. It appears as though some short sellers have been closing positions in response to the retailer’s solid sales performance during the pandemic.

More reading

• 3 quality ASX 200 shares to buy and hold until at least 2030
• These were the best performers on the ASX 200 last week
• Will the Qantas share price crash back to Earth?
• ASX 200 rises 0.8%, travel shares fly higher
• The latest ASX 200 stocks to be upgraded to “buy” amid the recession

James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited and Webjet 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 These are the 10 most shorted ASX shares appeared first on Motley Fool Australia.

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On Friday the S&P/ASX 200 Index (ASX: XJO) finished a very positive week with a small gain. The benchmark index rose 0.1% to 5,998.7 points.

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

ASX 200 to surge higher.

The ASX 200 looks set to start the week with a very strong gain after U.S. markets charged notably higher on Friday and Monday night. According to the latest SPI futures, the benchmark index is expected to open the week 147 points or 2.45% higher this morning. Overnight on Wall Street the Dow Jones jumped 1.7%, the S&P 500 stormed 1.2% higher, and the Nasdaq index rose 1.1%. The Dow Jones is up 4.9% over the last two trading days after stronger than expected U.S. jobs data.

Oil prices tumble lower.

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could come under pressure after oil prices tumbled lower overnight. According to Bloomberg, the WTI crude oil price fell 3.4% to US$38.21 a barrel and the Brent crude oil price dropped 3.5% to US$40.79 a barrel. Traders were selling oil after Saudi Arabia revealed that it would not extend its production cuts.

Free childcare to end next month.

The G8 Education Ltd (ASX: GEM) share price will be on watch on Tuesday after the Federal Government revealed plans to end its free childcare scheme in July. The government also intends to end the JobKeeper payment for workers in the sector. It will reintroduce the Child Care Subsidy in its place.

Gold price higher.

Gold miners including Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) will be on watch after a mixed couple of trading days. After tumbling notably lower on Friday, the gold price rebounded on Monday night. According to CNBC, the spot gold price rose 1.35% to US$1,705.40 an ounce.

Iron ore miners on watch.

BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG), and Rio Tinto Limited (ASX: RIO) could push higher again today after iron ore prices jumped. The spot iron ore price stormed over 5% on Monday and is now up to US$105 a tonne mark. All three of these miners are generating significant free cash flows from their operations with prices at these levels.

More reading

• 2 strong ASX dividend shares to bolster your income
• Want high-paying dividends? Try Wesfarmers shares and these 2 other ASX options
• How to build a $20,000 passive income with ASX shares
• Where I’d invest $2,500 in ASX shares today
• Top brokers name 3 ASX 200 shares to buy next week

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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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.

Want to double your money? There’s no shortage of suggestions for how to do that out there. Some will urge you to gamble, invest with borrowed money, chase high-flying stocks, try to time the market, or speculate in commodities and futures. Others will suggest the lottery or penny stocks or other ways that are so risky you’ll likely lose money.

If you really want to double your money, though, and do it with your precious, hard-earned dollars, it’s best to stick with unassailable methods.

The Rule of 72

It’s hard to argue with math, and there’s a simple mathematical trick that can help you figure out how long it will take to double your money — the Rule of 72. Per the rule, if you divide 72 by an annual growth (or interest) rate, you’ll get the number of years it will take to double your money.

If you expect a 10% annual return, for instance, divide 72 by 10 and you’ll see that it’ll take about 7.2 years to double your money. The rule works well, except when you’re dealing with extreme numbers. An expected 72% growth rate might suggest doubling in a single year, but that would take a 100% growth rate. Check out the table below, to see the rule in action.

Growth Rate	Years to Double
2%	36.0
3%	24.0
5%	14.4
7%	10.3
10%	7.2
12%	6.0
15%	4.8
20%	3.6
25%	2.9

Data source: Calculations by author.

Basically, though, doubling your money, or increasing it to any degree, depends on three simple factors:

• How much money you invest
• How long it has to grow
• How rapidly it will grow

By using any or all of those levers, you can influence how your money grows. Let’s take a closer look at how you can adjust those levers:

No. 1: Save and invest more

It’s obvious, but of course, in general, the more you invest, the more you can amass. The table below shows the different sums you might amass over various periods by investing $5,000, $10,000, or $15,000 annually:

Growing at 8% for	$5,000 invested annually	$10,000 invested annually	$15,000 invested annually
5 years	$31,680	$63,359	$95,039
10 years	$78,227	$156,455	$234,682
15 years	$146,621	$293,243	$439,864
20 years	$247,115	$494,229	$741,344
25 years	$394,772	$789,544	$1,184,316
30 years	$611,729	$1,223,459	$1,835,188
35 years	$930,511	$1,861,021	$2,791,532
40 years	$1,398,905	$2,797,810	$4,196,716

Data source: Calculations by author.

Many of us can’t just sock away $15,000 or more each year, but you can still probably invest more than you’re currently investing, and you can aim to increase your annual contributions to various savings accounts from year to year.

If you want to get aggressive about it, which is smart for many of us, especially those who have started late or who want to try to retire early, find lots of ways to spend less and consider picking up a side gig to earn a little more — all to facilitate more investments.

No. 2: Invest for a longer period

The same table, above, shows the incredible power of time. Doubling the number of years in which your money can grow is likely to more than double how much you amass, thanks to the magic of compounding.

If you’re not a spring chicken anymore, you may not have 25 or 35 years before retirement, but you can still amp up your savings by saving more each year — and/or boosting your growth rate.

No. 3: Earn a greater rate of return

The growth rate is the last lever you can tweak. You can’t simply produce a high growth rate, though. In general, risk and return are interrelated, with low-risk investments (savings accounts, government bonds) tending to offer low growth rates and high-risk propositions (junk bonds, lottery tickets) offering high (possible) rates.

Consider aiming for solid middle ground, by focusing much of your long-term money on stocks. Over long periods, stocks have handily outperformed bonds, and the stock market has averaged annual returns of close to 10% over long periods. You can hope to do better by carefully selecting a range of individual stocks, but that takes skill and knowledge and a rational temperament. For most of us, it’s hard to beat a simple low-fee broad-market index fund or two, such as one that tracks the S&P 500.

The table below shows what a difference the growth rate makes, for annual investments of $10,000:

Growing for	Growing at 6%	Growing at 8%	Growing at 10%
10 years	$139,716	$156,455	$175,312
15 years	$246,725	$293,243	$349,497
20 years	$389,927	$494,229	$630,025
25 years	$581,564	$789,544	$1.1 million
30 years	$838,017	$1.2 million	$1.8 million
35 years	$1.2 million	$1.9 million	$3.0 million
40 years	$1.6 million	$2.8 million	$4.9 million

Data source: Calculations by author.

The tables above not only show how you can double your money, but given enough time and a solid rate of growth, how you might triple or quadruple it, as well!

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

More reading

• 3 quality ASX 200 shares to buy and hold until at least 2030
• Why I’d buy Appen and these ASX growth shares for the 2020s
• This Is How Warren Buffett Says to Invest
• ASX shares could be the best way to grow your wealth in 2020
• 2 UK shares to diversify your portfolio

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 3 Investing Tricks to Double Your Money 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 take advantage of compounding with buy and hold investments, then I think the three ASX 200 shares listed below are worth considering.

I believe all three shares are well-placed to grow their earnings at a solid rate over the next decade. This could ultimately lead to their shares providing investors with very strong returns over the period.

Here’s why I like these ASX 200 shares:

Cochlear Limited (ASX: COH)

I think that Cochlear would be a great option for investors. I continue to believe the hearing solutions company is among the best buy and hold options on the local share market. This is thanks to it being perfectly positioned for strong long term growth thanks to the ageing populations tailwind. By 2050 there are forecast to be 1.5 billion people over the aged of 65. This will be almost triple the number of over 65s in 2010. I expect this to underpin a sustained increase in demand for its cochlear implantable devices over the next few decades.

Collins Foods Ltd (ASX: CKF)

Another option to consider buying Collins Foods. It is one of the region’s largest quick service restaurant operators. It has 240 KFC stores in Australia and 41 KFC stores in Europe. The company also has a handful of Taco Bell restaurants in Australia and 75 franchised Sizzler restaurants across Asia. While I see a lot of promise in the Taco Bell brand, I believe its European operations will be the key driver of growth in the future. I see now reason why one day the company won’t have more restaurants on this continent than it does in Australia. Especially given the underpenetration of KFC in the European market.

Nearmap Ltd (ASX: NEA)

A final option to consider buying is Nearmap. It is an aerial imagery technology and location data company with operations in the ANZ and North American market. I believe it is a great long term option for investors due to its sizeable opportunity in the markets it operates in. Given the quality of its offering, I expect the company to continue to win market share over the next decade. This should drive strong recurring revenues. Another positive is that Nearmap has the option to expand its coverage into other countries in the future to increase its target addressable market and accelerate its growth.

More reading

• ASX shares could be the best way to grow your wealth in 2020
• 10 ASX 200 shares that are fit for the Queen
• Is the Macquarie share price the best ASX bank to buy?
• 3 ASX 200 blue chip dividend shares to buy in June
• 3 top ASX 200 shares to buy next week

James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and Nearmap Ltd. The Motley Fool Australia has recommended Cochlear Ltd., Collins Foods Limited, and 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.

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If you’re looking to make investments in a collection of ASX growth shares, then the three listed below could be worth considering.

I believe all three growth shares have the potential to deliver strong returns for investors over the next decade. Here’s why I would buy them next week:

Appen Ltd (ASX: APX)

I think Appen is one of the best growth shares on the ASX. It has been growing its earnings at a very strong rate over the last few years thanks to the increasing demand for its services due to the growing importance of artificial intelligence (AI) and machine learning. Appen prepares the data that goes into AI and machine learning models, which is a vital part of the process. And with both these markets expected to grow materially over the next decade, I think Appen is well-placed to continue its strong form for some time to come.

Bravura Solutions Ltd (ASX: BVS)

Bravura Solutions is another growth share to consider buying. It is a financial technology company which provides software and services to the wealth management and funds administration industries. The solutions are used by some of the biggest financial institutions in the world. Thanks to the stickiness of its products, their large market opportunities, and a couple of key recent acquisitions, I believe Bravura can continue growing at a strong rate for many years to come.

Kogan.com Ltd (ASX: KGN)

A final growth share to consider buying is Kogan. This ecommerce company has really caught the eye this year after delivering explosive sales, earnings, and customer growth during the pandemic. While this growth is likely to moderate as lockdowns ease, I believe Kogan remains well-positioned to grow at a strong rate over the next decade. Especially given how the crisis appears to have accelerated the shift to online shopping.

More reading

• How I would invest $50,000 into ASX shares right now
• Could these ASX shares be the future dividend stars that make you rich?
• 10 ASX 200 shares that are fit for the Queen
• Could these sensational ASX shares help you beat the market?
• What ASX shares should you invest in during a bull market?

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 Bravura Solutions Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended Bravura Solutions 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 Why I’d buy Appen and these ASX growth shares for the 2020s 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.

Warren Buffett, famous investor and fourth-richest person in the world, has some investing advice for you. And it doesn’t involve ratios, valuations, or any nonsensical acronyms that have something to do with cash flow. Nope, Buffett’s recommendation is far more straightforward: He says you should be buying index funds.

Beating the market versus moving with the market

An index fund is a mutual fund or exchange-traded fund (ETF) that mimics the behavior of an underlying index. When you invest in index funds, your goal is to keep pace with the market. That’s very different from the approach taken by stock pickers and active mutual fund managers — people like Buffett himself. Stock pickers don’t want to ride along with the market; they want to beat the market.

The trouble is, few people can consistently pull that off. Buffett, as CEO of Berkshire Hathaway, had an amazing run of outperforming the S&P 500, but even he’s been less successful recently. And according to S&P Indices Versus Active (SPIVA), 80.6% of actively managed large-cap mutual funds underperformed the S&P 500 over the past five years. In other words, beating the market is hard for anyone — let alone the part-time investor.

As an investor, you have to choose your battles. You can try to beat the market by picking stocks or by investing in actively managed funds. Unfortunately, it’s likely you or your fund manager will underperform. Alternatively, you can opt for moving with the market via index funds. Considering that the S&P 500 has shown an average annual growth of 7% after inflation since its inception, riding those coattails isn’t a bad deal at all.

Timing is important

As the first quarter of 2020 has reminded us, the long-term trends of the S&P 500 can be quite different from what’s happening in the market right now. The average growth may be 7%, but in any given year, the index might be up 30%, down 30%, or somewhere in between.

When you invest in an S&P 500 index fund, you’re signing up for the good and the bad. That’s why it’s important to invest only in funds you don’t need for seven years or more. That way, you can ride out the inevitable downturns calmly, without having to liquidate at a low point.

Why fund performance won’t exactly match the index

Take a look at a handful of S&P 500 index funds and you’ll quickly see that they don’t track exactly with their index. There are several reasons for this. Some funds achieve index-level performance by replicating the index exactly; others use a representative sample that behaves like the index, often to keep costs low. Changes in the composition of the index also have to be replicated by the fund after the fact, which can affect performance. But the biggest drag on the fund’s performance relative to the index is the fund’s expense ratio.

Expense ratio is the fund’s operating costs as a percentage of total assets. Since fund expenses do reduce shareholder returns, you should make a practice of choosing index funds with very low expense ratios. That essentially allows the fund to produce returns that are more in line with the underlying index. 

You can diversify with multiple funds

Buffett is a proponent of S&P 500 index funds in particular, because the portfolios are naturally diversified across 500 large, reputable companies. But holding only a single, large-cap equity fund may not match your risk tolerance or timeline. That’s a problem easily solved, however. You can tailor the risk level in your portfolio by holding — you guessed it — other index funds. For example, you could add a bond index fund to reduce your reliance on equities or an international equity index fund to reduce your reliance on the one economy.

Rebalance to manage risk

If you do hold multiple index funds, pay attention to how the composition of your portfolio changes over time. Generally speaking, your equity funds will grow in value, while your bond funds will throw off cash, but remain fairly stable. Since equities are riskier than bonds, letting that trend go unchecked will add risk to your portfolio.

The solution is to rebalance your holdings every year. Rebalancing is the process of adjusting your portfolio composition back to where you want it to be. You’d do this by selling off some of the funds that are over-weighted and using the proceeds to buy funds that are underweighted. In practice, this usually means reducing your equity positions and increasing your bond positions.

Index funds are simple and reliable

You don’t have to spend your days poring over financial ratios and earnings reports to make money in the stock market. Index fund investing is an alternative that’s simple, accessible, and — importantly — reliable over the long term. In Buffett’s own words, “I think it’s the thing that makes the most sense practically all of the time, and that is to consistently buy an S&P 500 low-cost index fund.”

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

More reading

• ASX shares could be the best way to grow your wealth in 2020
• 2 UK shares to diversify your portfolio
• Worried Another Stock Market Crash Is Coming? 3 Things You Should Do Right Now
• How I would invest $50,000 into ASX shares right now
• Could these ASX shares be the future dividend stars that make you rich?

Catherine Brock 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 This Is How Warren Buffett Says to Invest 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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I think that ASX shares could be the best way to grow your wealth in 2020.

When you look at S&P/ASX 200 Index (ASX: XJO) you can see that it’s still down by around 16% from the pre-coronavirus high. So when you think about how low the interest rate now is and the long-term earnings, this valuation for the ASX share market doesn’t look bad.

I’m not as confident about the US share market considering a second wave could shut down parts of the country again.

When you look at the other investment options, I think there’s only one winner – shares. Bonds and cash have very little yields. Property values and the rental income looks dicey at the moment. Who knows which way gold will go?

Businesses have the ability to keep growing profit. ASX shares are investing for growth and paying good dividends. It’s this power of business that allows for great compounding of your wealth. Some businesses are able to earn more than 20% on the profit that is retained in the business. 

Some ASX shares like Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) have stormed to all-time highs recently. I’m not so sure about investing in the buy now, pay later sector right now. It’s running very hot, but perhaps it’s justified with how COVID-19 is changing the retail landscape. 

What ASX shares I think look good value

There are plenty of other ASX shares where the share price is lower but they still have very attractive long-term futures. I’m thinking of shares like CSL Limited (ASX: CSL), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Brickworks Limited (ASX: BKW) and City Chic Collective Ltd (ASX: CCX).

I’d also be interested in some ETFs like Betashares FTSE 100 ETF (ASX: F100) and iShares S&P Global 100 ETF (ASX: IOO).

More reading

• 2 UK shares to diversify your portfolio
• Could these ASX shares be the future dividend stars that make you rich?
• 10 ASX 200 shares that are fit for the Queen
• Is the Macquarie share price the best ASX bank to buy?
• 3 ASX 200 blue chip dividend shares to buy in June

Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO, CSL Ltd., and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company 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.

The post ASX shares could be the best way to grow your wealth in 2020 appeared first on Motley Fool Australia.

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UK shares are a good option to consider to diversify your portfolio. I think the two picks in this article would be fit for the Queen’s portfolio.

We can thank the UK for today’s public holiday. So in honour of that, I thought I’d share two of my favourite UK share picks that we can buy on the ASX:

Betashares FTSE 100 ETF (ASX: F100)

I think the best way to invest in UK shares is with this exchange-traded fund (ETF). This is offered by BetaShares. It gives exposure to the biggest 100 businesses on the London Stock Exchange.

Some of the biggest share holdings are Astrazeneca, HSBC, GlaxoSmithKline, British American Tobacco, BP, Diageo, Royal Dutch Shell, Rio Tinto, Unilever and Reckitt Benckiser.

One of the great things about UK shares is that they are pretty similar to Australian businesses. The UK also has similar rules of law.

Many of the names I mentioned are global businesses with long histories of earnings. Many of them also have attractive dividend payout policies.

UK shares can offer very good diversification to Australian shares. At the end of April 2020 the ETF had a trailing dividend yield of 5.86%, which looked pretty good in this period of very low interest rates.

Virgin Money UK Plc (ASX: VUK)

This UK share was formed from a combination of CYBG and Virgin Money. The idea is that the combined business will have strong cost synergies and be able to offer clients a better service.

The share price has been very volatile over the past year with Brexit fear, the Brexit solution and now the coronavirus economic damage. Since 21 February 2020, the Virgin Money UK share price has fallen by almost 50%.

UK shares are justifiably down because the coronavirus has spread far more in the UK than in Australia, causing more economic pain. The UK is being rightfully more cautious about opening up.

This could be a longer-term opportunity to buy this UK bank whilst the price is low. I don’t expect a quick recovery, but over the next few years it could make solid returns.

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Motley Fool contributor Tristan Harrison 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 2 UK shares to diversify your portfolio 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.

You’re not alone if you think another stock market crash is on the way. Over half of CFOs expect the Dow Jones Industrial Average will plunge as low as it did in the March market sell-off, according to a CNBC survey.

There are several reasons to be pessimistic. The economic aftermath of the COVID-19 pandemic is still unfolding. Some healthcare experts warn that another wave of the viral outbreak could hit in the fall. Unemployment is likely to remain high, affecting overall consumer spending. 

But there’s no need to despair if you’re an investor who’s worried about the stock market. Here are three specific things you can and should do right now to weather the storm.

1. Accumulate cash

It’s smart to have a nice cash stockpile to be prepared for the next stock market downturn. There could be plenty of attractive bargains to buy if the market falls again as much as it did in March.

Does this mean you should sell stocks that you currently own to raise additional cash? Not necessarily. If you still believe in the long-term business prospects for the companies, hold on to the stocks. You’re not going to be able to time the market except through pure luck. 

On the other hand, if you have any stocks in your investment portfolio for which you’ve lost confidence selling now isn’t a bad move. One good reason to sell is if your underlying assumptions about a stock’s long-term growth prospects are no longer valid. The important thing here, though, is don’t sell a stock just because you suspect a crash is on the way; sell because the business isn’t worthy of your investment anymore.

But you definitely should continue setting aside money to be able to invest later. If you don’t already follow this regular practice, now is a great time to start.

2. Make a watch list

Another thing you can begin to do immediately is to make a watch list. Start identifying the stocks that you’d love to buy if they were priced at a discount.

One stock that I have at the top of my watch list is Fastly (NYSE: FSLY). Unfortunately, I didn’t scoop up shares in March when the tech stock plunged more than 50%. Since then, Fastly’s share price has more than quadrupled. If I have the opportunity to buy shares of the edge computing specialist on a dip, I won’t miss out on a second chance.

Keep in mind, though, that your watch list doesn’t have to be limited only to stocks that you don’t own. Some of the stocks that are already in your portfolio could be even more attractive than stocks that you haven’t bought. Most of my personal watch list is made up of stocks that I already own but would like to add to my positions.

3. Buy stocks

You might think this sounds like a crazy idea but buying stocks right now is still a smart move even if another stock market crash is coming. The key, though, is that you should buy shares of companies that are resilient to factors that could prolong a stock market downturn such as an economic recession or a more severe coronavirus outbreak.

Dollar General (NYSE: DG), for example, is one of my favorite virtually recession-proof stocks. Consumers are even more likely to shop at discount retailers during tough economic periods. And the COVID-19 pandemic caused consumers to stock up on staple goods that Dollar General carries. Dollar General is the kind of stock that can perform well regardless of what happens at the macroeconomic level.

Vertex Pharmaceuticals (NASDAQ: VRTX) is another stock that’s worthy of consideration even if a stock market crash is around the corner. The big biotech’s cystic fibrosis (CF) drugs will be prescribed by physicians and paid for by governments and insurers whether or not there’s a recession or a second big wave of COVID-19 outbreaks. 

The company enjoys several tailwinds right now. It’s expecting European approval of new CF drug Trikafta, which has already generated massive sales in its U.S. launch. Vertex has secured key reimbursement agreements for its other CF drugs that should boost revenue in 2020 and beyond. The biotech is also making progress with several clinical programs. Good news from clinical trials would provide additional catalysts for the stock.

If you’re wrong

Those CFOs in the CNBC survey could be wrong about another stock market crash. So could you. It’s quite possible that the market keeps on chugging along despite the uncertainties caused by the COVID-19 pandemic. The great thing, though, is that following the three steps listed here should still enable you to win over the long run even if worries about another crash prove to be unwarranted. 

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

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Keith Speights owns shares of Dollar General and Vertex Pharmaceuticals. The Motley Fool owns shares of and recommends Fastly. The Motley Fool recommends Vertex Pharmaceuticals. 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 Another Stock Market Crash Is Coming? 3 Things You Should Do Right Now 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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