Tag: Motley Fool Australia

The Australian economy has just recorded its biggest monthly job losses since records began in 1978.

Today the Australian Bureau of Statistics released its employment data for the month of April. This was the first month which fully captured the impact of broad-based lockdowns implemented late in March.

According to the release, the 594,300 jobs were lost from the economy in April, bringing Australia’s unemployment rate to a seasonally adjusted 6.2%.

This compares to the 550,000 jobs that economists were expecting the economy to lose last month and the 450,000 jobs that Westpac Banking Corp (ASX: WBC) was forecasting.

Hours worked plunge.

Due to initiatives such as the JobKeeper program, this data doesn’t truly show the extent of the damage to the economy.

Arguably a more accurate representation is using the hours worked metric. The Australian Bureau of Statistics revealed that total hours worked fell by around 9.2% between March and April.

It commented: “When taken together with people leaving the workforce, around 2.7 million people (about 1 in 5 people employed in March) either left employment or had their hours reduced between March and April.”

As a result of this, the number of underemployed people rose by 603,300 people in April, to a total of 1.8 million people. This means the underemployment rate now stands at a record high of 13.7%, up 4.9 percentage points.

The Australian Bureau of Statistics also revealed a sharp increase in the underutilisation rate. This combines the unemployment and underemployment rates and rose to a record high of 19.9% in April.

In a press conference Prime Minister Scott Morrison acknowledged that this is a “tough day for Australia.”

He commented: “Almost 600,000 jobs have been lost. Every one of them devastating for those Australians, for their families, for their communities. A very tough day.”

But the Prime Minister remains optimistic on the future, saying: “Hard work, that’s the way out. It’s always been the way out for us. Australians hurting today, they can look forward knowing, on the basis of our national character and ingenuity and resolution, that we will see those better days.”

More reading

• What happens to ASX shares if Australian house prices do fall 30%?
• This is the best ASX big bank stock you can buy right now
• How can the ASX 200 soar with rising unemployment?
• Safe dividend stocks to buy today for the COVID-19 world
• 3 top ASX 200 shares you can buy on sale today

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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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Everyone wants to know how to invest like Warren Buffett. The ‘Oracle from Omaha’ has been one of the most successful investors ever. He’s built up his multi-billion dollar fortune by buying undervalued shares in companies with real growth potential.

It’s easy to imagine this strategy requires complicated algorithms and a touch of magic. The reality, however, is that Warren Buffett is human. In fact, his investment philosophy is actually very simple.

The man is known for his long-term investment horizon and ability to make calculated bets. If you want to know how to invest like Warren Buffett today, read on…

How to invest $1,000 like Warren Buffett today

I think it’s best to start with some quotes from the man himself. One of my personal favourites is, “Widespread fear is your friend as an investor because it serves up bargain purchases.”

It’s hard to think of something more appropriate to the current environment. COVID-19 shutdowns and an oil price war have smashed ASX share prices lower in 2020. In fact, the S&P/ASX 200 Index (ASX: XJO) is down 19.79% and that certainly has investors feeling fearful.

For every headline about a quick recovery there’s another about the impending end of the world. Personally, I think there’s still some short-term economic pain to come, but there are also some high-quality companies on sale right now.

If you want to invest like Warren Buffett today, there could be some ASX shares in the buy zone right now. One example the legend himself might like the look of is BHP Group Ltd (ASX: BHP). BHP’s shares have slumped 20.62% in 2020 and, I believe, could be undervalued. Particularly if we see Chinese demand continue to grow and more investment in Aussie infrastructure by the federal and state governments.

If you want to invest like Warren Buffett, buying undervalued shares is a great way to do it. Which brings me to another Warren Buffett quote I love: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

As such, just because shares in companies like Southern Cross Media Group Ltd (ASX: SXL) are down over 70% in 2020, this doesn’t necessarily make them a bargain. Many businesses are doing it tough right now and, whilst some will be undervalued, buying distressed companies could be a whole new ball game for the average Aussie investor.

Foolish takeaway

There are buying opportunities available to savvy investors at the moment. If you want to invest like Warren Buffett, remember to only look for companies with a long-term perspective.

More reading

• Why I’d buy and hold Telstra shares for a decade
• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Should you cash out of this ASX 200 rally?
• This ASX 200 share is rocketing higher after delivering more strong sales growth
• David Tepper believes we’re in the biggest stock bubble since 1999

Motley Fool contributor Ken Hall 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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Looking for additional ASX tech shares to add to your portfolio?

While you may be aware of the WAAAX tech consortium, which includes well-known ASX tech companies such as Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO), there’s a range of other emerging, smaller ASX tech shares that are worthy of consideration.

Here are 2 of my top picks of these smaller ASX tech shares:

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan focuses on a fast-growing niche in the IT software market called ‘sales enablement’. The company provides organisations and their sales teams with a platform to access, customise, present, and collaborate on content and improve customer engagement. 

It also leverages artificial intelligence through features that include the ability for users to personalise and recommend content. Additionally, Bigtincan’s software neatly integrates with other leading customer relationship management solutions available on the market. 

Although its core offering is accessible to users on a range of desktop and mobile platforms, the tablet market, in particular, through devices such as iPads, provides Bigtincan with strong market differentiation.

Through its software-as-a-service (SaaS) business model, Bigtincan is a capital-light and highly efficient business that has a subscription type model with attractive margins.

The advantage of a SaaS business model is that the business is highly scalable – as each new user comes on board, the addition to overall operating overheads is marginal and the business gradually becomes more efficient and profitable. Bigtincan also has high customer retention rates.

The company only listed on the ASX in 2017 and is yet to become profitable. So, it is a relatively risky investment. Bigtincan must continue to keep costs under control and maintain its high customer retention rate. However, I believe the company appears to be reasonably on track to reach profitability in the years ahead as it gains further scale, driven by fast-growing market opportunities.

Dicker Data Ltd (ASX: DDR)

I am attracted to wholesale IT distributor Dicker Data because of its proven track record and very attractive fully franked dividends. Dicker Data currently pays investors a lucrative grossed-up, forward dividend yield of 7.12%.

Dicker Data has seen a recent uplift in sales, recording its highest ever revenue month to date in March. This came as a huge number of employees were suddenly required to work from home due to the coronavirus crisis.

In fact, the crisis could actually change the long-term working habits of many Australian businesses as they see the benefits of remote working for a higher proportion of their employees. This could lead to further long-term demand for Dicker Data’s products. In a recent announcement, the company also detailed a plan to grow its dividend by 31% in FY2020.

Dicker Data also recently announced a capital raising, with the proceeds to be used to provide additional balance sheet flexibility and support the company’s long-term growth objectives. The proceeds will also be used partly to fund the construction of Dicker Data’s new distribution centre.

In contrast to a number of other ASX shares raising capital, Dicker Data was not under significant financial stress before the raising, which is reflected in its recent strong share price growth. While many ASX shares have only seen a partial rebound in their share price since the market bottomed in late March, Dicker Data has managed to regain all of its recent losses.

More reading

• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Why Beach, CBA, Qantas, & Xero shares are dropping lower
• Could these small cap ASX shares be the next Afterpay?
• 3 top ASX shares to buy now and hold for 10 years
• If you invested $10,000 in the Afterpay IPO, this is how much you’d have now

Motley Fool contributor Phil Harpur owns shares of AFTERPAY T FPO, Altium, and Xero. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO and Dicker Data Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO, Altium, and Xero. 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 Two exciting ASX tech shares to buy right now appeared first on Motley Fool Australia.

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At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) is on course to record a disappointing decline. The benchmark index is down 0.9% to 5,371.4 points at the time of writing.

Here’s what has been happening today:

Big four banks tumble.

The big four banks are acting as a major drag on the Australian share market on Thursday. All four banks are trading notably lower at lunch, but the worst performer is the Commonwealth Bank of Australia (ASX: CBA) share price with a decline of greater than 3%. This morning analysts at Morgan Stanley retained their sell rating and cut the price target on its shares down to $56.00. It has forecast a big dividend cut in August.

Xero delivers strong full year result.

The Xero Limited (ASX: XRO) share price is dropping lower on Thursday after the release of its full year results. Although the cloud-based business and accounting software provider delivered very strong sales and EBITDA growth, its outlook appears to have spooked investors. Management advised that many small businesses are struggling during the pandemic and this is weighing on its performance. As a result, no guidance was given for the year ahead.

Record Australian job losses.

Australia has just recorded the biggest job losses since records began in 1978. During the month of April 594,300 jobs were lost, bringing Australia’s unemployment rate to a seasonally adjusted 6.2%. This was greater than the 550,000 jobs that economists were expecting to lose last month.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Thursday has been the Graincorp Ltd (ASX: GNC) share price with a 17% gain. This morning the grain exporter released its half year results and reported an underlying net profit after tax of $55 million. This was an increase from a $48 million net loss after tax in the prior corresponding period. The worst performer has been the Unibail-Rodamco-Westfield (ASX: URW) share price with a 6% decline on no news.

Returns as of 7/4/2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Xero. 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.

More reading

• Two exciting ASX tech shares to buy right now
• Why Beach, CBA, Qantas, & Xero shares are dropping lower
• What happens to ASX shares if Australian house prices do fall 30%?
• Why Breville, Graincorp, Mesoblast, & Newcrest shares are charging higher
• Should you cash out of this ASX 200 rally?

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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 dropping lower. At the time of writing the benchmark index is down over 1% to 5,365.1 points.

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

The Beach Energy Ltd (ASX: BPT) share price is down almost 5% to $1.40. Investors have been selling Beach and other energy shares after a pullback in oil prices overnight. Though, one broker that thinks its shares are in the buy zone is Morgans. This morning it retained its add rating with a reduced price target of $1.66.

The Commonwealth Bank of Australia (ASX: CBA) share price is down 3% to $59.01. This decline may have been driven by a broker note out of Morgan Stanley this morning. In response to its third quarter update, the broker has retained its underweight rating and cut the price target on its shares to $56.00. It doesn’t believe Commonwealth Bank deserves to trade at a premium and is expecting a big dividend cut in August.

The Qantas Airways Limited (ASX: QAN) share price has fallen 3.5% to $3.42. Investors have been selling the airline operator’s shares after the Queensland government confirmed that it is looking to buy a stake in rival Virgin Australia Holdings Limited (ASX: VAH). The state government appears determined not to let Virgin Australia collapse during the pandemic.

The Xero Limited (ASX: XRO) share price is down almost 4% to $80.62 following the release of its full year results. For the 12 months ended March 31, the business and accounting software company delivered a 30% lift in operating revenue and a 52% lift in EBITDA. Whilst this was strong, the company warned that it is being impacted by the pandemic. As such, no guidance was provided for FY 2021.

More reading

• Two exciting ASX tech shares to buy right now
• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• What happens to ASX shares if Australian house prices do fall 30%?
• Losers of Virgin Australia’s potential nationalisation
• Are ASX travel shares like Qantas great value?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Xero. 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 Beach, CBA, Qantas, & Xero shares are dropping lower appeared first on Motley Fool Australia.

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What will happen to ASX shares if Australian house prices do actually fall 30% like some economists are predicting.

A lot is being made of the Commonwealth Bank of Australia (ASX: CBA) predicted scenario where house prices may fall 30% due to the coronavirus. But that’s just one potential scenario. CBA isn’t saying house prices will fall 30%, it isn’t the most likely outcome – just a worst-case one.

How far do banks think property will fall?

However, all of the big four ASX banks are now predicting that house prices are probably going to fall by more than 10%. Anecdotal evidence suggests that in some areas house prices have already dropped 10%, it just isn’t reflected in the statistics yet.

Obviously if house prices were to drop it would be bad news for a wide variety of ASX shares. For starters, I think CBA, Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) would all suffer.

I believe the regional lenders would also suffer. The pain may be smaller in dollar terms, but don’t forget their loan books are smaller too. In percentage terms it could be just as bad, if not worse. I’d watch for the effects on Bank of Queensland Limited (ASX: BOQ) and Bendigo and Adelaide Bank Ltd (ASX: BEN).

If house prices dropped 30% then that could cause higher bank bad debts due to negative equity.

I think it could also be bad for property businesses that are somewhat reliant on a robust property market. Think of shares like REA Group Limited (ASX: REA), Domain Holdings Australia Ltd (ASX: DHG), CSR Limited (ASX: CSR), Beacon Lighting Group Ltd (ASX: BLX) and Nick Scali Limited (ASX: NCK). Share prices would probably fall.

The negative effect could be a noticeable negative for many areas of the economy like we saw during the first half of 2019. And think of all of the taxes generated by property values for various areas of government – stamp duty, council rates and so on.

Falling house prices may be good for one group of people, avocado eaters may finally be able to afford a house.

Do I think house prices will fall 30%?

Australia’s economy is quite reliant on property. Would property buyers really let Aussie house prices fall that far? Maybe everyone would jump in at a 20% reduction. Interest rates are now incredibly low which makes it easier to afford a property.

I certainly expect property will fall over 10% (some property buyers say they already have in parts). But I think a 30% won’t happen because of the Aussie love for property and how much support there is and will be for property prices.

More reading

• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Why Beach, CBA, Qantas, & Xero shares are dropping lower
• Is the CBA share price a buy?
• Negative interest rates coming? Here’s what it would mean for ASX shares
• ASX 200 up 0.35%, CBA gives Q3 update

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA 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 Queensland state government’s announcement of the potential nationalisation of Virgin Australia Holdings Ltd (ASX: VAH) is undoubtedly a value-destroying move, in my view. Airlines are capital-intensive companies. They have good margins, but not great. Attaching a company like that to the state finances appears, prima facie, as a recipe for disaster.

At time of writing, Virgin owes $2.28 billion to secured lenders and secured leaseholders, $1.98 billion to unsecured bondholders, $1.88 billion to aircraft lessors and $451 million in entitlements to around 9,000 workers. In total, almost $7 billion to over 12,000 parties. 

In any debt restructuring and bailout, creditors can exert some influence. However, all bidders will be looking to reduce payments to debt holders – a situation the state government would find difficult. 

This is particularly as Queensland would be doing so for its own state interest. While this is fair enough, I believe it adds little value to the remainder of the airline’s national customers, aside from placing their interests always second. The irreplaceable value of Virgin to the Queensland economy has been overblown. As has the need for government intervention.

Alternatives to nationalisation

Outside of nationalisation, a range of potential bidders has come to light. Among them is Andrew Forrest, a man whose determination has already launched 2 multi-billion dollar enterprises in Western Australia. 

Deloitte, Virgin’s lead administrator, previously stated that 8 bidders were already confirmed, with negotiations continuing with a further 12 potential bidders. Some of these allegedly include Wesfarmers Ltd (ASX: WES), American airline investor Indigo Partners, Richard Branson and private equity firm BGH Capital.

Indicative bids for the airline are due by tomorrow, 15 May. Final bids are expected in June with Deloitte confident of completing the sales process by the end of June.

Capitalism works

Within Queensland, there are regional airlines like Alliance Aviation Services Ltd (ASX: AQZ) or even Regional Express Holdings Ltd (ASX: REX). These airlines already carry a lot of the load of intra-state and regional air traffic. Not only in Queensland but also in my own state of Western Australia. The vacancy remains at the interstate level. 

Of these 2 airlines, I am particularly fond of Alliance. This company is the nation’s unheralded workhorse, ferrying many workers to and from resource projects. It has recently won a contract extension with South32 Ltd (ASX: S32) and has continued operations throughout the COVID-19 pandemic. All of its aircraft belong to the company, which prides itself in operating to world-class standards. 

Foolish takeaway

In my opinion, any attempt at nationalisation by the Queensland government into the Virgin Australia bidding process is likely to produce a large number of losers. These include the taxpayers of Queensland, customers of Virgin across the nation, small but robust airlines like Alliance, as well as those who are dedicating time and capital to winning the bidding process.

Many airlines across the world have government support. However, in Australia, I believe this is not necessary. Virgin Blue demonstrated that.

More reading

• Why Beach, CBA, Qantas, & Xero shares are dropping lower
• The Queensland government is aiming to buy a stake in Virgin Australia
• 5 things to watch on the ASX 200 on Thursday
• ABS reveals overseas travel arrivals plummeted a massive 99% in April
• ASX stock of the day: This ASX airline share jumped 45% today on expansion speculation

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I think having a little exposure to the small cap side of the market would be a very good thing for a portfolio.

You only need to look at how successful investing in the Afterpay Ltd (ASX: APT) IPO in 2016 would have been to see why.

And while very few small cap shares will be as successful as Afterpay, there are a number on the market that have the potential to follow in its footsteps.

Three small cap shares I think have enormous potential are listed below:

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan is a fast-growing provider of enterprise mobility software. The company’s software allows sales and service organisations to increase their sales win rates, reduce expenditures, and improve customer satisfaction. This is achieved through improved mobile worker productivity. It counts a wide range of blue chips as customers and continues to grow during the pandemic. Bigtincan recently reaffirmed that it is on course to achieve organic revenue growth in the range of 30% to 40% in FY 2020.

Serko Ltd (ASX: SKO)

Serko is a technology company focused on innovative solutions that address the challenges of corporate travel and expense management. It was growing at a very strong rate over the last fews years thanks to the increasing popularity of its Zeno product. And while its performance looks likely to be negatively impacted by the coronavirus, I expect it to bounce back strongly once conditions ease.

Whispir (ASX: WSP)

Whispir is a software-as-a-service communications workflow platform provider. Its industry-leading software platform allows companies to deliver actionable two-way interactions at scale using automated multi-channel communication workflows. This helps make operations more efficient and can cut down the number of service desk support calls. It counts a number of big names as customers such as Disney and Foxtel.

More reading

• 3 top ASX shares to buy now and hold for 10 years
• If you invested $10,000 in the Afterpay IPO, this is how much you’d have now
• Is the Zip share price in the buy zone?
• Why Afterpay, Flight Centre, Mesoblast, & Sezzle shares are dropping lower
• Safe dividend stocks to buy today for the COVID-19 world

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 Serko Ltd. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Serko Ltd and Whispir 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 Could these small cap ASX shares be the next Afterpay? appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) is having an off day and is trading notably lower in late morning trade. At the time of writing the benchmark index is down 0.8% to 5,380.4 points.

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

The Breville Group Ltd (ASX: BRG) share price has jumped 10% to $20.52. This morning Breville completed the institutional component of its equity raising. The appliance maker raised $94 million at $17.00 per new share. This represents a discount of 9.1% to its last close price. The company also released a positive trading update which revealed strong sales growth in the second half. Between January 1 and April 30, Breville’s revenue was up 32% on the prior corresponding period. Sales grew 25% in March and 21% in April.

The Graincorp Ltd (ASX: GNC) share price is up 6% to $3.49 following the release of its half year results. For the six months ended March 31, the grain exporter delivered an underlying net profit after tax of $55 million. This was an increase from a $48 million net loss after tax in the prior corresponding period.

The Mesoblast limited (ASX: MSB) share price has jumped 10% to $3.73. Investors have been buying the regenerative medicine company’s shares in recent weeks due to promising trials of its allogeneic cell therapy, remestemcel-L. The company is testing its efficacy in treating acute respiratory distress syndrome (ARDS), the most devastating symptom of COVID-19. Phase 2/3 trials are ongoing, with the dosing of some patients commencing last week.

The Newcrest Mining Limited (ASX: NCM) share price is up 4.5% to $29.30. A number of gold miners are pushing higher on Thursday after a solid rise in the gold price overnight. The precious metal rose amid speculation that the Federal Reserve will soon embark on further stimulus. In late morning trade the S&P/ASX All Ordinaries Gold index is up by almost 3%.

More reading

• This ASX 200 share is rocketing higher after delivering more strong sales growth
• 5 things to watch on the ASX 200 on Thursday
• This ASX 200 gold share is making the most of the gold rush
• ASX gold shares steady: Can gold provide your portfolio with defensive and safe returns?
• ASX 200 down 0.9%: CBA reveals $1.5bn COVID19 provision & gold miners charge higher

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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Should you cash out of this S&P/ASX 200 Index (ASX: XJO) rally?

The ASX 200 has had a pretty top few weeks. Since the lows we saw in late March, the ASX 200 has rallied almost 20%. That’s more than double the index’s long-term average annual return – albeit following a 37% crash earlier in the year.

Still, the confidence of many ASX investors would be well up from the widespread panic we saw in March. Some shares like the ASX banks have stabilised. Others like CSL Limited (ASX: CSL) are edging ever closer to their pre-crash highs.

But this begs the question – is now a good time to ‘cash out’ and lock in some gains? Particularly since the markets don’t seem to be factoring in that we’re about to go through the worst recession Australia has seen in decades.

Time to cash out?

It might be tempting to cash out of some or all of your holdings if you’re nervous about the markets right now. After all, cash is king in a market crash.

But here’s the problem.

Do you actually know what the markets will look like tomorrow, in two months, six months or a year’s time? Of course not, otherwise you wouldn’t be reading this article! Even the best investors in the world, like Warren Buffett, don’t try to pretend they know exactly what the markets will do next.

Plus, odds are (like most ASX investors), your portfolio still has some losses left over from the March crash. To paraphrase a great song, you can cash out any time you’d like, but you can never leave… your losses once you do so.

Yes, the ASX might crash the day after you cash out and you’ll look and feel like a genius.

But maybe it won’t. Maybe it will go on to hit new highs – stranger things have happened. As the legendary economist John Maynard Keynes once said, “Markets can remain irrational longer than you can remain solvent”. And if that happens, you probably won’t feel so smart.

And even if you do pull off a well-timed cash out, when are you going to jump back in? That’s two incredible punts you’re going to have to pull off.

Throw in the costs of jumping in and out of the markets (taxes, brokerage, fees etc.) and it’s a very narrow tightrope you’re trying to walk.

Foolish takeaway

Like most of us Fools, I think having a long-term mindset is the best way to invest in shares. Thus, I think trying to time the market by cashing out ‘before the crash’ is folly. Investing in shares means you’re in it for the good times and the bad – it’s all part of the game. Trying to dodge the inevitable will usually result in poor returns over the long run!

More reading

• This ASX 200 share is rocketing higher after delivering more strong sales growth
• If you invested $10,000 in the Afterpay IPO, this is how much you’d have now
• David Tepper believes we’re in the biggest stock bubble since 1999
• 5 things to watch on the ASX 200 on Thursday
• The latest ASX shares upgraded by brokers to “buy”

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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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