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Despite its century-long history as an ASX listed investment company (LIC), the Australian Foundation Investment Co Ltd (ASX: AFI) share price, or AFIC for short, continues to attract investor attention in 2022.

Perhaps this is due to AFIC’s continuing ability to outperform ASX-based index funds like the Vanguard Australian Shares Index ETF (ASX: VAS).

Or perhaps it’s due to AFIC’s long history. Whatever the reasons, the fact remains that today, AFIC has a market capitalisation of almost $9.5 billion, making it one of the largest passive investment vehicles on the ASX.

LICs like AFIC aren’t normal ASX companies. They instead invest their capital in other assets (including ASX shares) on behalf of their investors.

So now that AFIC has reported its preliminary earnings for the 2022 financial year, it might be a good time to look back and see how this LIC’s portfolio has changed over FY 2022.

The first thing to note is that AFIC’s investment portfolio had a tough financial year. Back in June 2021, the LIC reported that its net asset backing per share (before tax) stood at $7l45. Fast forward to 30 June 2022 and this had shrunk 11% to $6.63. But let’s dig into the specifics.

AFIC’s not-so-different ASX share portfolio of FY2022

At the end of FY21, AFIC reported that its top 10 shares were as follows

1. Commonwealth Bank of Australia (ASX: CBA), with a portfolio weighting of 8.8%
2. BHP Group Ltd (ASX: BHP) at a weighting of 7.3%
3. CSL Limited (ASX: CSL) at 6.9%
4. Wesfarmers Ltd (ASX: WES) at 4.9%
5. Westpac Banking Corp (ASX: WBC) at 4.5%
6. Macquarie Group Ltd (ASX: MQG) at 3.8%
7. Transurban Group (ASX: TCL) at 3.8%
8. National Australia Bank Ltd (ASX: NAB) at 3.3%
9. Woolworths Group Ltd (ASX: WOW) at 2.7%
10. Australia and New Zealand Banking Group Ltd (ASX: ANZ) at 2.7%

Let’s now take a look at AFIC’s top 10 shares as of 30 June 2022:

1. Commonwealth Bank at 8.8%
2. CSL at 7.9%
3. BHP at 7.1%
4. Transurban at 5.1%
5. Macquarie Group at 4.5%
6. Wesfarmers at 3.8%
7. NAB at 3.7%
8. Westpac at 3.7%
9. Woolworths at 3.2%
10. Amcor CDI (ASX: AMC) at 2.6%

So as is evident, there really haven’t been too many dramatic changes to AFIC’s ASX share portfolio over FY22. BHP and CSL have swapped places. And AFIC has traded in some Westpac and ANZ shares for more NAB and Macquarie shares.

But this is probably what AFIC’s investors expect. After all, the LIC prides itself on its long-term investment horizon and performance. And we know that a high portfolio turnover can increase transaction costs and taxes.

As of 31 July 2022, AFIC has returned an average of 12.2% per annum over the past 10 years (including dividend and franking returns). At the current AFIC share price, this ASX LIC has a dividend yield of 3.11%.

The post How has the AFIC ASX share portfolio changed over FY22? appeared first on The Motley Fool Australia.

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More reading

• Why is the AFIC share price sliding today?
• The CBA share price looks downright expensive
• Why I prefer AFIC shares to an ASX 200 index fund today
• Keen to bag the next AFIC dividend? Read this
• Why did the AFIC share price have such a top run in July?

Motley Fool contributor Sebastian Bowen has positions in CSL Ltd. and National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has positions in and has recommended Amcor Limited and Wesfarmers Limited. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. 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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1) So much for the start of the next bull market…

Overnight, US stocks posted their worst day since June as investors doubted (again) whether the Federal Reserve will temper its monetary policy tightening.

According to Bloomberg, hedge funds are positioned to profit should Federal Reserve Chair Jerome Powel “effectively rule out a dovish pivot” at the central bank’s Jackson Hole symposium later this week.

Stocks had rallied from their June lows as 10-year US bond yields fell from around 3.5% to 2.5% as markets hoped for an easing in the pace of interest rate rises.

Source: Trading Economics

But all that has come to a screeching end as bond yields have reversed their fall, now back up to 3%.

Interest rate expectations will continue to drive the direction of stock markets in the short-term, as they should. 

Longer-term, for stock pickers, underlying earnings growth will drive the share prices of individual companies, as they should.

2) The S&P/ASX 200 Index (ASX: XJO) has followed Wall Street’s lead lower, although falls have been modest as large-cap stocks have held up reasonably well on the back of higher commodity prices. 

The BHP Group Ltd (ASX: BHP) share price and the Fortescue Metals Group Limited (ASX: FMG) share price both rose on the back of a gain in the iron ore price. Both stocks trade on very attractive fully franked dividend yields.

The Pilbara Minerals Ltd (ASX: PLS) share price jumped 4% higher after the leading ASX-listed lithium company reported a massive 577% increase in sales revenue to $1.2 billion and a maiden full year profit of $562 million. 

Pilbara said it was “buoyed by exceptionally strong global demand for lithium raw materials and positive pricing conditions for spodumene concentrate, particularly in the second half of the year.”

The company is one of the poster children for the rise in demand in electric vehicles, and these are a stunning set of results. But high demand inevitably incentivises increased supply, something Credit Suisse analyst Matthew Hope recently said could lead to a looming period of oversupply.

Successful investing in commodity stocks requires a good degree of market timing combined with a dose of luck. 

3) Amongst other ASX 200 companies reporting today, going the other way is the Endeavour Group Ltd (ASX: EDV) share price, down 10% to $7.45.

Spun out of Woolworths Group Ltd (ASX: WOW), Endeavour is the home to a portfolio of pubs plus liquor chains Dan Murphys and BWS.

According to the AFR, CEO Steve Donohue told analysts he expects the market will return to normal after two bumper years. Supply chain costs dinged profits in the second half, “a factor that some on the investor call say is driving the plunge in the company’s shares today.”

The falling Endeavour Group share price might also have something to do with it trading on an earnings multiple of 27 times and a dividend yield of just 2.7%. The risks look to be to the downside.

4) Speaking of downside, the Kogan.com Ltd (ASX: KGN) share price is on the nose after reporting a small loss as revenue slipped by 8% and gross profit declined by 9%.

CEO Ruslan Kogan admitted his bet that the pandemic acceleration of sales was not going to stop was wrong. This led to Kogan holding excess inventory and an associated increase in variable costs and marketing costs to sell through the inventory.

Kogan.com scrapped its final dividend as it “works through a period of consolidation to return to growth in profits.”

Having reset the business to this more normal trading environment, Kogan is banking on the continued growth of online shopping and its huge range of products delivered to customers’ doors at great prices.

With a market capitalisation of $380 million, and net cash of $31 million, Kogan shares look cheap, trading at around 0.5 times sales. 

July trading saw adjusted EBITDA of $1.5 million, giving shareholders hope the turnaround is taking shape. If only we weren’t staring at an economic slowdown as interest rate rises start to kick in to discretionary spending…

Still, Kogan shares could be worth a look, especially if the share price falls back down to around the $3 mark.

5) Despite the Nasdaq slumping 2.55% overnight, and Zoom Video Communications cutting its annual revenue forecast, saying it’s losing sales from consumers and small business faster than anticipated, founding member of the now defunct WAAAX stocks – Altium Limited (ASX: ALU) – is proving there’s life yet in tech stocks, with Altium shares soaring almost 20% after reporting results that smashed expectations.

While Altium shareholders are popping the champagne corks today, like many other growth stocks, the Altium share price has been smashed so far this year, down over 20%. Still, when you compare it to fellow ASX 200 tech stocks like Block Inc (ASX: SQ2) and Xero Limited (ASX: XRO) – down 39% and 38% respectively year to date – it’s not as bad as it could have been. 

Unfortunately, quality doesn’t come cheap. Altium shares trade on 84 times trailing earnings.

The post Wall Street Slumps | Pilbara Minerals stunning profits | Kogan shares look cheap, Altium shares less so… appeared first on The Motley Fool Australia.

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More reading

• Pilbara Minerals share price charges higher on strong FY22 result
• Endeavour share price drops 9% despite $495 million profit
• Kogan share price tumbles 9% on first ASX loss
• Altium share price jumps 18% after ‘cracking result’
• The ASX 200 mining share ‘in a wonderful position with a pristine balance sheet’: expert

Motley Fool contributor Bruce Jackson has positions in Block, Inc. and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Block, Inc., Kogan.com ltd, Xero, and Zoom Video Communications. The Motley Fool Australia has positions in and has recommended Block, Inc., Kogan.com ltd, and Xero. The Motley Fool Australia has recommended Zoom Video Communications. 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 Commonwealth Bank of Australia (ASX: CBA) share price slipped 0.29% on the release of its annual report earlier this month. And released alongside the company’s earnings was its inaugural climate report, produced in partnership with the CSIRO.

Astoundingly, the report found a significant chunk of the bank’s home loan portfolio could be at increasing risk of natural catastrophes.

Let’s take a closer look how climate change could put a disastrous dint in CBA’s portfolio.

Right now, the CBA share price is $97.63, down 1.34% on the day.

$31.2b of CBA home loans at risk of climate change

Floods, cyclones, and fires could pose a greater risk to Australian homes – and to CBA – than those holding shares in the bank may have thought.

Recent analysis found $31.2 billion of its Australian home loans are at risk of such disasters, which are likely to be exacerbated by climate change.

CBA chair Catherine Livingstone and CEO Matt Combyn commented in the bank’s climate report, saying:

As changes to the climate accelerate, Australia is likely to see more frequent and severe weather events such as droughts, floods, bushfires, and storms. These are some of the physical risks of a changing climate with the potential to impact economic productivity and community wellbeing.

Right now, 3.1% of CBA’s assessed exposures are located in areas with potentially increasing climate risks, such as cyclone-exposed coastal regions, low-lying flood plains, and rural areas close to urban fringes.

And such areas might soon expand. The report noted that, under a severe physical risk scenario for climate change by 2050, cyclones could migrate south. It stated:

If this happened in the north of New South Wales, where construction standards have not been designed to resist cyclones, material losses could be observed which are not currently reflected in our current estimates.

Currently, 38,000 properties mortgaged by the bank, with a combined value of $11 billion, are at risk of cyclones.

Another 56,000 – $19 billion worth – are at risk of flooding while 5,000 – worth a total of $2 billion – are at risk of fire.

It also found $14 billion of its home loans are in communities economically dependent on the coal value chain. Of course, much of that value is at risk of the climate transition.

CBA share price snapshot

The CBA share price has been outperforming the broader market so far this year.

It has slumped 4% since the start of 2022 and has dumped 2% since this time last year.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has slipped 8% year to date and 6% over the last 12 months.

The post Own CBA shares? $31b of the bank’s home loans face increasing climate risks appeared first on The Motley Fool Australia.

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More reading

• Is the Flight Centre share price a buy ahead of Thursday’s FY 2022 earnings report?
• Is the Santos share price a buy following the company’s monster profit?
• Pilbara Minerals share price charges higher on strong FY22 result
• Nanosonics share price lifts despite FY22 profit tumbling 57%
• Hub24 share price slumps despite dividend doubling on record growth

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

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The Monadelphous Group Ltd (ASX: MND) share price is rocketing today following the release of the company’s full-year results.

At the time of writing, the engineering company’s shares are up 7.52% to $12.30 each. Earlier today, they hit a high of $12.795 a share, 11.84% higher than yesterday’s closing price.

Monadelphous share price rises as record maintenance and industrial services revenue soars

Monadelphous delivered its FY 2022 results for the 12 months ended 30 June 2022. Here are some of the key financial highlights:

• Total revenue down 1.2% year-on-year to $1.93 billion
• Record maintenance and industrial services revenue up 19.4% to $1.17 billion
• Net profit after tax (NPAT) up 11% to $52.2 million
• Earnings per share (EPS) up 10.5% to 54.9 cents
• Final dividend of 25 cents per share, fully franked, bringing the full year dividend to 49 cents per share, up 8.9%
• Cash on hand up 4.3% to $183.3 million

What happened in FY 2022?

Monadelphous reported an outstanding financial performance on the back of positive market conditions throughout the year.

The business experienced strong demand for maintenance services across the resources and energy sectors. This was underpinned by customers maintaining high levels of production, capitalising on favourable commodity prices.

Monadelphous’ maintenance and industrial services division reported record revenue of $1.17 billion. Management highlighted the increased activity in oil and gas as well as Chile and PNG operations which drove the result.

In addition, the engineering construction division reported revenue of $774.4 million for the year. Revenue declined towards the backend of the financial year, however, as numerous projects were completed in the first half. This included BHP’s South Flank Project, Rio Tinto’s West Angelas Deposits C & D Project, and MARBL Lithium joint venture’s Kemerton lithium hydroxide plant.

On the bottom line, the company achieved an NPAT of $52.2 million, an increase of 11% on the prior corresponding period.

The Monadelphous board declared a final dividend of 25 cents per share, fully franked, yielding a dividend payout ratio of 90%.

What did management say?

Monadelphous managing director Rob Velletri talked about the favourable market conditions providing the company opportunities for growth. He said:

Demand for our maintenance services is expected to remain strong and resource developments in iron ore and oil and gas as well as the significant pipeline of investment in battery metals and renewable energy will provide a solid volume of construction prospects in the coming years. However, a highly competitive labour market will remain the major challenge.

What’s the outlook for FY 2023?

Looking ahead, Monadelphous advised that there’s a significant number of opportunities across resources and energy sectors in Australia and overseas.

In particular, the Australian iron ore industry is expected to “remain buoyant with capital and operating expenditures required to sustain iron ore production levels”.

Furthermore, the strong hype surrounding the electric vehicle revolution is driving substantial investment in battery metals. This includes lithium, copper, nickel, and rare earths.

Monadelphous said these markets will present ongoing opportunities for its projects in Australia, South America, Mongolia, and Papua New Guinea.

Lastly, favourable conditions in the oil and gas sector are also buoyant with construction opportunities from new LNG projects currently in the pipeline. Demand for oil and gas maintenance services is anticipated to remain strong.

While Monadelphous spoke about the outlook, it did not provide any earnings or profit guidance for FY 2023.

Monadelphous share price snapshot

In 2022, the Monadelphous share price has gained 32% and is up 7% when looking over the last 12 months.

For context, the S&P/ASX 200 Industrials (ASX: XNJ) sector is down 3% for the current calendar year.

Monadelphous commands a market capitalisation of approximately $1.18 billion.

The post Monadelphous share price leaps 12% on record maintenance and industrial services revenue appeared first on The Motley Fool Australia.

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More reading

• Estia share price lifts despite $50m loss
• Is the Flight Centre share price a buy ahead of Thursday’s FY 2022 earnings report?
• Is this really the right time to invest in the stock market?
• Why is the Arafura share price leaping 5% today?
• Guess which obscure ASX lithium share has gained 293% so far in August

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

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The Estia Health Ltd (ASX: EHE) share price shows why you can’t only judge a company by its headline results.

Shares in the aged care provider are holding up well even after it turned in a net loss of $52.4 million for the financial year ending 30 June 2022.

The Estia share price is currently up 1% to $2.02, while the All Ordinaries (ASX: XAO) is down 0.6%.

Summary of Estia’s FY22 results

• Total revenue improved 2.2% to $680 million
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) Mature homes: $37.5m (FY21: $61.4m)
• COVID-19 costs impact: $42.3 million of net unrecovered costs
• Net loss after tax of $9.6 million before bed licence amortisation (NPATA)
• Net loss after tax of $52.4 million after bed licence amortisation, compared to a profit of $5.6 million in FY21
• No final dividend declared

What else happened?

The impact of COVID-19 on the sector is well documented. Some will say a lot of bad news is already reflected in the Estia share price, which is trading at the lower end of its 52-week trading range.

Further, there are signs of a silver lining to the company’s FY22 results. One was the $50.4 million in extra COVID costs to cover the likes of testing, quarantine, and personal protective equipment.

As the pandemic eases, these costs should ease and flow back to its EBITDA line. If this thinking holds true, FY23 EBITDA could show an improvement.

Additionally, the average occupancy rate remains high and stable at 91.6%, which is up from a low of 90% in February this year.

What may also be pleasing investors is Estia’s average incoming Refundable Accommodation Deposit (RAD), a standard room price set by the aged care home and paid by a refundable lump sum. This amount was $453,000, which exceeded the outgoing RAD by $47,000.

What Estia said about its FY22 results

Commenting on the results, Estia chief executive Sean Bilton said:

The commitment and loyalty of the aged care workforce has been exceptional during the last two years, notwithstanding the fact that rates of pay lag comparable sectors. The current Fair Work Commission work value case may provide a trigger for greater parity, making the sector more attractive to employees and facilitating the required growth and funding of the sector workforce.

The regulatory landscape is nearing a point where we should have a higher level of certainty for the first time in four years. The Group is well-placed to benefit from opportunities created by a more competitive and transparent sector

What’s next?

Despite Bilton’s positive commentary, the company painted a cautious outlook. It noted uncertainties remain, which may affect the financial performance of Estia.

The tighter regulatory requirements for the sector following the Aged Care Royal Commission also introduce another level of uncertainty.

Estia would only say that it will use capital in a disciplined way to take advantage of growth opportunities.

One has to wonder if mergers and acquisitions are part of the equation. After all, the turmoil in the sector has put the M&A spotlight on operators in this space.

Estia share price snapshot

The Estia share price has shed almost 10% over the past year, while the All Ordinaries has lost around 7%.

In contrast, its peer Regis Healthcare Ltd (ASX: REG) has gained 3.6% over the same period.

The post Estia share price lifts despite $50m loss appeared first on The Motley Fool Australia.

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More reading

• Is the Flight Centre share price a buy ahead of Thursday’s FY 2022 earnings report?
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• Why is the Arafura share price leaping 5% today?
• Guess which obscure ASX lithium share has gained 293% so far in August
• Is the Santos share price a buy following the company’s monster profit?

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

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The Flight Centre Travel Group Ltd (ASX: FLT) share price is down 1.39% during early afternoon trade on Tuesday.

Flight Centre shares closed yesterday trading for $17.24 each and are currently trading for $17.00.

With the Flight Centre share price down 4.8% over the past five days, is it a buy ahead of Thursday’s 2022 fiscal year earnings report?

FY 2022 earnings expected to remain negative

While earnings are expected to remain deep in the red for FY 2022, much of those pending results are likely already reflected in the Flight Centre share price.

The company released a trading update on 25 July, revealing it expects an earnings before income, taxes, depreciation, and amortisation (EBITDA) loss in the range of $180 million and $190 million for FY 2022.

While that’s still a hefty loss, it’s a big step up from the $337.9 million EBITDA loss posted in FY 2021.

According to Flight Centre, the improved outlook came from a much stronger second half.

Flight Centre share price could get a lift from travel rebound

While travel numbers remain below their pre-pandemic levels, travellers are returning at a rapid pace.

That could offer a boost to the Flight Centre share price in the wake of its FY 2022 results, which would make now a good time for investors to consider adding some of the stock to their portfolios.

According to Felicity Burke, consulting general manager at Flight Centre’s FCM Consulting (courtesy of The Australian):

We’re seeing an upward tick in aviation globally with the second quarter showing a steady monthly growth in seats offered, down 23% when compared to the same time-period pre-COVID.

As demand continues to increase across the world, we can now forecast that for the calendar year ending 2022, global seat availability will be back to 85% of pre-COVID levels, a bounce back that signifies the pent-up demand for people wanting to travel for both business and leisure.

Domestic air travel is expected to rebound to 83% of pre-COVID levels for the full 2022 year.

Flight Centre share price snapshot

Despite a big retrace since early May, the Flight Centre share price remains up 20% so far in 2022. That compares to a year-to-date loss of 8% posted by the S&P/ASX 200 Index (ASX: XJO).

The post Is the Flight Centre share price a buy ahead of Thursday’s FY 2022 earnings report? appeared first on The Motley Fool Australia.

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More reading

• Is the Santos share price a buy following the company’s monster profit?
• Pilbara Minerals share price charges higher on strong FY22 result
• Nanosonics share price lifts despite FY22 profit tumbling 57%
• Hub24 share price slumps despite dividend doubling on record growth
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. 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.

In July, inflation slowed from 9.1% to 8.5%, which offered some badly needed relief to the American consumer. Additionally, the labor market added over 500,000 jobs while maintaining an unemployment rate of just 3.5%.

If a recession is underway, someone forgot to tell the economy.

With the recent positive news, you might be wondering: Is now a good time to buy stocks? The truth is, if you’re a long-term investor, it’s always a good time to put money in the stock market. And while I personally think this is a great entry point for investors, there are a few things you should consider before investing your money.

Do you have an emergency fund?

An emergency fundis a cash reserve you can fall back on in case of unforeseen circumstances. Financial advisors typically recommend you hold enough cash to cover three to six months of expenses before investing, but it really depends on your personal risk tolerance.

If you need eight months of expenses saved up in order to sleep at night, then that’s what you should have in your emergency fund before you put your capital to work.

Will you need the money in the next three to five years?

Another thing to consider before investing your hard-earned money is when you’ll need that cash again. Ideally, you shouldn’t invest money that you anticipate needing in the next three to five years, preferably longer.

Obviously, you can’t predict the future (hence the emergency fund), but if for example, you know you are planning to buy a house or sending your kids to college in the next few years, you should not invest that money.

The market is unpredictable, so investing capital you will need in the near future can be a recipe for disaster.

Do you have high-interest debt?

Investing your savings while simultaneously paying off high-interest debt such as credit card debt is sort of like swimming in a riptide. It’s a whole lot of effort for very little progress.

If the S&P 500 returns on average 10% annually, but the interest on your credit card balance is 18%, it makes more financial sense to pay off your debt first instead of buying stocks.

This is not a universal rule, but if the interest rate on your debt is higher than your anticipated rate of return, you should pay off the debt before investing.

Have you educated yourself about investing?

The last thing to consider is if you’ve spent the time to understand the stock market before diving in. Fear of missing out (FOMO) can often cause stock market newcomers to rush into positions before they really understand the mechanics of the market and companies they’re investing in.

Horror stories of beginners accumulating huge margin debts or losing years of savings due to a lack of knowledge are all too common, so you want to be sure you understand the basics before buying your first shares.

Fortunately, there are investment vehicles such as low-cost exchange-traded fund (ETF)s, which require less research to understand. The beauty of the ETFs is a complete amateur can go from knowing nothing about investing to owning a piece of the best companies in the U.S. by buying an ETF such as the Vanguard 500 Index Fund ETF, all in a span of 30 minutes or so.

And despite numerous recessions, natural disasters, and the endless pessimism from the financial media, the stock market has continued to reward patient long-term investors:

Data by YCharts.

The bigger risk is actually not investing.

According to a study from Bank of America, the return of the S&P 500 between 1930 and 2020 was nearly 18,000%. But if you removed the 10 best trading days from each decade in that period, the return falls to just 28%. That means investors are better off holding on long term rather than jumping in and out of the market.

Net buyers of stocks are the ultimate winners

The undefeated stock market strategy is to simply be a net buyer of great companies regardless of market conditions.

Don’t believe me? Just ask the greatest investor of all time, Warren Buffett.

At a Berkshire Hathaway (NYSE: BRK-B) annual meeting in April, Buffett said:

I don’t think we’ve [referring to Vice Chairman Charlie Munger] ever made a decision where either one of us has either said or been thinking: ‘We should buy or sell based on what the market is going to do.’

Buffett understands that if you hold great companies long enough, the risk declines over time. According to MSCI, the probability of positive returns on an investment in the S&P 500 that’s held for at least 10 years is about 95%.

Whether you plan to buy a basket of diversified stocks or purely low-cost index funds, now remains a great opportunity to invest in the market to build toward financial independence.

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

The post Is this really the right time to invest in the stock market? appeared first on The Motley Fool Australia.

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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Mark Blank has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The Arafura Resources Ltd (ASX: ARU) share price is flying higher in early afternoon trading on Tuesday.

There’s been no news from the rare earths explorer today but yesterday the company published its options prospectus for a placement of new fully paid ordinary shares.

Shares of the mineral exploration company currently trade for 30 cents apiece, up 5.26%.

Let’s go over the details of the company’s prospectus.

Arafura Resources options prospectus

Arafura has released details for 78,389,607 exercisable options, exclusively for investors who participate in its share placement program, announced on 12 August.

One free attachment option will be issued to placement investors for every two shares subscribed under the placement program. Each option has an exercise price of 34 cents per share on or before 18 months from the date of issue.

The company notes that no funds will be raised directly through the issue of new options but, if all of them are exercised, the company will receive $26.65 million before costs. Funds from the options will reportedly be used for developing the company’s Nolans project located in Australia’s Northern Territory and for general working capital purposes.

If all the options are issued, the company expects to add listed options as an additional class of securities in the company and to increase the number of options on issue by 78,389,607.

A total of 156.7 million new ordinary shares were issued to placement investors for a total of $41.5 million earlier this month. Those shares had an issue price of 26.5 cents each.

Arafura share price snapshot

The Arafura Resources share price is currently up 45% year to date. Meanwhile, the S&P/ASX 200 Materials Index (ASX: XMJ) is down 1.41% over the same period.

The company’s current market capitalisation is $526 million.

The post Why is the Arafura share price leaping 5% today? appeared first on The Motley Fool Australia.

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

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The S&P/ASX 200 Materials Index (ASX: XMJ) has gained 5.8% in August, but one ASX lithium share has soared far higher.

The Ragusa Minerals Ltd (ASX: RAS) share price has soared 293% from 7.5 cents at market open on August 1 to the current share price of 29.5 cents.

So why have investors been buying up Ragusa Minerals shares?

Why has this ASX lithium share soared?

This ASX lithium share has soared on the back of news out of its Northern Territory Lithium Project. Lithium is an essential component of electric vehicle (EV) batteries.

Ragusa is exploring lithium in the Litchfield Pegmatite Belt in the Northern Territory. The company also has a 100% interest in the Burracoppin Halloysite Project in Western Australia. Further, Ragusa wholly owns the Lonely Mine Gold Project in Zimbabwe and the Monte Cristo Gold Project in Alaska.

Since market close on 10 August, the Ragusa share price has soared 180% alone. On 11 August, Ragusa revealed historical exploration has affirmed high grade lithium perspectivity at the NT project.

This includes 8.03% Li2O3 and 7.25% Li2O6.

Commenting on this news, chairperson Jerko Zuvela said:

We have a significant opportunity to utilise our exploration and development experience to rapidly progress our NT Lithium Project and realise the massive upside value potential in a Tier 1 jurisdiction close to major infrastructure at a time of record lithium prices

Meanwhile, the outlook for the lithium price could also be providing Ragusa with a boost. In a note yesterday, analysts at Macquarie boosted the price target on multiple ASX lithium shares and upgrade their outlook on lithium prices. Macquarie said:

We upgrade medium-term lithium carbonate and hydroxide price outlook and expect prices to stay higher for longer. We also lift our regional lithium price forecasts to match the pricing strength in China.

Finally, in news today, Ragusa has received a price query from the ASX. The company highlighted it is in compliance with listing rules while noting the 11 August news. Ragusa said:

Given the results announced on this date, with drilling preparation works progressing, there has been a significant level of interest of upcoming works and results from the
project.

Ragusa share price recap

The Ragusa Minerals share price has exploded 275% in a year, while it has risen 242% in the year to date.

In contrast, the ASX 200 Materials Index has climbed 0.34% in a year, while it has lost 1.43% year to date.

Ragusa has market capitalisation of about $34.4 million based on the current share price.

The post Guess which obscure ASX lithium share has gained 293% so far in August appeared first on The Motley Fool Australia.

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

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The Santos Ltd (ASX: STO) share price is up more than 2% so far on Tuesday.

The S&P/ASX 200 Index (ASX: XJO) energy giant is currently trading for $7.55 per share.

Santos shares are now up 9% since the company released its half-year results on 17 August.

And what results they were!

Santos reported revenues of US$3.77 billion, an 85% leap over the prior corresponding period. Underlying net profit after tax (NPAT) leapt 300% to US$1.27 billion. And management declared an interim dividend of 7.6 US cents, up 38%.

So, following on those monster profits, is the Santos share price a buy?

Strong earnings, cash flow and dividends

For some insight into that question, we defer to Michael Slack, head of research at Martin Currie.

Asked by Livewire whether the Santos share price was a buy on the back of those strong results, Slack said it was a definitive buy.

According to Slack:

We see over 20% valuation upside in this stock, as Santos’ strong cashflow generation comes to fruition and the growth projects get appreciated by the market. So, any form of weakness is a good opportunity to take advantage of.

Slack has a bullish outlook for the Santos share price and the broader energy sector in the 2023 financial year.

The outlook is “very strong, particularly for LNG,” he said.

Slack added:

Europe is displacing 100 million tonnes of Russian pipeline gas into the EU, with LNG. That’s 25% of the existing supply and you can’t just turn on LNG supply overnight. So LNG prices in particular are likely to be strongly supported for a long period until you get mobilisation of new capacity. And that could take 4-5 years.

Santos itself is 70% gas revenue and is a low-cost producer. Very strong earnings, very strong cash flow to fund investments, and more dividends and returns to shareholders.

Slack noted that one obvious risk is the oil price.

“However, the oil market is structurally undersupplied, hasn’t been invested in for many years, and is struggling to keep up with the demand that is still impacted by COVID,” he said.

“We would say that the fundamentals of the oil market are still strong and will remain strong. The fundamentals of the gas market are even stronger.”

Santos share price snapshot

The Santos share price is up 14% so far in 2022. That compares to a year-to-date loss of 8% posted by the ASX 200.

The post Is the Santos share price a buy following the company’s monster profit? appeared first on The Motley Fool Australia.

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

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