Tag: Motley Fool

The Dogecoin (CRYPTO: DOGE) price is on a tear.

One Dogecoin is currently trading for 6.1 US cents. That’s up 15% since this time yesterday.

The meme token, with a Shiba Inu as its mascot image, ranks number 11 on the list of global top cryptos with a market cap of US$8 billion.

While the 15% gain will be welcomed by investors, Dogecoin has a long, long way to go before recovering its all-time high. That was set on 8 May last year, when the token reached 73.8 US cents. It’s down a gut wrenching 91.8% since that high, according to data from CoinMarketCap.

So, why are crypto investors bidding up the Dogecoin price today?

Risk assets lift on US Fed move

It looks like there are two factors helping drive the Dogecoin price higher today.

First, the US Federal Reserve lifted the official interest rate in the world’s largest economy by 0.75% yesterday (overnight Aussie time) to combat soaring inflation of 8.6%.

While that was the biggest single rate hike in 28 years, crypto and share markets alike had largely priced in the higher rate, with some share selling earlier in the week.

And Fed chair Jerome Powell helped soothe investor nerves, saying that outsized rate increases wouldn’t become common.

“Clearly, today’s 75 basis-point increase is an unusually large one and I do not expect moves of this size to be common,” he said overnight.

Risk assets gained strongly on the news, with the tech-laden Nasdaq closing up 2.5%.

And cryptos are broadly joining the rally.

Bitcoin (CRYPTO: BTC), the world’s first and biggest crypto, is up 6% over the past 24 hours.

What else is boosting the Dogecoin price today?

Another factor that looks to be boosting the Dogecoin price is progress with Dogechain, with the first testnet launched yesterday.

Dogechain, if successfully implemented, will enable Dogecoin to participate in decentralised applications (dApps) and decentralised finance (DeFi), offering some real life utility to the meme token.

According to Bitcoinist, “Rather than compete with Dogecoin, Dogechain harmonises with the meme coin and enhances it with smart contract capability.”

Additional real world uses, atop serving as an alternate to fiat currencies for transactions, could offer greater support for the Dogecoin price.

The post The Dogecoin price just leapt 15%. Here’s why appeared first on The Motley Fool Australia.

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More reading

• Why Bitcoin, Ethereum, and Dogecoin dropped and popped in the last 24 hours
• ‘Wherever there’s smoke there’s probably crypto,’ warns Dogecoin founder
• What’s the outlook for crypto prices in June? Industry insiders weigh in
• Why did crypto prices get massacred in May?
• Down 37%, it’s been a dog of a month for the Dogecoin price in May, here’s why

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 positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) has been enduring mixed fortunes on Thursday. At the time of writing, the ASX 200 is edging 0.05% lower at just under 6,600 points, having spent most of the day so far in the green.

So let’s delve deeper into these share market moves and take a look at the shares that are currently topping the ASX 200’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Thursday

Qantas Airways Limited (ASX: QAN)

The national carrier Qantas is first up this Thursday. In a surprise appearance on this list, a hefty 14.02 million Qantas shares have taken flight as it currently stands. It seems this volume may be the result of Qantas’ market-defying step lower today.

The airline has lost a nasty 3.5% of its value so far today and is now trading at $4.55 a share. So it seems it is this move downward that has sparked this elevated volume we see.

Pilbara Minerals Ltd (ASX: PLS)

Next up today we have ASX 200 lithium stock Pilbara. This Thursday has seen a sizeable 21.8 million Pilbara shares bought and sold thus far. There haven’t been any fresh developments out of Pilbara either.

But this lithium favourite has rebounded dramatically today. It’s currently up a pleasing 4.4% at $2.14 a share. It’s this big jump in valuations that has likely prompted so many Pilbara shares to trade today.

Telstra Corporation Ltd (ASX: TLS)

Finally today, we have the ASX 200 blue-chip telco Telstra. This Thursday has seen a whopping 37.1 million Telstra shares trade on the markets so far. But alas, we don’t exactly know why, seeing as there hasn’t been anything new out of Telstra. The company has seen some strong gains today though.

Telstra shares are presently up a healthy 1.7% at $3.895 each. But that comes after the telco rose as high as $3.91 a share earlier in today’s session. It’s this healthy rise that has probably elicited the volumes we see, considering how low Telstra’s share price is compared with its market capitalisation.

The post Here are the 3 most heavily traded ASX 200 shares on Thursday appeared first on The Motley Fool Australia.

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More reading

• Despite rising bond yields, here’s why I’ll keep investing in ASX shares
• Market crash: A message from our CIO
• Fed rate rise breaks 28-year record. Will the RBA increase interest rates as aggressively?
• Why is the Pilbara Minerals share price surging 5% on Thursday?
• Appen share price rebounds 12%, topping ASX 200 gainers

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. 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 positions in and has recommended Telstra Corporation 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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It has been another disappointing day of trade for the Westpac Banking Corp (ASX: WBC) share price.

Earlier today, the banking giant’s shares dropped to a new 52-week low of $19.26. While this is disappointing, it does mean that the dividend yield on offer with its shares is widening.

In light of this, let’s now take a look to see what is expected from the Westpac dividend in the coming years.

What are analysts forecasting for the Westpac dividend?

According to a note out of Goldman Sachs, as with the rest of the big four, its analysts are expecting the Westpac dividend to increase consistently through to FY 2024.

In case you missed it, in FY 2021 Australia’s oldest bank rewarded its shareholders with a $1.18 per share fully franked dividend.

Goldman expects this to be lifted to $1.23 per share in FY 2022. Based on the current Westpac share price, this implies a potential fully franked dividend yield of almost 6.4%.

Pleasingly, the broker then expects the bank to increase its dividend to a fully franked $1.29 per share in FY 2023. This equates to a very generous 6.7% yield for investors at today’s prices.

Finally, a 17 cents per share increase is forecast in FY 2024, bringing the Westpac dividend to $1.46 per share. If Goldman’s estimate proves accurate, this will mean a sizeable fully franked 7.5% dividend yield for investors.

Is the Westpac share price in the buy zone?

The note reveals that Goldman Sachs only has a neutral rating on the Westpac share price at the moment.

However, with a price target of $27.29, this still implies significant potential upside of approximately 41% for investors over the next 12 months. That’s not bad at all for a neutral rating!

The post Here’s the Westpac dividend forecast through to 2024 appeared first on The Motley Fool Australia.

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More reading

• ASX 200 bank shares languish on Thursday despite market lift
• Why are ASX 200 bank shares having another day to forget?
• ASX 200 bank shares tumble: Citi says time to buy
• ASX 200 has its worst week in two years
• What’s impacting the Westpac share price on Friday?

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs. The Motley Fool Australia has recommended 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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The Newcrest Mining Ltd (ASX: NCM) share price is heading north today despite no announcements from the company.

At the time of writing, shares in Australia’s largest gold miner are up 2.71% to $23.88.

In comparison, shares in Newcrest’s peers Northern Star Resources Ltd (ASX: NST) and Evolution Mining Ltd (ASX: EVN) are up 1.38% and 1.48% respectively.

What’s happened to Newcrest shares?

Investors are bidding up the Newcrest share price as the price of gold holds its ground at U$1,832 per ounce.

The yellow metal has dropped 2% since last Friday as the United States consumer price index report was released.

As inflation recorded a peak of 8.6% in May, investors braced for more aggressive rate hikes by the Federal Reserve.

Traditionally, when interest rates climb, investors shift their assets away from gold into more safer alternatives like government bonds.

However, with the latest 0.75% rate hike already priced in, it appears investors are bargain hunting.

Newcrest shares have fallen almost 18% since hitting a 52-week high of $28.96 in April.

Furthermore, the S&P/ASX 300 Metals and Mining Industry Index (ASX: XMM) is recovering lost ground to climb 0.99% to 5,739.2 points.

The sector contains companies that are involved with gold, steel and precious metals.

It’s worth noting that if more aggressive rate hikes occur in 2022, this would likely drive investors away from gold.

Newcrest share price summary

The Russian war in Ukraine drove up commodity prices including gold which soared above the psychological US$2,000 barrier.

However, this was short-lived as China faced a COVID-19 crisis along with inflation movements that brought down the gold price.

Following a volatile 2022, the Newcrest share price is down around 3% for the period.

The company has a price-to-earnings (P/E) ratio of 15.17 and commands a market capitalisation of roughly $20.74 billion.

The post Why is the Newcrest share price glittering on Thursday? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Why has the Newcrest share price tumbled 9% in a month?
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• Here’s why JPMorgan is bullish on the Newcrest share price

Motley Fool contributor Aaron Teboneras has positions in Northern Star Resources Limited. 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 price of iron ore has gradually wormed upwards from a low point of US$84.50 per tonne in November. It now trades at US$132.50 per tonne.

A range of factors have plagued iron ore markets these past 12 months, and the calamity continues to this date.

Most recently, renewed fears of COVID-19 in China have sparked widespread lockdowns, causing prices to spiral downwards to 2-week lows on the softening demand outlook.

The price of iron ore and the benchmark S&P/ASX 200 Index‘s (ASX: XJO) return this year to date are plotted below.

What’s the outlook for iron ore?

Despite the recent pullback, research corroborates that iron ore prices might remain buoyant for the remainder of 2022.

A research note by Wood Mackenzie reckons there’s room for it to head higher still.

“Beijing’s balancing act between human safety and economic stability remains the key short term driver of iron ore,” it said.

“Our H2 [iron ore] forecast is $130/t, marginally below a projected $140/t for H1,” it added.

Meanwhile, Fitch Solutions revised its forecasts in May and now projects a period of higher prices over the coming 12–18 months.

Chinese demand again appears to be central to the debate. Fitch Solutions said:

We are revising upwards our iron ore price forecast for 2022 and 2023 from US$90/tonne and US$75/tonne to US$120/tonne and US$110/tonne respectively, as prices reversed course in December 2021 and are embarking on an uptrend after collapsing in mid-2021.

Chinese demand has once again started picking up and will remain strong in 2022-2023, with the government’s renewed stimulus towards the infrastructure sector in the face of slowing economic growth.

We believe that prices will receive support from supply constraints and renewed Chinese demand strength in 2022, such that the annual average iron-ore price for 2022 and 2023 will remain above pre-Covid-19 levels

That sentiment is echoed by Randal Jenneke, head of Australian Equity at T.Rowe Price. In a recent note, Jenneke said that “more fiscal stimulus to support growth in China could help to support the price of iron ore”.

As it goes, there appears to be good support behind iron ore remaining top-heavy into the remainder of 2022.

The post What’s the outlook for the iron ore price for the remainder of 2022? appeared first on The Motley Fool Australia.

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More reading

• Guess which 2 ASX rare earths shares are going gangbusters today. Hint: They’re not Lynas
• Shares in pandemic winner Super Retail Group trading lower than pre-COVID
• Why the Adore Beauty share price is jumping but Kogan is falling
• BrainChip share price surges 11% as ASX tech stocks rally on Thursday
• Despite rising bond yields, here’s why I’ll keep investing in ASX shares

Motley Fool contributor Zach Bristow 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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It’s been a big week for ASX rare earths shares, with many announcing exciting news to the market.

Of course, fans of the sector will be aware of Lynas Rare Earths Ltd (ASX: LYC)’s US$120 million deal with the United States Department of Defense, announced on Tuesday.

But the ASX rare earths giant isn’t one of the shares leaping on Thursday. Let’s take a look at what’s boosting these stocks higher today.

2 ASX rare earths shares going gangbusters today

Australian Rare Earths Ltd (ASX: AR3)

The Australian Rare Earths share price is launching 20% higher to trade at 42 cents on Thursday.

Interestingly, there’s been no news from the rare earths explorer today. However, it did release an update on exploration activities at its flagship Koppamurra Project on Tuesday.

It announced the latest results from two recent drilling campaigns completed at the project.

They show consistent high-grade occurrences of the magnet rare earth elements across thick, near-surface intersections. That’s expected to allow for expedient drilling, rapid delineation of JORC-compliant mineral resources, and future low-cost mining.

While the news saw the ASX rare earths share tumble 8.3% on Tuesday, it’s possible that it’s helping to contribute to today’s gains.

American Rare Earths Ltd (ASX: ARR)

The American Rare Earths share price is also leaping upwards today, gaining 25% to trade at 27.5 cents.

Tuesday also saw assay results released by American Rare Earths. The stock tumbled 5.4% on the release and a further 15.4% on Wednesday. That’s despite the results depicting a potentially exciting future for the ASX rare earth share.

Of 667 samples from the company’s La Paz project, located in Arizona, 332 were found to have rock type associated with higher rare earth grades, while two drill holes showed extensive rare earth enrichment.

American Rare Earths CEO and managing director Chris Gibbs said the results showed the project’s southwest zone could expand its JORC resource.

“An upgrade [to the JORC resource] gives La Paz the potential to be one of the largest rare earths projects in North America,” said Gibbs.

The post Guess which 2 ASX rare earths shares are going gangbusters today. Hint: They’re not Lynas appeared first on The Motley Fool Australia.

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More reading

• Shares in pandemic winner Super Retail Group trading lower than pre-COVID
• Why the Adore Beauty share price is jumping but Kogan is falling
• BrainChip share price surges 11% as ASX tech stocks rally on Thursday
• Despite rising bond yields, here’s why I’ll keep investing in ASX shares
• Up 566% in a year, Lake Resources share price surges 10% today

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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Super Retail Group Ltd (ASX: SUL) was a scorching pandemic winner. The retailer’s shares skyrocketed 230% from a trough in March 2020 of about $4 to a peak of $13.73 in June 2021.

Immediately before the COVID-19 market crash, the Super Retail share price was $9.66. Today, the stock is trading lower than that. It’s currently $8.52, up 3.3% for the day on Thursday.

During Tuesday’s market meltdown, the shares hit a new 52-week low of $8.06.

Super Retail Group owns four brands — Rebel (sportswear), BCF (boating, camping, and fishing supplies), Supercheap Auto (car accessories), and Macpac (hiking equipment and clothing).

Over the first 18 months of the pandemic, the Super Retail share price soared. One of the reasons it did so well was because of the international border and state border closures, which prevented overseas and interstate trips. People got into their cars and went boating, camping, and fishing within their own states instead.

FY22 headwinds impacting Super Retail share price

The second part of the pandemic has brought some challenges for Super Retail Group.

In FY22, extended lockdowns during the second half of 2021 affected sales.

With the Omicron strain rife, staff absences and wage increases to keep them have been headwinds. And global supply issues have affected Super Retail as much as any other ASX retail share.

To deal with these headwinds, Super Retail built a strong inventory position for the second half of FY22 to counteract supply chain disruptions. It also opened more stores and continued to invest in ramping up its digital presence to encourage more online sales.

Reduced sales and higher costs contributed to a profit tumble in first-half earnings.

The latest update for ASX investors

In a presentation at the recent Macquarie Australia Conference, Super Retail revealed group sales are up.

YTD like-for-like group sales are up 24.7% in FY22 compared to FY20, and down 1.3% on FY21.

Super Retail has also added a net 30 stores to its network (as of January 2022). Its active club members — defined as a customer who has shopped during the past year — increased by 2.4 million to a total of 8.7 million between H1 FY20 and H1 FY22.

Online fulfilment costs have decreased by 120 bps as a result of both lower freight expenses and higher freight recovery over the same time frame.

Online sales have increased from 7% to 23% of total sales between H1 FY19 and H1 FY22.

Overall, the company said it was making progress on its refreshed corporate strategy announced in 2019. The presentation focused on four key areas including store network optimisation and refurbishment, digital and omni-retail capability, personalisation and customer loyalty, and supply chain efficiency.

According to the presentation:

The Group’s investment for future growth is delivering business improvements. These will provide a platform to sustainably generate value for our shareholders.

What do brokers think of the Super Retail share price?

Citi has a buy rating on Super Retail shares and a 12-month price target of $14. The broker believes the market’s concerns are overplayed.

Citi says:

We continue to view the market’s concerns about Super Retail’s elevated inventory position to be significantly overplayed given these strong sales trends, likely minimal risk of ageing given where the inventory is held and management’s perspective on the risks to its supply chain.

Citi is expecting Super Retail to pay a fully franked dividend of 66 cents per share in FY22 and 64 cents per share in FY23. That’s a grossed-up dividend yield of about 11% per year based on today’s share price.

Credit Suisse also says buy and has the same price target of $14. The broker expects a grossed-up dividend yield of 10.75% in FY22 and 8.3% in FY23.

The post Shares in pandemic winner Super Retail Group trading lower than pre-COVID appeared first on The Motley Fool Australia.

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More reading

• 2 ASX dividend shares that experts rate as buys
• ASX retail shares tumble following RBA rate rise
• Analysts name 2 ASX 200 dividend shares to buy now
• Experts say these 2 ASX dividend shares are buys
• Why are ASX 200 retail shares climbing on Friday?

Motley Fool contributor Bronwyn Allen has positions in Super Retail Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Super Retail Group Limited. The Motley Fool Australia has positions in and has recommended Super Retail 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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The Adore Beauty Group Ltd (ASX: ABY) share price is having a much-needed positive day.

In afternoon trade, the online beauty retailer’s shares are up 7% $1.06.

Why is the Adore Beauty share price rising?

There have been a number of catalysts for the rise in the Adore Beauty share price today.

The first appears to have been a rebound in the tech sector today. This has seen the S&P/ASX All Technology Index jump 1.5% today, which compares favourably to the ASX 200 index and its 0.35% gain.

In addition to this, it is worth noting that the Adore Beauty share price sank to a record low of 98.5 cents on Wednesday. This could mean that some bargain hunters are swooping in on the belief that its shares have been oversold.

But the main driver could be a broker note out of UBS this morning.

While the broker believes it is too soon to be positive on online retailers, it has retained its buy rating on Adore Beauty’s shares with a reduced price target of $2.10. This is approximately double where its shares trade today.

Unfortunately for Kogan.com Ltd (ASX: KGN) and Temple & Webster Group Ltd (ASX: TPW) shareholders, their shares aren’t faring too well today. That’s because UBS has downgraded them to sell and neutral ratings, respectively. It has also retained its neutral rating on Redbubble Ltd (ASX: RBL) shares.

UBS has concerns about unit economics, which it believes are worse that before the pandemic, as well as supply chain and consumer spending headwinds. Food for thought.

The post Why the Adore Beauty share price is jumping but Kogan is falling appeared first on The Motley Fool Australia.

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More reading

• Experts think these 2 ASX shares have more than 100% upside after the plunge
• This top broker thinks the Kogan share price has 35% upside
• Waiting to start investing in ASX shares? Today could be a brilliant time to do it
• Analysts are tipping these ASX growth shares as buys
• 2 ASX growth shares I’d buy right away with $2,000

Motley Fool contributor James Mickleboro 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 Kogan.com ltd, REDBUBBLE FPO, and Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has positions in and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Adore Beauty Group Limited and Temple & Webster Group Ltd. 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 BrainChip Holdings Ltd (ASX: BRN) share price is surging today despite no new announcements from the company.

At the time of writing, the artificial intelligence (AI) technology company’s shares are up 11.5% to 87 cents.

What’s happening with BrainChip today?

Investors are bidding up the BrainChip share price following a strong rebound across the S&P/ASX All Technology Index (ASX: XTX).

After falling almost 10% in a week, the tech sector is powering ahead by 1.63% to 1,854.5 points today.

In addition, it appears investors are taking advantage of the share price weakness in BrainChip.

It fell to a low of 76.5 cents yesterday, a level not seen since the end of December 2021.

BrainChip shares recorded seven days of consecutive losses from 6 June until yesterday, shedding 30% in value.

Looking on the bright side, BrainChip shares will be added to the S&P/ASX 200 Index (ASX: XJO) from 20 June.

The S&P Dow Jones Indices announced its quarterly rebalance of the S&P/ASX Indices at the beginning of this month.

Most fund managers are required to buy or sell shares within specific indexes such as the ASX 200. With this in mind, investors usually like to take pre-emptive action in buying these shares before being accessible to fund managers.

BrainChip share price snapshot

Despite tumbling in recent times, the BrainChip share price is up 60% over the last 12 months.

Year-to-date it has also fared considerably well in spite of the volatility, up 28%.

The company’s share price reached an all-time high of $2.34 in January 2022 before reversing its incredible gains.

On valuation grounds, BrainChip commands a market capitalisation of around $1.5 billion.

The post BrainChip share price surges 11% as ASX tech stocks rally on Thursday appeared first on The Motley Fool Australia.

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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 S&P/ASX 200 Index (ASX: XJO) is having a fairly decent day today, up 0.44% at the time of writing to just over 6,600 points. But even so, no one can deny it has been a tough time for ASX shares (and investors) of late.

Just in the past week alone, the ASX 200 has lost almost 7% of its value. Year to date in 2022, the ASX 200 is now down by a nasty 12.6% or so.

It’s hard to pin down exactly what has spooked investors so convincingly over 2022 thus far. But it’s almost certain that higher inflation and the higher interest rates that walk hand in hand with it are at least partially responsible.

Backtrack to the start of the year, and no one was really talking about inflation. But now, it is the hottest of topics in the investing world (and perhaps everywhere else too). Just last night, the US Federal Reserve raised American interest rates by an unusually large 75 basis points.

Rising interest rates have another consequence, aside from boosting mortgage repayments. They result in an increase in the interest rates paid by new government bonds.

Government bonds might not be of much interest to many investors. But the ‘risk-free’ rates of return they pay have far-reaching consequences.

Bonds are typically considered safer investments than shares. Thus, if the rate of interest they pay rises, it reduces the appeal of having capital in more risky assets like shares. Thus, it can be summarised that higher bond yields equate to lower shares.

But I’m still sticking with shares.

Why?

Well, the simple answer is that there is no better alternative to growing one’s wealth. No matter what interest rates, the global economy, commentators, or the in-laws are saying and doing, time and time again, shares have proven to be the best long-term investment for building wealth in this world.

Why investing in ASX shares is a no-brainer

Want proof? Every year, exchange-traded fund (ETF) provider Vanguard releases an index chart that plots the returns of major asset classes over a three-decade timespan.

The latest one was released in August last year, which our chief investment officer Scott Phillips went over at the time.

It showed that Australian shares had averaged a return of 9.7% per annum every year since 1991. US shares were slightly higher at 10.8%, while other international shares were slightly lower at 8.3%.

But you know what didn’t beat Australian shares? Australian property. It averaged 8.6% per annum between 1991 and 2021.

Neither did Australian bonds. They fetched an average of 7% per annum.

They say cash is king, but in the game of long-term investing, it is a pauper, with an average return of just 4.6% per annum.

According to Vanguard, $10,000 invested in Australian shares in 1991 would have been worth $160,498 by August 2021. But $10,000 invested in bonds would come up at just $75,807, and in cash, just $38,938.

This stellar return from ASX shares came despite numerous global events and catastrophes. We had the dot-com crash, 9/11, the global financial crisis, the Euro debt crisis, Brexit, and, of course, COVID.

Over this timespan, we also had inflation, high unemployment, market volatility, and more than one recession. And still, ASX shares come out on top, and it’s not even close.

So that’s why I’m sticking with shares. There is simply no better option. So ignore the volatility and focus on what really matters.

The post Despite rising bond yields, here’s why I’ll keep investing in ASX shares appeared first on The Motley Fool Australia.

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• Appen share price rebounds 12%, topping ASX 200 gainers
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• Westpac says consumer confidence is falling. Could this actually be good news?

Motley Fool contributor Sebastian Bowen 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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