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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Australia and New Zealand Banking Group Ltd (ASX: ANZ)

According to a note out of Credit Suisse, its analysts have retained their outperform rating and $30.80 price target on this banking giant’s shares. Credit Suisse continues to rate ANZ as its preferred pick among the big four banks. This is due to its preference for banks with exposure to business banking, which it expects to fare better in the current environment. The ANZ share price is trading at $21.58 on Wednesday.

Lynas Rare Earths Ltd (ASX: LYC)

A note out of Macquarie reveals that its analysts have retained their outperform rating and $12.80 price target on this rare earths producer’s shares. This follows news that the company has been awarded a US$120 million contract from the US government to build a heavy rare earths facility. Macquarie was pleased with the news and expects it to lead to the commencement of production in FY 2025. This is a year earlier than previously anticipated. The Lynas share price is fetching $8.88 today.

Xero Limited (ASX: XRO)

Analysts at Ord Minnett have retained their buy rating and $97.00 price target on this cloud accounting platform provider’s shares. Ord Minnett notes that Xero has announced that it is increasing subscription prices in the ANZ and UK markets. Its analysts expect this to boost the company’s average revenue per user metric. The Xero share price is trading at $77.58 this afternoon.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 bank shares having another day to forget?
• 3 ASX 200 shares stretching higher on Wednesday
• Down 45% in 2022, is the Xero share price in the buy zone?
• Why Computershare, Lithium Plus, Lynas, and ResApp shares are pushing higher
• ASX 200 midday update: ResMed’s US$1bn acquisition, tech shares continue to sink

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 Xero. The Motley Fool Australia has positions in and has recommended Xero. 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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In case you were wondering, the Crown Resorts Ltd (ASX: CWN) share price is exchanging hands for the last time on the ASX today.

At the time of writing, the casino operator’s shares are up 0.23% to $13.08.

Why is Crown shares ceasing to exist from tomorrow?

The Crown share price will be suspended from close of trading today following the company’s latest update on its takeover.

In its statement, Crown advised that the Federal Court of Australia made orders approving the proposed $8.89 billion acquisition.

By way of a scheme of arrangement, Blackstone entity, SS Silver II Pty Ltd will become the new Crown owners after being green-lit.

Based in the United States, Blackstone is the world’s largest investment firm with approximately $915 billion in assets under management.

Crown is expected to lodge an office copy of the court orders with the Australian Securities and Investments Commission (ASIC) today. This means that the scheme will become legally effective.

While the company’s shares will be suspended, its subordinated notes under the code “CWNHB” will continue to be traded.

Blackstone will pay out $13.10 in cash per share to Crown shareholders which they will receive on 24 June.

Crown share price summary

A disastrous 2020/21 for Crown led its shares to record heavy falls over the past couple of years.

An AUSTRAC investigation along with issues regarding renewal of its gambling licence in Victoria plagued Crown shares.

However, its shares picked up steam in 2022 on the back of the proposed takeover offer.

Year-to-date, Crown shares are up almost 10%

On valuation grounds, Crown presides a market capitalisation of about $8.84 billion, with a tad over 677 million shares outstanding.

The post Guess which ASX 200 share is trading for the last time today? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares that avoided today’s sell-off
• 3 ASX 200 shares rocking new 52-week highs on Thursday
• Why Boss Energy, Crown, Magellan, and Shaver Shop shares are rising
• ASX 200 midday update: Magellan rebounds, Crown’s takeover boost
• Why is the Crown share price beating the ASX 200 today?

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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REA Group Limited (ASX: REA) is having a tough time in the market in 2022. The REA share price is down 6.18% at the time of writing and has fallen below the $100 mark for the first time since the COVID-19 crash in February 2020. Year to date, REA shares are down 42%.

The question is, why?

Let’s look at the headwinds for the real estate classifieds giant that could be affecting its share price.

The ASX tech share sell-off

REA is an ASX tech share and the second-largest constituent in the S&P/ASX All Technology Index (ASX: XTX) by market capitalisation. And we all know what has happened to tech shares in 2022.

The tech sell-off in 2022 is the first headwind for the REA share price. The All Tech index is down 39.6% year to date. Ouch! But consider what this means, given REA is down by almost the same amount.

You know the saying, ‘Don’t throw the baby out with the bathwater’? Well, that’s what some ASX investors may be doing with REA.

Tech shares are getting hammered and REA appears to be going down with its sector compatriots.

Tech shares are out of favour right now because of economic conditions. Many ASX tech companies are young and not yet profitable. Many also have large debts required to fund their growth. So, rising inflation and interest rates aren’t good for them.

But REA isn’t a young company. It’s certainly both an ASX tech share and a growth share, but it’s also an established and profitable business. In its Q3 update for FY22 released last month, REA reported 27% year-on-year (YoY) growth in earnings before interest, tax, depreciation and amortisation (EBITDA) to $523 million for the first nine months of FY22.

Missing the mark as house prices decline

That third-quarter report is actually the second headwind, though. The results missed some analysts’ estimates and the REA share price lost 8% in value on the day they were released.

The third headwind is cooling conditions in Australia’s two biggest property markets, Sydney and Melbourne. Any negative news about property prices tends to put ASX investors off REA.

If we look at recent historical price movements, there’s a clear correlation between the REA share price and Australian property prices.

For example, the REA share price began rising in 2019 at the same time as the property market began its recovery from the 2017/2018 downturn.

The company’s shares also skyrocketed during the pandemic to an all-time high of $180.67 in November 2021 — just as CoreLogic was reporting the fastest annual growth in national home values since 1989.

In the three months to May 31, the median house price has fallen 1.3% in both Sydney and Melbourne, according to the latest CoreLogic data.

Is this a buying opportunity?

REA is a market darling stock that has delivered incredible share price gains over the long term.

Over 10 years, the REA share price has ascended 645%. Let’s compare that performance to a couple of other darlings.

Macquarie Group Ltd (ASX: MQG) shares have grown by 940% over the same time frame. CSL Limited (ASX: CSL) shares are up 672%, Rio Tinto Limited (ASX: RIO) shares are up 106%, and Commonwealth Bank of Australia (ASX: CBA) shares are up 80%.

So, it’s certainly fair to say REA has one of the most outstanding histories for share price growth among the ASX 200 blue chips.

A few brokers see the current weakness in the REA share price as an opportunity to buy the dip.

What the experts think of the REA share price

REA recently released an investor presentation outlining its evolution from a residential listing portal to a property, financial services, and data business.

Morgans liked what it heard and retained its add rating on REA shares with a slightly reduced price target of $144.

Goldman Sachs is more bullish. It has a buy rating on REA and a $167 price target on the shares.

The broker likes that REA management “remains confident it can achieve double digit revenue/EBITDA growth through the cycle with positive jaws”.

Furthermore, Goldman said:

Overall, we believe these commitments illustrate the pricing power of REA, pipeline of value-add products, and its ability to offset any potential macro weakness, and now forecast FY22-24E Sales growth of 10% despite challenging volume listings.

A recent Market Matters report also suggested REA could be worth buying.

As we reported, the Market Matters team said: “[Tax loss-selling] can often send already depressed stocks down into oversold/deep value areas, which can be attractive for the well-informed investor. The key is determining the difference between value and a company simply in trouble.”

Market Matters said REA was among three examples of “quality” ASX shares that might be in this boat.

The report said REA is an “almost monopolistic-style business” with “useful pricing power”.

Market Matters said REA would be “compelling” when its share price fell below $100 — which it has today.

The post Why has the REA share price crashed by 40% in 2022? appeared first on The Motley Fool Australia.

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More reading

• 2 blue chip ASX 200 shares that Goldman Sachs rates as buys
• 3 ASX shares to pounce on after tax-loss selling: report
• Here’s why I think these ASX tech shares are buys in June
• Here are 2 ASX 50 shares analysts rate as buys
• Can the REA share price turn over a new leaf in 2022?

Motley Fool contributor Bronwyn Allen has positions in CSL Ltd., Commonwealth Bank of Australia, Macquarie Group Limited, and REA Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. and Goldman Sachs. The Motley Fool Australia has recommended Macquarie Group Limited and REA 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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Santos Ltd (ASX: STO) shares haven’t been immune to the past week’s selling action.

But despite dropping 8% over the past five days, the S&P/ASX 200 Index (ASX: XJO) energy company remains up 22% year-to-date.

At the current price of $8.03 per share, Santos has a market cap of $27.1 billion.

But according to analysts at Morgans, those numbers are likely to head higher over the next 12 months.

Diversified earnings base to drive outperformance

Santos shares make it on the top 12 ASX 200 shares that Morgans believes “offer the highest risk-adjusted returns over a 12-month timeframe supported by a higher-than-average level of confidence”.

With its focus on oil and gas production and exploration, Santos also lists among the broker’s most preferred sector exposures over the coming year.

Andrew Tang, equity strategy analyst at Morgans, explained why Santos shares made the top 12 list on Livewire.

According to Tang:

We expect the resilience of Santos’ growth profile and diversified earnings base see it best placed to outperform against a backdrop of a broader sector recovery. While pre-FEED, we see Dorado as likely to provide attractive growth for Santos, while its recent acquisition increasing its stake in Darwin LNG has increased our confidence in Barossa’s development.

One area Tang recommends keeping a close eye on is its operations in Papua New Guinea.

“PNG growth meanwhile remains a riskier proposition, with the government adamant it will keep a larger share of economic rents while operator Exxon has significantly deferred growth plans across its global portfolio,” he said.

How have Santos shares performed longer term?

Santos shares have not only outperformed year-to-date, but they’ve also smashed the benchmark returns over the past five years, gaining 164%. By comparison, the ASX 200 is up 15% over that same period.

At current prices, Santos shares pay a 2.3% trailing dividend yield, 70% franked.

The post ‘Resilient growth profile’: Why this broker is tipping Santos shares to outperform appeared first on The Motley Fool Australia.

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More reading

• This fund manager is optimistic on these 2 leading ASX 200 energy shares
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 energy shares are up 40% so far this year. Can they run further?
• Why did the Santos share price smash a 2-year high on Thursday?

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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another sizeable decline. At the time of writing, the benchmark index is down 1.3% to 6,597.3 points.

Four ASX shares falling more than most today are listed below. Here’s why they are dropping:

Block Inc (ASX: SQ2)

The Block share price is down 6% to $87.29. This follows another poor night for this payments company’s NYSE listed shares on Tuesday. However, Block isn’t the only tech share falling today. With heavy declines being recorded across the sector, the S&P ASX All Technology index is down 3% at the time of writing.

Nanosonics Ltd (ASX: NAN)

The Nanosonics share price is down 3% to $2.99. This appears to have been driven by broad market weakness and a broker note out of Morgans. In respect to the latter, this morning Morgans retained its add rating but slashed its price target on the infection prevention company’s shares by 10% to $4.86. The broker has downgraded its earnings forecasts to reflect higher costs and softer growth.

St Barbara Ltd (ASX: SBM)

The St Barbara share price is down 3% to $1.10. Investors have been selling St Barbara and other gold miners after a pullback in the gold price overnight. This has led to the S&P/ASX All Ordinaries Gold index tumbling 1.4% this afternoon.

Woodside Energy Group Ltd (ASX: WDS)

The Woodside share price is down 3% to $32.03. The catalyst for this was weakness in energy prices overnight. This has put pressure on energy producers like Woodside on Wednesday. So much so, the S&P/ASX 200 Energy index is down 2.5% at the time of writing.

The post Why Block, Nanosonics, St Barbara, and Woodside shares are dropping appeared first on The Motley Fool Australia.

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More reading

• Why is the Block share price tumbling another 5%
• This fund manager is optimistic on these 2 leading ASX 200 energy shares
• ASX 200 midday update: ResMed’s US$1bn acquisition, tech shares continue to sink
• Can the St Barbara share price recover its losses in 2022?
• Why BHP, Block, Harvey Norman, and PointsBet shares are sinking

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 Block, Inc. and Nanosonics Limited. The Motley Fool Australia has positions in and has recommended Block, Inc. and Nanosonics 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 S&P/ASX 200 Health Care Index (ASX: XHJ) is in the red today, but this one ASX share is bucking the trend.

The ResApp Health Ltd (ASX: RAP) share price is currently at 17 cents, a 3.03% gain. It comes despite the ASX 200 healthcare index being down 2.11% so far today.

ResApp’s share price is trading at its highest level since 26 June 2020.

Let’s take a look at why ReApp Health is having such a good day.

Why is this ASX share rising?

ResApp shares are climbing a further 3% today after rocketing a massive 50% yesterday.

ResApp is a digital health company that works on smart phone apps to diagnose and manage respiratory disease.

Investors appear to be continuing to snap up Resapp shares today after pharmaceutical giant Pfizer improved its takeover offer for the company.

ResApp had entered a trading halt on 31 May pending the announcement and emerged from the freeze yesterday.

Pfizer has agreed to boost its offer from 11.5 cents per share to 14.6 cents per share or 20.7 cents per share.

ResApp originally announced it had entered an agreement with Pfizer in April. The two companies also entered a research and development licence agreement to work together on COVID-19 products.

ResApp’s CEO and managing director Tony Keating said the revised offer provides an “attractive premium” to the ResApp share price. He added:

We believe that it represents significant value for all shareholders and the ResApp Board strongly recommends shareholders vote in favour of the transaction in the absence of a superior proposal.

The final offer will depend on the results of a clinical validation study on Resapp’s COVID-19 cough detection tool.

The results of this study are expected to be announced on or near 20 June.

Share price snapshot

The ResApp shares price has soared by nearly 55% in the past 12 months while it is up 162% year to date.

In contrast, the S&P/ASX 200 Health Care Index has slipped nearly 15% in the past year and also year to date.

ResApp has a market capitalisation of around $146 million.

The post This ASX share is defying the odds to crack new 52-week highs appeared first on The Motley Fool Australia.

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More reading

• Why Computershare, Lithium Plus, Lynas, and ResApp shares are pushing higher
• Here’s why the ResApp share price is rocketing 50% today
• Why Australian Clinical Labs, Lake Resources, PolyNovo, and ResApp are rising
• ResApp share price halted ahead of Pfizer takeover update

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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S&P/ASX 200 Index (ASX: XJO) bank shares are having another rough day of it, as investors remain cautious ahead of tonight’s interest rate decision by the US Federal Reserve.

In late afternoon trading the ASX 200 is down 0.6%, with all but one of the ASX 200 bank shares trailing the benchmark.

Down 0.6%, the Commonwealth Bank of Australia (ASX: CBA) share price is the best performer among the big four banks at time of writing.

Meanwhile, the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is down 1.3%; the National Australia Bank Ltd (ASX: NAB) share price is down 1.2%; and Westpac Banking Corp (ASX: WBC) shares are down 1.1%.

Why are ASX 200 bank shares underperforming?

The big banks can benefit from aspects of rising interest rates. Mainly, they’re able to increase their net interest margins as rates climb from historic lows.

However, rising rates can negatively impact the demand for new mortgage loans. And, crucially, higher rates could see a spike in the number of bad debts held by ASX 200 bank shares.

Today’s underperformance could be tied to the latter issues, as investors mull over the implications of a precautionary letter sent to the banks yesterday by Australian Prudential Regulation Authority (APRA) chair Wayne Byres.

What is APRA concerned about?

The financial regulator is concerned that rising interest rates could result in a rise in bad debts.

As the Australian Financial Review noted, APRA’s March quarter data indicated that 23.1% of new mortgages are considered risky, with debt-to-income ratios of at least six times. While that’s down from the 24.3% in the December quarter, it’s well above the 18.9% figures from March 2021.

According to APRA, the ASX 200 bank shares “need to have systems in place to limit growth in higher risk residential mortgage lending, such as loans at high debt-to-income multiples or high loan-to-valuation ratios”.

Byres continued:

In the current environment, with high household indebtedness and rising interest rates, it’s essential for banks to prudently and proactively manage risks in residential mortgage lending.

APRA expects lenders to closely monitor housing lending risks to ensure that aggregate portfolio risks remain within their risk appetite and that standards for new lending remain prudent.

With stricter lending standards, the ASX 200 bank shares’ lucrative home lending businesses could face some additional headwinds.

The post Why are ASX 200 bank shares having another day to forget? appeared first on The Motley Fool Australia.

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More reading

• What’s going on with the CBA share price on Wednesday?
• Here’s the NAB dividend forecast through to 2024
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 bank shares tumble: Citi says time to buy
• The CBA share price is down 5%. Should investors jump on this?

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 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 S&P/ASX 200 Index (ASX: XJO) is continuing to sell off over this Wednesday’s trading session. At the time of writing, the ASX 200 has lost another 1.12% so far to around 6,611 points. 

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

The 3 most traded ASX 200 shares by volume this Wednesday

Telstra Corporation Ltd (ASX: TLS)

Blue-chip Telstra is our first company to take a look at today. So far this Wednesday, a hefty 16.73 million of this ASX 200 telco’s shares have changed owners. There hasn’t been any news or announcements out of Telstra so far. However, the Telstra share price is doing something very interesting.

The telco’s shares are currently bucking the market and are up a healthy 2.4% at $3.84 each. Thus, it is probably this outperformance and healthy rise that is resulting in so many shares flying around the markets today.

South32 Ltd (ASX: S32)

Diversified ASX 200 mining company South32 is next up this Wednesday. So far today, a sizeable 16.9 million South32 shares have been bought and sold on the share market. We haven’t had too much out of this company either, save for a share buyback notice which could be boosting volumes alone.

But South32 has also taken quite a tumble. South32 shares are currently down by 3.01% at $4.35 each. So it’s probably a combination of the buyback and this share price fall that is resulting in the company’s presence on this list today.

Pilbara Minerals Ltd (ASX: PLS)

ASX 200 lithium share Pilbara Minerals is our third, final, and most traded ASX 200 share so far today. Over this Wednesday’s trading session, a whopping 20.99 million Pilbara shares have swapped hands as it currently stands.

In this case, it seems another share price fall is responsible here. Pilbara shares have lost a nasty 4.17% of their value so far today at $2.07 a share. This lithium stock is now down almost 20% over the past month alone. No wonder so many shares are bouncing around on the ASX boards.

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

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More reading

• 3 ASX 200 shares stretching higher on Wednesday
• Investing should be boring: fundie
• Will the share market recover in 2022?
• How long do ASX bear markets last on average?
• This fund manager is optimistic on these 2 leading ASX 200 energy shares

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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The James Hardie Industries Plc (ASX: JHX) share price is down another 6% on Wednesday, sinking the stock to its lowest mark in 52 weeks.

At the time of writing, the company’s shares are $30.63 apiece, 5.67% lower than yesterday’s close. It takes James Hardie’s losses to almost 45% this year to date.

In the broader market, the benchmark S&P/ASX 200 Index (ASX: XJO) has slipped a further 47.5 basis points today, a 0.71% loss.

James Hardie’s share price plunge comes amid reports the company is facing legal proceedings in the Federal Court.

What’s up with the James Hardie share price?

The company has released no market-sensitive news today.

However, The Australian reported James Hardie is facing allegations in the Federal Court after the company was accused of “repeatedly [failing] to investigate unethical or unsafe behaviour”.

A former manager of its Australia Pacific (APAC) division has reportedly started the legal proceedings. It’s reported the case centres around James Hardie’s internal handling of management disputes.

In broader terms, the company’s shares have been trending down since trading resumed in the new year.

Its current price of $30.83 is a long way from its 52-week high of $56 back on 4 January.

It traced lower despite showing some signs of revival, first in February and then again in March. Since then, it’s staggered consistently lower.

In the last 12 months, the James Hardie share price has slipped more than 32% into the red.

The post Why did the James Hardie share price just hit a new 52-week low? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares defying Friday’s falls to leap higher
• ASX shares paid out a record $98b in dividends in the 12 months to March. Which are the star performers?
• Why is the James Hardie share price surging higher today
• Why Brambles, James Hardie, Seek, and Sezzle shares are sinking
• ASX 200 midday update: Brambles takeover talks end, resources shares charge higher

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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Right now is a nerve-racking time to be an investor. Whether new to the game or well-versed, many are pondering: will the share market recover in 2022?

If there was such a thing as a haunted share market house, the current situation is possibly as close as it gets to a ride full of all the hair-raising antics sure to leave even the most seasoned participants a little unsettled.

The S&P500 is officially in a bear market and the S&P/ASX 200 Index (ASX: XJO) swiftly entered correction territory yesterday.

As a result, anyone that has invested in the broader market since February 2021 is wondering when their brave-faced buying might pay off.

What does history tell us?

Those that have walked around the investing block before will have heard the old Mark Twain saying, “History doesn’t repeat itself, but it often rhymes.” It embodies the heavily-used disclaimer by financial professionals: past performance is not indicative of future results. However, it can always serve as an informant for the approximate bounds of what we might expect.

The ASX is not yet in a bear market by definition, as depicted below. It would need to fall a further 9.6% to 6,018.7 points before following in the footsteps of the US market. If it were to reach this milestone, historical data from Bloomberg (between 1969 to 2018) suggests the average time to recover is 13 months.

On the other hand, the Australian share market might be able to avoid the grizzly bear market fate thanks to its overweight exposure to miners. ASX-listed giants such as BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO), and Fortescue Metals Group Limited (ASX: FMG) have all managed to stay in the positive so far this year.

Although, whether these companies continue to hold up in the face of high inflation and increasing interest rates would be mere speculation.

Will the share market recover this year?

You might be saying, “But Mitchell, the history lesson still doesn’t answer the all-important question.” And you would be completely right. We all want certainty, we all want guarantees, and we all want the share market to transform into a bull again.

But I think legendary investor and Bridgewater Associates founder Ray Dalio put it best, “He who lives by the crystal ball will eat shattered glass.” In other words, trying to predict when the share market will recover might be more harmful than helpful.

Our very own Motley Fool Australia chief investment officer, Scott Phillips is also no proponent of fortune-tellers, stating:

So, the honest answer is no-one knows the future. Some pretend they do. Some of those people probably even manage to fool themselves. But no-one knows for sure. Here’s what I do know: The ASX has never yet failed to regain — then surpass — a previous high. What does that mean? Well, if (and, I think when, but no promises) the ASX gets back to its previous highs, there’s decent upside from here just to get back to that point, then more again if (and again, I think when) it goes higher.

However, Phillips highlighted the potential advantages of sticking with your guns in the meantime, saying:

The problem is that our human nature doesn’t predispose us to be good at waiting — or to be calm while we wait. So, it can be tough. And there’s no getting around that. But historically speaking, it’s been very worthwhile. And my money — literally — is on history repeating itself. When? I don’t know. Nor does anyone else. But I think it’ll happen. And when it does, I expect to be glad I just kept my head down, kept investing, and waited patiently for the market to recover.

So, there may not be a concrete answer as to when the Australian share market will recover. But, if the future holds any resemblance to the past, there’s a good chance the tides will turn eventually. Whether next week, next month, or next year. When those tides turn is the quadrillion dollar question that — if everyone is being honest — nobody truly knows.

The post Will the share market recover in 2022? appeared first on The Motley Fool Australia.

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More reading

• How long do ASX bear markets last on average?
• This fund manager is optimistic on these 2 leading ASX 200 energy shares
• ASX 200 midday update: ResMed’s US$1bn acquisition, tech shares continue to sink
• Why I think these 2 ASX 200 dividend shares offer great buying right now
• Warning: 1970s inflation is returning. Expert reveals what to do

Motley Fool contributor Mitchell Lawler 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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