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The S&P/ASX 200 Index (ASX: XJO) closed slightly in the green after a wobbly old day. But three ASX microcap shares soared higher.

The benchmark index closed Monday up 0.05% to 7,148.9 points. Three ASX shares that bucked this trend were Ragusa Minerals Ltd (ASX: RAS), Discovery Alaska (ASX: DAF) and Creso Pharma Ltd (ASX: CPH).

Let’s take a look at why these three ASX microcap shares stormed higher on the market today.

Creso Pharma

Creso Pharma shares jumped 9.62% today to 5.7 cents However, in morning trade, the company’s share price soared 17% to 6.1 cents. Investors bought the company’s shares on the back of a new agreement. Creso is a cannabis and psychedelics company with operations in Switzerland, Canada, Colombia, Israel and Australia. The company has signed a non-binding, non-exclusive heads of agreement (HoA) with Dr Pickles Pty Ltd. Dr Pickles is a tattoo post-care products company with a database of 20,000 online consumers. The agreement provides Creso with the potential to enter the Australian body care market. Creso will look into commercialising Dr Pickles products in North American markets. Creso has a market capitalisation of $67.4 million.

Ragusa Minerals

The Ragusa Minerals share price soared 25% today to 10 cents. The company’s share price rocketed on news it has secured new tenements prospective for lithium. Ragusa signed a tenement farm-in agreement with May Drilling Pty Ltd, providing the exclusive right to earn a 90% interest in five tenements. The tenements can be found in the “highly prospective” Litchfield Pegmatite Belt in the Northern Territory. Commenting on the news, chairperson Jerko Zuvela said:

Ragusa is in a strong position to rapidly accelerate the development of our project at a time of record lithium prices and within a proven high-quality lithium district.

Ragusa has a market capitalisation of $10.23 million based on today’s closing price.

The ASX microcap share you wish you knew about this morning, Discovery Alaska

Discovery Alaska shares surged 27.69% today to 8.3 cents. However, in earlier trade, this ASX lithium share jumped 62% to 10.5 cents. The company is exploring lithium at the 100% owned Chulitna Project in Alaska, United States. In today’s news, the company confirmed lithium mineralisation at 12 historical drill holes. Using a SciAps Z-901 LIBS handheld analyser, the company showed lithium across broad zones. Laboratory analysis will now follow with the aim of establishing a JORC lithium resource. Discovery Alaska has soared 167% in the year to date. The company has a market capitalisation of $14.5 million.

The post 3 ASX microcap shares going gangbusters on Monday appeared first on The Motley Fool Australia.

More reading

• Guess which ASX mining share leapt 60% this morning on a new lithium discovery?
• Tiny ASX gold share soars 23% on ‘transformational’ lithium prospects
• Remember when ASX cannabis shares were smoking hot? Where are they now?

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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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.

Some investors who missed out on buying Apple (NASDAQ: AAPL) stock in 2010 may be kicking themselves. For the lucky bunch who invested $1,000 in Apple stock twelve years ago, their investment would be worth $18,400 today. That’s an impressive return on investment over any time frame.

But can Apple replicate its past success in the future? Let’s look more closely at the probable causes for Apple’s previous performance and consider if investors who buy Apple stock today can expect similarly impressive returns. 

The iPhone is vital to Apple’s success 

Apple’s dominant performance over the last decade could not have been achieved without the overwhelming success of the iPhone. One estimate from 2019 suggests that Apple sold at least 1.4 billion iPhones over the previous 10 years. In its most recent two quarters, iPhone net sales totaled a staggering $122 billion, up from $114 billion at the same time last year.

The iPhone is the center of Apple’s ecosystem that keeps customers returning for newer versions of similar products. Indeed, in the two quarters mentioned above, iPhone sales totaled 55% of Apple’s $221 billion overall sales.

AAPL Revenue (Quarterly) data by YCharts

The popularity of the Apple Watch, AirPods, Apple Music, and more would not be possible without the massive base of consumers who own an iPhone. Nevertheless, Apple has created several products that have endured numerous iterations. That demonstrated ability to develop innovative products fueled Apple’s stock price performance.

Investors are confident that Apple will sell billions worth of its existing products and that it is likely to create new products that can reach similar if not more tremendous success. Otherwise, Apple’s market capitalization would not be north of $2 trillion. 

Even with its impressive market share, the sale of products tends to be cyclical and riskier than the sale of software services. With services, consumers pay for services through recurring subscription fees, which reduces the company’s risk and provides a steady stream of revenue. Over the years, Apple has built out its services segment to become a meaningful part of its business.

As of its second quarter ending March 26, Apple boasted 825 million subscribers to Apple Music, iCloud, and Apple TV+, up by more than 165 million in the last year. The segment totaled 20% of Apple’s overall sales in the quarter that ended in March.

Another benefit of a booming services segment is that these units often produce higher margins. Apple’s services segment boasts a 72.6% gross margin, which is significantly higher than the product segment’s gross profit margin of 36.4%. As seen in the chart below, the higher gross margin of the services business has lifted Apple’s overall gross margin.

Investors have likened the growth of the services segment because of its lucrative 72.6% gross margin and its recurring nature. That’s significantly higher than its product segment gross profit margin of 36.4%. The higher gross margin of the services business has lifted Apple’s overall gross margin.

AAPL Gross Profit Margin (Quarterly) data by YCharts

Can Apple replicate its success from the previous decade? 

While Apple’s stock price may not replicate the magnitude of success, it is likely to maintain its position as one of the most dominant tech companies worldwide. Folks are spending an increasing amount of time on their electronic devices, and Apple has earned the trust of billions of people already. That could mean that if or when Apple launches a new product, it will garner a more significant part of the population who will at least try it out.

For instance, reports suggest that Apple has secretly worked on a self-driving electric car. If that product gets widespread customer adoption among existing Apple fans, it could deliver massive shareholder gains. Of course, it’s nearly impossible to predict what Apple’s precise returns will be over the next decade, but the company sure looks to be a safe bet for making today’s investors wealthier over time. In recent weeks, Apple’s stock has been caught up in the broader market sell-off, but that allows long-term investors to scoop up shares at a lower price. 

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

The post If you’d invested $1,000 in Apple in 2010, this is how much you would have today appeared first on The Motley Fool Australia.

More reading

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Parkev Tatevosian has positions in Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. 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 Australian Labor Party has claimed victory in the federal election, ousting the incumbent Coalition government. This means there could be some big changes ahead for a range of industries, with ASX energy shares front and centre.

While both parties were broadly aligned on a 2050 net-zero emissions target, Labor’s policies put more of an emphasis on renewables as its method for addressing emissions.

The changing of the guard comes at a time when oil prices are at eight-year highs of US$110 per barrel. Simultaneously, calls for climate action and emission reductions are more topical than ever. In recent months a raft of extreme weather events has impacted Australia.

So, what could the landscape for ASX energy shares look like under Labor?

Pushing more renewables

The energy sector could be in for a shakeup as Labor takes the reins of the Australian economy. As a result, investors are sizing up what it means for the energy industry.

When it comes to politics, usually not all the cards are on the table to see. However, Labor’s Powering Australia policy gives people some insights into what we could expect over the next three years of government.

According to the plan, Labor plans to reduce emissions by 43% by 2030 to remain on track for net zero by 2050. To do this, the government will invest $20 billion in upgrading the electricity grid to make it better equipped for interfacing with an increase in renewable electricity.

Furthermore, the newly sitting government will fund a large deployment of batteries and solar banks across the nation. Labor’s policy outlines $300 million worth of investment for 400 community battery installations and 85 solar banks.

While some have spouted an opinion that Labor could explore other avenues of intervention in the energy market — including taxes — these claims are unsubstantiated.

On another note, Mike Cannon-Brookes was quick to quip that the Labor win could weaken any prospects of the demerger planned by AGL Energy Limited (ASX: AGL).

Where ASX energy shares could get caught out

At face value, it appears that fossil fuel extractors on the ASX may not receive much of a lashing after all. But, a high number of elected Greens and Teal independents in this election could pose more of a risk to ASX energy shares.

Unlike the Coalition and Labor, the crossbench have greater expectations of what is needed to reduce emissions. Data collated by Climate Analytics shows that it is the two more climate progressive parties holding policies that are consistent with 1.5 degrees celsius warming by 2030.

ANALYSIS: If the rest of the world took the same level of #climate action as Australia's political parties, the LNP would bring us 3-4˚C of warming, Labor 2˚C, Teal Independents 1.5˚C (upper band) & the Greens comfortably within 1.5˚C. https://t.co/PxySTyBd4x #AusVotes #Auspol pic.twitter.com/5qvNT0O7dC

— Climate Analytics (@CA_Latest) May 5, 2022

https://platform.twitter.com/widgets.js

If Labor fails to form a majority, the crossbenchers will have the leverage to drive more dramatic climate policy. Even if Labor forms a majority, a greater presence of independents and Greens this time around increases the chances of stiffer crackdowns on polluters.

Ultimately, it is the oil and gas giants that could lose out from such a situation. ASX energy shares such as Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (ASX: STO) would be at risk.

The post What might a Labor government mean for ASX energy shares? appeared first on The Motley Fool Australia.

More reading

• Why did the Wesfarmers share price trail the ASX 200 on Monday?
• Can Bitcoin play a role in a diversified ASX share portfolio?
• Why have ASX 200 shares popped then dropped on Monday?
• AGL share price struggles as WAM boss slams demerger plan
• Here are the 3 most traded ASX 200 shares on Monday

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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The Wesfarmers Ltd (ASX: WES) share price struggled to keep up with the broader market on Monday despite no word having been released by the company.

At market close, the Wesfarmers share price finished at $46.18, 1.22% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) gained 0.05% on Monday.

Let’s take a closer look at what might have been weighing on the conglomerate’s shares today.

What went wrong for the Wesfarmers share price today?

Wesfarmers shares underperformed this afternoon despite getting off to a strong start this morning.

After reaching a high of $47.25 in mid-morning trade – a 1% gain – the Wesfarmers share price tumbled into the red around midday.

That was a similar performance to the broader market. It also dropped this afternoon amid concerns rising COVID-19 cases in China could extend lockdowns, as reported by the Australian Financial Review.

Wesfarmers’ home sector – the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) – also slid lower for most of today. It closed 0.11% lower.

The Wesfarmers share price was the index’s second-worst performer. The InvoCare Limited (ASX: IVC) share price was its biggest weight, falling 2.4% today.

Wefarmers shares have had a rough start to 2022. They’ve tumbled around 22% year to date. For comparison, the ASX 200 has fallen around 4% in that time.

The company’s stock is also 15% lower than it was this time last year while the index has gained 1.7%.

The post Why did the Wesfarmers share price trail the ASX 200 on Monday? appeared first on The Motley Fool Australia.

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• Why Nufarm, Pendal, Wesfarmers, and Westpac shares are sinking
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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 positions in and has recommended Wesfarmers 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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Bitcoin (CRYPTO: BTC) is many things to many people.

Some folks make use of the world’s number one crypto by market cap for everyday transactions, with more merchants in Australia beginning to accept digital assets as payment.

Other crypto investors buy Bitcoin planning to hold (or HODL) onto it for the long-term potential value gains.

And still other speculators engage in trading the token. Of course, they hope to buy near the low points of its big price swings and sell near the high.

But can Bitcoin play a role in a diversified ASX share portfolio?

The answer to that question will vary depending on who you ask.

Bitcoin gets the institutional investing thumbs down from PGIM

In its latest Megatrends Report, PGIM – the global investment management business of Prudential Financial Inc (NYSE: PRU) – pulled few punches when it comes to cryptos like Bitcoin.

According to the PGIM report, cryptos are not reliable assets to diversify investment portfolios. Nor do they offer an adequate safe haven in troubled times or act as an inflation hedge.

With the focus specifically on institutional investors, PGIM sees little benefit in directly investing in cryptos. It says that doing so adds plenty of risk and volatility.

According to PGIM CEO David Hunt, investing in an asset like Bitcoin is speculation, not investing:

As long-term investors and fiduciaries on behalf of our clients, three things need to be true for us to add an asset class into a portfolio: the asset needs a clear regulatory framework, it needs to be an effective store of value, and it needs to have a predictable correlation with other asset classes.

Cryptocurrency currently meets none of these three criteria. It’s much more of a speculation than an investment.

PGIM head of thematic research Shehriyar Antia said that atop the speculative nature, cryptos have as yet failed to live up to their safe haven billing:

Cryptocurrency may be a heroic quest to build a viable, decentralised peer-to-peer payment system, but its pricing is based on speculative behaviour, rather than a fundamental thesis around its value or utility.

Furthermore, with little evidence to support it as an effective inflation hedge or safe-haven asset, we see no reason for cryptocurrencies to be a part of institutional portfolios.

Don’t overlook the massive energy use

Then there are the environmental, social and governance issues (ESG) surrounding Bitcoin.

As we’ve previously reported, globally some cryptos use as much energy as the entire population of the Netherlands.

PGIM agrees that cryptos clash with ESG objectives. Its report narrows that down, saying that a single transaction on the Bitcoin blockchain uses as much energy as two million Visa transactions. That’s about equivalent to the power used by the average United States household in two months.

Look to the underlying technology

All this isn’t to turn retail investors away from possibly investing in Bitcoin or other cryptos.

According to PGIM chief operating officer Taimur Hyat, crypto investors need to look into tokens with real-world utility:

Cryptocurrency gets all the breathless hype, but it’s the underlying technology where we find the most interesting investment opportunities. Firms that enable real-world blockchain applications like clearing and settling transactions, preventing fraud, and tokenizing real assets offer significantly greater creation of value over the next decade. The old axiom applies — when there’s a gold rush, invest in shovels and pickaxes.

The threshold for Bitcoin to diversify investment portfolios

Contrary to PGIM’s take for institutional investors, Lisa Shalet, Morgan Stanley Wealth Management’s chief investment officer, gave her input. Last year, Shalet said that even with their notorious volatility, cryptos like Bitcoin could help diversify investment portfolios.

According to Shalet (courtesy of the Australian Financial Review):

For speculative investment opportunities to rise to the level of an investible asset class that can play a role in diversified investment portfolios requires transformational progress on both the supply and demand sides. With cryptocurrency, we think that threshold is being reached.

The Bitcoin price is up 3% over the past 24 hours, to US$30,145.

The post Can Bitcoin play a role in a diversified ASX share portfolio? appeared first on The Motley Fool Australia.

More reading

• Crypto venture firm’s lessons after $10 million haircut on LUNA losses
• Own crypto or NFTs? Here’s why the ATO could have you in their sights come tax time
• Why Bitcoin, Ethereum, and Dogecoin are falling today
• Why Bitcoin and Ethereum popped on Tuesday
• Using Bitcoin to diversify your portfolio? Read this

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. 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 currently in the red despite a positive start in the first hour or so.

While the ASX share market is made up of individual businesses, collectively it can have positive or negative movements as it’s influenced by the different news of the day, week or even month.

No one can know what the ASX share market is going to do next. Sometimes there may be a positive news story internationally (or locally). Sometimes ASX shares can be influenced by what the next day of trading looks like in the US, or by the performance of international markets overnight.

US futures positive

The ASX share market may have been green earlier in the day as US futures pointed to a positive start to the week.

US shares have certainly suffered heavily in recent weeks. A gain on the first day of trading on Monday would be a bit of lost ground regained.

Currently, the pre-market for the US is showing a possible rise of at least 0.6% when the markets reopen. But that could change. It has already changed for the ASX 200, possible due to news that came out of Beijing.

Chinese COVID-19 setback

As reported by various media, including Bloomberg, the Asian superpower has just reported a record number of new COVID-19 cases in its current outbreak in Beijing. This, according to the news outlet, has increased concerns that the capital of China may see a broad lockdown as authorities try to stop COVID-19 spreading.

Shanghai, another huge Chinese city, has gone through a long lockdown to try to get on top of the spread there. China has been aiming for zero cases, which has become more difficult with how infectious the Omicron variant is. The lockdowns are also impacting the Chinese economy.

With how much Australia is connected to China economically, it may not be a surprise that a knock to China could hurt sentiment about the ASX share market, in the short-term at least.

What next for the ASX share market?

The Australian federal election is finally out of the way after a long build up.

Unexpected news can happen any time of course, but investors may be looking to the size of the next interest rate increases from the Reserve Bank of Australia (RBA) and US Federal Reserve as the next major influence on the share market.

Time will tell what happens next.

The post Why have ASX 200 shares popped then dropped on Monday? appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Elders and Codan rocket, Incitec Pivot disappoints
• Why the IGO share price is rallying on Monday
• 5 things to watch on the ASX 200 on Monday
• Is the CBA share price a buy following the bank’s digital mortgage launch?
• Is QBE considered an ASX dividend share?

Motley Fool contributor Tristan Harrison 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 AGL Energy Limited (ASX: AGL) share price is suffering amid reports Wilson Asset Management (WAM)’s boss is dubious of the company’s demerger.

WAM founder, chair, and chief investment officer Geoff Wilson reportedly flagged the split could diminish funding for future decarbonisation.

At the time of writing, the AGL share price is $8.60, 0.35% lower than its previous close.

The stock has been in the red most of Monday. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has tipped lower in recent hours. Right now, the index is recording a 0.1% dip.

Let’s take a closer look at why the leader of the $5.4 billion investment house is against AGL’s planned split.

AGL share price falls on Monday

The AGL share price has struggled through Monday. Its suffering comes amid news Geoff Wilson is against the company’s demerger plan.

The split will see AGL’s energy retail business in the hands of AGL Australia. Meanwhile, Accel Energy will run its energy generation business.

According to The Australian, the WAM boss expects that, by splitting in half, AGL would create “two smaller weaker entities [with] little financial capacity to drive decarbonisation”.

My thoughts are that an un-merged AGL would have the financial ability of leveraging its 4.5 million customers to give offtake certainty while using its balance sheet and the green bond markets to lead investment, with a partial recycling of capital into infrastructure funds once project are approval [sic] and construction risks are resolved.

Geoff Wilson as quoted by The Australian

Wilson also told the publication that, aside from Powering Australian Renewables’ (PowAR) acquisition of formerly ASX-listed Tilt Renewables, AGL has forked out “virtually nothing” to develop renewable energy since financial year 2018. AGL has a 20% stake in PowAR.

It’s a similar story to that preached by Atlassian Corporation (NASDAQ: TEAM) boss Mike Cannon-Brookes. He’s leading the push against the demerger.

As The Motley Fool reported earlier, Cannon-Brookes believes Labor’s federal election win could pressure the company to ditch the demerger in favour of lowering emissions.

However, Macquarie Group Ltd (ASX: MQG) research reportedly tips AGL could benefit from the change in government.

It found Labor’s $20 billion Rewiring the Nation plan could benefit the energy company, reports the Australian Financial Review. Reportedly, Macquarie is flagging policies to help develop renewable energy like solar and hydrogen as potential wins for AGL.

The post AGL share price struggles as WAM boss slams demerger plan appeared first on The Motley Fool Australia.

More reading

• What might an ‘election won and lost on climate’ mean for AGL shares?
• Here’s why AGL shares hit the headlines again on Friday
• Why have AGL shares been getting so much love on Tuesday?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• AGL share price bounces back amid latest demerger opposition

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 positions in and has recommended Atlassian. The Motley Fool Australia has recommended Macquarie 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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Well, the S&P/ASX 200 Index (ASX: XJO) seems to be having a rather shaky start to the trading week so far this Monday. The ASX 200 is, at the time of writing, down by an anaemic 0.045% at around 7,140 points after initially opening in the green this morning.

But rather than crying over spilled milk, let’s instead check out the shares that are currently sitting at the top end of the ASX 200’s share trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Monday

Pilbara Minerals Ltd (ASX: PLS)

ASX 200 lithium stock Pilbara Minerals is first up today. This Monday has seen a hefty 13.3 million Pilbara shares change hands as it currently stands. This doesn’t appear to be a consequence of anything out of Pilbara itself today. So we can probably put this volume down to the moves the Pilbara share price itself has undergone today.

As it currently stands, Pilbara has lost a meaningful 1.05% of its value thus far today and is down to $2.82 a share at the time of writing. Pilbara has followed the trajectory of the ASX 200 today and spent most of the morning in positive territory before seeing a dip into the red. This is probably why we’ve seen so many Pilbara shares trading on the markets today.

Incitec Pivot Ltd (ASX: IPL) 

Fertiliser and explosives manufacturer Incitec Pivot is our next ASX 200 share up this Monday. So far today, a sizeable 17.65 million Incitec shares have found a new home. This is almost certainly a result of the company releasing its half-year results before market open this morning.

As we covered at the time, Incitec reported some pleasing metrics, including a 955% surge in profits. However, an initially strong reaction from investors has now turned sour, and Incitec shares are now down more than 4%. No wonder so many shares have been changing hands today.

Tabcorp Holdings Limited (ASX: TAH)

Our third, final and most traded ASX 200 share of the day today goes to gaming company Tabcorp, with a notable 17.9 million Tabcorp shares bought and sold thus far. We did get a notice this morning that Tabcorp’s Lottery Corporation demerger is now effective following the company receiving final approval from the courts last week. 

Tabcorp shares have also had an interesting day. They initially fell on market open this morning, before spiking up to $5.46 a share just after lunch. The company has cooled off since and is now going for $5.40 a share, up 0.28% for the day. It’s this volatility that has probably sparked such elevated trading volumes today. 

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

More reading

• Why Incitec Pivot, Openpay, PolyNovo, and Sayona Mining shares are sinking
• ASX 200 midday update: Elders and Codan rocket, Incitec Pivot disappoints
• Incitec Pivot share price fizzles despite half-year earnings increasing tenfold
• These were the best performing ASX 200 shares last week
• Here are the 3 most traded ASX 200 shares on Friday

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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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.

Everything isn’t always peachy keen in the stock market. History has shown us that volatility and market downturns are inevitable. However, as an investor, this doesn’t mean panicking and losing track of your long-term goals. If anything, it can be a chance to get closer to your financial goals — especially if time is on your side.

History tends to repeat itself

From 2000 to 2020, the stock market saw three major crashes that sent investors into a panic. In March of 2000, the tech (dot-com) bubble burst. On March 10, the Nasdaq Composite index peaked, breaking 5,000 for the first time ever at that time — up from around 1,000 in 1995 and more than double from 1999. From there, it went all downhill, with the NASDAQ losing close to $1 trillion in value in less than a month. As of May 20, 2022, it’s above 11,000, even after dropping from 16,000 in November 2021.

From 2007 to 2009, we witnessed the global financial crisis unfold and spark the Great Recession. It was triggered by a collapse in the housing bubble and ended up being the worst financial collapse since the Great Depression. On September 29, 2008, the Dow Jones Industrial Average (DJIA) fell by more than 777 points, the largest point drop ever at the time. The DJIA now sits above four times its 2009 lows.

The COVID-19 pandemic happened in 2020, causing a crash we hadn’t witnessed since the global financial crisis. On February 14, 2020, the S&P 500 was over 3,380, and by March 20, 2020, it had dropped to just over 2,300 points. As of May 20, 2022, it’s now over 3,830, even after being down briefly by 20% year to date.

Although past events don’t guarantee anything about future events, history tends to repeat itself, and the stock market has shown us time after time that it has the ability to rebound and bounce back from crashes and huge downturns. The current happenings of the stock market may make people anxious because they’re seeing their portfolio drop, but it’s nowhere near time to panic.

Use market downturns to your advantage

One of the best things to come from market downturns is the ability to buy fundamentally great stocks at much cheaper prices. If you’re investing for the long term and buying great companies and funds, sell-offs shouldn’t bother you — they should make you opportunistic. If you’re a believer in a company at $200 a share, seeing it at $100 can be lucrative. It’s a chance to lower your cost basis and increase potential profits when you sell it in the future.

Of course, it’s not always the case that particular stocks rebound, but blue-chip stocks have shown that they’re great businesses and have stood the test of time by making it through some of the worst economic conditions the US has experienced. Long-term investors should be focused on one thing: the long term. Short-term price movements shouldn’t make you anxious if you’re decades away from retirement.

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

The post What history shows us about market downturns appeared first on The Motley Fool Australia.

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The Bubs Australia Ltd (ASX: BUB) share price has been a positive performer on Monday.

In afternoon trade, the infant formula company’s shares are up over 2% to 44.5 cents.

Why is the Bubs share price rising today?

The catalyst for the rise by the Bubs share price on Monday has once again been optimism relating to the company’s prospects in the US market.

As I mentioned here last week, there are shortages of infant formula in the massive US market, which has led to the US Food and Drug Administration (FDA) taking steps to boost supplies.

US FDA Commissioner, Robert M. Califf M.D., commented:

We are also taking a look at the supply of infant formulas developed by manufacturers across the country and around the world to determine if a reallocation of their distribution can be made to help get the right product to the right place, at the right time.

What’s the latest?

This morning, analysts at Citi suggested that Bubs could be a bigger winner from these shortages than larger rival A2 Milk Company Ltd (ASX: A2M).

This is because Bubs launched its Aussie Bubs brand formula range on a number of ecommerce platforms in the country late last year and has since followed this up with listings in a number of supermarkets.

Citi estimates that if Bubs could secure a 1% share of the market, it could result in three to four times upside to the company’s forecast FY 2023 EBITDA.

The broker currently has a buy rating and 59 cents price target on the company’s shares. Based on the current Bubs share price, this implies potential upside of 32% for investors over the next 12 months.

The post Why is the Bubs share pice toddling higher on Monday? appeared first on The Motley Fool Australia.

More reading

• Why did the Bubs share price jump 16% today?
• Which is the better beaten-up buy, Bubs or A2 Milk shares?
• Bubs share price sinks 29% in a month. Top broker tips 60% upside
• 2 great ASX growth shares to buy in May 2022: experts
• Bubs share price sinks 7% despite quarter of ‘exceptional growth’

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk and BUBS AUST FPO. 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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