Tag: Motley Fool

Meta Platforms Inc (NASDAQ: META) stock has popped in after-hours trade on Wall Street.

At the time of writing, the Facebook and Instagram owner’s shares are up a massive 15% to US$453.01.

Investors have been scrambling to buy the tech behemoth’s shares following the release of its quarterly update.

Meta stock pops on quarterly update

For the three months ended 31 December, Meta reported a 25% increase in revenue to US$40,111 million. This brought its revenue for 2023 to US$134,902 million, which represents an increase of 16% year on year.

Key drivers of its fourth quarter growth were an 8% increase in Family Daily Active People (DAP) to 3.19 billion, a 21% jump in ad impressions across its Family of Apps, and a 2% lift in the average price per ad.

Another positive was that its total costs and expenses reduced 8% during the fourth quarter to US$23.73 billion. This reduced its full year increase in costs to just 1%.

The sum of the above was earnings per share of US$5.33 for the quarter (up 203%) and US$14.87 for 2023 (up 73%).

Meta founder and CEO, Mark Zuckerberg, commented:

We had a good quarter as our community and business continue to grow. We’ve made a lot of progress on our vision for advancing AI and the metaverse.

First ever dividend

A big surprise from the result was the announcement of the company’s maiden dividend. Meta has declared a cash dividend of US$0.50 per share, which will be payable on 26 March.

This won’t be the last dividend, with management stating that it “intend[s] to pay a cash dividend on a quarterly basis going forward, subject to market conditions and approval by our board of directors.”

How does this compare to expectations?

As you might have guessed from the way that Meta stock has jumped this morning, this result was ahead of expectations.

According to CNBC, the market was expecting revenue of US$39.18 billion and earnings per share of US$4.96.

Whereas Meta delivered revenue of US$40.1 billion and earnings per share of US$5.33. In addition, its daily active users and average revenue per user metrics were also stronger than expected.

Outlook

Meta expects first quarter 2024 total revenue to be in the range of US$34.5 billion to US$37 billion.

This guidance assumes foreign currency is neutral to year-over-year total revenue growth, based on current exchange rates.

The post Meta stock pops 15% after profits triple appeared first on The Motley Fool Australia.

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More reading

• Why Lovisa could become one of the top ASX 200 shares for dividend income
• Why Goldman Sachs thinks QBE shares are a top buy
• 2 top ASX growth shares to buy right now and hold for the long term
• [FRI] Here’s why Premier Investments shares are on my ASX dividend watchlist
• 5 things to watch on the ASX 200 on Friday

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. 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 Meta Platforms. The Motley Fool Australia has recommended Meta Platforms. 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) share Lovisa Holdings Ltd (ASX: LOV) could grow to become a leading ASX dividend share in the coming years.

A low-cost jewellery retailer may not sound like the sort of business that can deliver piles of cash, but I think it’s one that all investors should take note of.

Dividends have soared

The past isn’t necessarily going to be repeated again, but I think Lovisa’s dividend trajectory is compelling and suggests ongoing growth could be useful.

In FY23, Lovisa paid an annual dividend of 69 cents per share, compared to 33 cents per share in FY19, which is an increase of 109%.  

I wouldn’t expect the ASX 200 share’s dividend to double again by FY27, but it could keep rising strongly if the net profit after tax (NPAT) keeps growing and the dividend payout ratio stays quite generous.

Payouts expected to keep growing

On Commsec, Lovisa is estimated to pay an annual dividend per share of 91 cents in FY26, which would be growth of 32% from FY23. Excluding the effect of franking credits, that would translate into a forward dividend yield of 4%, or 5.1% at the same franking rate as the last dividend.

The broker UBS has forecast the Lovisa dividend could rise to $1.32 per share, which would be a rise of 91% over five years between FY23 to FY28. That means in FY28, the dividend yield could be 5.9%, or 7.5% at the same franking rate.

Lovisa ended FY19 with 390 stores and in FY23 it finished with 801 stores, an increase of 105%. Perhaps it’s unsurprising that Lovisa has grown its dividend at almost exactly the same pace as its store growth.

The more stores the ASX 200 share has, the more profit it can make and then the bigger dividends it can pay.

At the company’s AGM, it said in the first 20 weeks of FY24 that total sales had increased 17% year over year and opened another 35 net new stores.

To me, one of the most exciting things about Lovisa is that it has only just entered a number of markets including Vietnam, mainland China, Hong Kong, Taiwan, Mexico, Canada, Spain, Italy and Ecuador.

Australia has a population of around 27 million, while many of the markets I just mentioned have much bigger populations. That doesn’t necessarily mean they’re all going to have the same store-to-population ratio as Australia (which has around 170 stores). I think there’s plenty of scope for Lovisa to double its store count in the next five or six years, which could mean Lovisa is able to double its dividend.

Lovisa share price valuation

In the last five years, Lovisa shares have risen to 210%. At the current share price, Lovisa is valued at just 15x FY28’s estimated earnings, according to UBS.

If the ASX 200 share’s profit can keep growing, I think the Lovisa dividend and (hopefully the Lovisa share price) can keep rising.

The post Why Lovisa could become one of the top ASX 200 shares for dividend income appeared first on The Motley Fool Australia.

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More reading

• The ultimate ASX growth shares I’d buy with $7,000 right now
• Buy and hold these ASX dividend stocks for a decade
• ASX passive income seekers: Invest $10,000 for $520 in monthly income
• Buying ASX retail shares? You’ll want to see these numbers
• Why I think Lovisa stock is an amazing ASX 200 buy for both dividends and growth

Motley Fool contributor Tristan Harrison has positions in Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia has recommended Lovisa. 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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QBE Insurance Group Ltd (ASX: QBE) shares could be a top buy right now.

That’s the view of analysts at Goldman Sachs, which believe the insurance giant’s shares could offer big returns over the next 12 months.

What is Goldman saying about QBE?

Goldman has been looking over the quarterly update of industry peer Chubb Ltd (NYSE: CB) and was pleased with what it saw.

The broker highlights the following from Chubb’s update:

Ex CATs, the current accident year COR was 79% which improved by 1.8% on pcp – driven by a 2.2% improvement in the loss ratio and a 0.4% increase in the expense ratio – positive read for QBE. […] Chubb comments on rate and strength of loss reserves read positively for QBE. […] Chubb’s confidence in book growth (pricing / volume) as well as margin improvement into FY24 – is a positive read for QBE.

Buy rating reaffirmed on QBE shares

According to the note, the broker has reaffirmed its buy rating and $18.52 price target on QBE’s shares.

Based on the current QBE share price of $16.02, this implies potential upside of 15.6% for investors over the next 12 months.

In addition, the broker is forecasting a 59 US cents per share dividend in FY 2024. This equates to a very attractive 5.6% dividend yield.

Goldman commented:

We are Buy rated on QBE because 1) QBE has the strongest exposure to the commercial rate cycle. 2) QBE’s achieved rate increases continue to be very strong. 3) QBE is also growing volumes: QBE is currently getting strong top line growth on a constant currency basis ex rate increases. 4) North America on a pathway to improved profitability. 5) Valuation not demanding.

The post Why Goldman Sachs thinks QBE shares are a top buy appeared first on The Motley Fool Australia.

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More reading

• Why Credit Corp, Playside, QBE, and Skycity shares are pushing higher today
• Why 4DMedical, A2 Milk, QBE, and Zip shares are charging higher today
• Leading brokers name 3 ASX shares to buy today
• 3 ASX dividend stocks to boost your income portfolio in 2024
• Leading brokers name 3 ASX shares to buy today

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 Goldman Sachs Group. 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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Australia is fortunate to host a huge group of excellent dividend stocks, but I still prefer investing in ASX growth shares.

That’s not necessarily because dividend shares don’t perform. It’s just more about the enjoyment of the investment process.

There are two facets to this.

First is that I find growth shares less maintenance. With dividend stocks, you need to worry about reinvesting the income, which adds time and effort for more research and the tax implications.

The second advantage is that I derive pleasure in watching businesses I have invested in growing to the next stage. It’s exciting.

If you agree with my arguments, there are a couple of ASX growth shares that are looking pretty good to pick up right now.

But if you commit, just be prepared to be in it for the long haul:

How about a 1,500% return in 5 years?

Telix Pharmaceuticals Ltd (ASX: TLX) is an Australian company developing diagnostic and therapeutic products for different types of cancer.

I like its long-term prospects because the business is at a sweet spot in its life cycle.

In 2022, Telix released its first product into the commercial market, thereby generating its first flow of real revenue.

Since then, that income has allowed it to progress future products through the arduous testing and approval pipeline and head towards profitability.

The next few years could see the fruits of those activities, which could put a rocket under the share price.

Professional investors are bullish, with all eight analysts surveyed on CMC Invest currently rating Telix as a buy.

Telix shares have returned an incredible 1,494% over the past five years.

These ASX growth shares have tripled in 19 months 

Life360 Inc (ASX: 360) sounds like a creepy mobile app, but it seems to be popular in the US.

It’s a “family locator” app that allows parents to track the whereabouts of their children. Similarly, it can also be used for family members to monitor their elderly relatives.

There are also safety features such as car crash detection, calling for roadside assistance, and SOS alerts.

According to a company presentation made at a conference in November, about 10% of families in the US use the app.

What about the business though?

After tech shares started selling off in 2022 due to inflation fears, the management declared that it would turn from a cash-burning startup to a more mature business focused on profitability.

The market has appreciated the pivot, sending the Life360 share price tripling since June 2022.

Co-founder and chief executive Chris Hulls said in a quarterly update in November that Life360 continues to improve its cash flow.

“We continue to carefully balance expense management with investment in the significant long term growth opportunities available to us.

“Excluding commissions, operating expenses increased by $1.2 million or 2.4% YoY, compared with a $21.5 million or 38% uplift in revenue, demonstrating the operating leverage of Life360’s business model.”

Just like Telix, this one’s popular with those who invest for a living.

According to CMC Invest, seven out of eight analysts rate the tech stock as a buy.

The post 2 top ASX growth shares to buy right now and hold for the long term appeared first on The Motley Fool Australia.

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More reading

• This rapidly growing ASX 200 tech stock’s “valuation is compelling”
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Here’s why these ASX 200 growth shares could be top buys

Motley Fool contributor Tony Yoo has positions in Life360 and Telix Pharmaceuticals. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360 and Telix Pharmaceuticals. The Motley Fool Australia has recommended Telix Pharmaceuticals. 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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I already own many ASX dividend shares in my share portfolio. But one sector that I’ve hit a number of foul balls on has been ASX retail shares. 

I’m hoping that my next retail stock will turn the tide here. That’s why I’m considering an investment in Premier Investments Limited (ASX: PMV) shares in 2024.

Retail stocks seem to be my kryptonite. I’ve invested in quite a few over the years, with names like Adairs Ltd (ASX: ADH) and Dusk Group Ltd (ASX: DSK) joining my portfolio at one point or another. But alas, most of these investments have turned out to be dividend traps to varying degrees.

The dividends from Adairs shares have declined dramatically over the past 18 months – largely thanks to the company’s decision to scrap its final dividend for 2023 entirely.

Similarly, with Dusk stock, the company’s total of 11 cents per share in payouts last year was a shadow of the 20 cents per share investors enjoyed over 2022.

But I have far more confidence in Premier Investments shares.

Why I’m considering Premier Investments shares for my next dividend buy

Why? Well, firstly, this company has a better recent track record with doling out dividends.

Not only did Premier Investments deliver its highest-ever payouts last year (totalling $1.14 in ordinary dividends per share and handily beating its 2022 output of 92 cents per share), but it also lavished 41 cents per share in special dividends on investors.

Today, these dividends give Premier shares a trailing dividend yield of more than 4%. That comes fully franked too.

In other words, Premier is showing strength, while other ASX retail stocks are displaying weakness.

Secondly, this company has shown that it is able to rely on its diverse portfolio of retailers to deliver returns to shareholders. Premier owns the Smiggle, Jay Jays, Just Jeans and Peter Alexander retail chains. These are some of the best-performing brands in the country. I’m sure many readers can personally attest to it, given Christmas is still a fresh memory.

Last September, the company told shareholders that its retail earnings for the 2023 financial year rose by 6.4% to $357.9 million. Sales at Peter Alexander and Smiggle were up 11.8% and 22.4%, respectively.

Keep in mind that this occurred over a year of tough economic conditions. Consider the high inflation and rising interest rates that FY2023 was burdened with.

Thirdly, Premier Investments’ chair Solomon Lew is widely considered to be one of the country’s best business operators. He has been at Premier for decades and has an established track record of delivering outstanding results for investors over long periods of time.

So all in all, I think Premier Investments is one of the best ASX retail shares on the market today and is worthy of a spot in any ASX dividend share portfolio. Hopefully, it will be in my own before too long.

The post [FRI] Here’s why Premier Investments shares are on my ASX dividend watchlist appeared first on The Motley Fool Australia.

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More reading

• Buying ASX retail shares? You’ll want to see these numbers
• Premier Investments stock: 3 reasons it’s on my buy watchlist
• Here are 3 top ASX dividend shares to buy now: analysts
• If you invest $10,000 in Premier Investments shares, how much passive income will you receive in 2024?
• ‘Short-term correction’: 2 ASX stocks I’d load up on if the market turns sour

Motley Fool contributor Sebastian Bowen has positions in Adairs. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adairs. The Motley Fool Australia has positions in and has recommended Adairs. The Motley Fool Australia has recommended Premier Investments. 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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On Thursday, the S&P/ASX 200 Index (ASX: XJO) ran out of steam and dropped deep into the red. The benchmark index fell 1.2% to 7,588.2 points.

Will the market be able to bounce back from this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to rebound

The Australian share market looks set to end the week on a positive note following a good night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 13 points or 0.2% higher this morning. In late trade on Wall Street, the Dow Jones is up 0.6%, the S&P 500 is up 0.85%, and the NASDAQ is up 1%.

Oil prices sink

ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT) and Karoon Energy Ltd (ASX: KAR) could have a tough finish to the week after oil prices slumped overnight. According to Bloomberg, the WTI crude oil price is down 2.34% to US$74.07 a barrel and the Brent crude oil price is down 2.1% to US$78.83 a barrel. Traders were selling oil amid optimism over a cease-fire in the Israel-Hamas war.

Pinnacle results

The Pinnacle Investment Management Group Ltd (ASX: PNI) share price will be on watch today after the company released its half year results. The investment management company posted a net profit after tax of $30.2 million. This was down slightly from $30.5 million during the prior corresponding period.

Gold price rises

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a decent session after the gold price pushed higher overnight. According to CNBC, the spot gold price is up 0.3% to US$2,073 an ounce. Strong US jobs data boosted rate cut hopes.

CBA remains a sell

Commonwealth Bank of Australia (ASX: CBA) shares are still a sell according to analysts at Goldman Sachs. This morning, the broker has reaffirmed its sell rating and lowly $82.37 price target. This implies potential downside of 28% from current levels. Goldman believes that “CBA’s consumer banking skew leaves its earnings more exposed to sector wide headwinds.”

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

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More reading

• History suggests snubbing the ASX 200 at record highs could be a costly mistake — here’s why
• After 8 days of gains and a record high why is the ASX 200 tumbling today?
• Better buy: Westpac or CBA shares?
• 2 ASX 200 dividend shares to buy in 2024 for dependable passive income
• 5 things to watch on the ASX 200 on Thursday

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 Goldman Sachs Group and Pinnacle Investment Management Group. The Motley Fool Australia has positions in and has recommended Pinnacle Investment Management Group. 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.

Electric vehicle, energy, and technology company Tesla Inc (NASDAQ: TSLA) is unique. It made electric cars cool. An eccentric CEO, Elon Musk, leads it. The company has sold clothing apparel with a double meaning, aimed at poking fun at those who doubted it.

But the company’s relationship with shareholders might stand out most of all. It maintains a large shareholder base of individual investors and has already split its stock for them twice.

A new bull market has begun, which could bode well for the share price. Should you be on the lookout for Tesla’s next stock split?

Why do companies split their stock?

Companies split their stock for a couple of reasons. A stock split is when a company divides its stock into a higher number of smaller shares. It’s like cutting a pie into smaller slices so more people can have some.

Suppose you own 10 shares of a stock trading at $100 ($1,000 in total). The company splits its stock 4-to-1, dividing each share into four. Your 10 shares would become 40 shares, trading at $25 each. You still have $1,000 worth of stock but more shares at a lower price per share.

This point is crucial: A stock split impacts the share price because each share represents a smaller portion of the company. Fundamentally, the value of the stock itself doesn’t change. The pie never gets bigger just because you cut it into more pieces.

So, why do companies do it? First, it makes it easier for individual investors to accumulate shares. It also creates some buzz around a company, which may be good for the share price in the short term.

Tesla’s stock-split history

Tesla has split its stock twice. The first time was a 5-to-1 split in 2020, and the second was a 3-to-1 split in 2022:

TSLA data by YCharts

The company has noted two reasons for stock splits. First, it awards stock to employees as compensation, and splitting it into smaller shares helps them manage their stake in the company.

Second, Tesla knows that individual investors heavily support it, and the company wants to ensure the stock remains accessible to them. According to Wall Street Zen, non-insider individuals own roughly 44% of the company’s outstanding shares.

Will Tesla split its stock? Here’s what matters

Today, Tesla stock is trading at just over $180 per share, far from its 52-week high of $299. Tesla didn’t split at roughly $300, so it’s hard to see a split coming without the stock at least hitting a new high.

Investors should focus more on the company’s recent fourth-quarter earnings report, which gave shareholders a glimpse into the short- and medium-term future. Management stated that vehicle deliveries would likely decline in 2024 because Tesla was focusing resources on readying a next-generation vehicle design that it believes could spark its next major growth phase.

The market often doesn’t look very far ahead, so this anticipated production decline could keep shares from new highs despite the broader market recently enjoying its own all-time highs.

What ultimately matters is whether investors believe Tesla will continue to grow and create value for its shareholders over time. Its next-generation platform aside, there’s certainly no shortage of growth opportunities in electric vehicles, energy storage, and artificial intelligence (AI). Tesla’s stock has already returned 11,000% over its lifetime, and the future looks as bright as ever.

If you don’t wish to buy whole shares of the stock today, consider a stock broker that allows fractional shares so that you can invest a fixed dollar amount, regardless of whether the stock splits.

Including Tesla in a long-term-oriented and diversified portfolio could help you enjoy the benefits of investing in several great companies.

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

The post Stock-split watch: Is Tesla next? appeared first on The Motley Fool Australia.

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More reading

• Tesla stock has tanked 27% in 2024: Is it time to buy the dip?
• Tesla share price screeches 6% lower as vehicle growth hits speed bump
• Automation era: Why I’m buying more Tesla shares despite margin decline

Justin Pope 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 Tesla. 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.

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

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Offering an 18%, fully franked trailing yield, it’s somewhat hard for me to believe that this star ASX dividend share is down 13% since last March.

The passive income gem in question is ASX coal stock Yancoal Australia Ltd (ASX: YAL).

Much, if not all, of that share price retrace was driven by a sizeable fall in coal prices.

In April 2023, thermal coal was fetching around US$200 per tonne. That’s fallen to around US$120 per tonne today.

This saw the Yancoal share price drop from $6.86 a share on 13 March to its closing price yesterday of $5.97 a share.

But, judging by the miner’s December quarterly update, the 2024 passive income outlook from this shining ASX dividend share looks very solid to me.

The company reported achieving almost 13 million tonnes of saleable coal production over the three months. That’s its best production level in three years.

Management noted that output from Yancoal’s mines improved for the fourth consecutive quarter amid ongoing recovery initiatives across the miner’s operations.

Yancoal also reported that coal prices remain at levels that allow it to “generate robust cashflow“.

Indeed, you’ll be hard-pressed to find an ASX dividend share of a similar size with such a strong balance sheet.

As at 31 December, Yancoal had a cash balance of $1.4 billion. In the December quarter alone, the coal miner added $477 million to its cash balance. And that’s after incorporating operating costs, capital expenditure and monthly tax payments.

So, while there are no guarantees in life or in the world of investing, I’d say the passive income outlook from this dividend gem remains quite strong.

As for the past year…

How much passive income has this ASX dividend share been paying?

The smashing yield we quoted above is, as noted, a trailing yield. This is based on the dividends the ASX dividend share paid out over the past 12 months.

Yancoal paid a final dividend of 70 cents per share on 28 April. Eligible investors will have seen the interim dividend of 37 cents per share hit their bank account on 20 September.

That equates to $1.07 per share of passive income, with potential tax benefits from those franking credits.

At yesterday’s price of $5.97 a share, that sees this star ASX dividend share trading on a 17.9% yield.

Take note, though. While the Yancoal share price is down 13% since last March, the ASX coal stock has already rebounded 16% over the past month.

The post An 18% yield but down 13% since March! Time to buy more of this star ASX dividend share? appeared first on The Motley Fool Australia.

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More reading

• How I’d aim to build a bullet-proof ASX passive income portfolio with just $7,000 in 2024
• Here’s how the ASX 200 market sectors stacked up this week

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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Like everything in life, there are some myths that people believe about investing that are holding them back from a wealthier life.

Moomoo market strategist Jessica Amir has helpfully picked out the three most common ones and set out why they shouldn’t stop you from buying stocks right now:

1. ‘It’s too hard’

This could be the most heard excuse for inaction, especially from those who have never bought ASX shares.

Amir argues that this might have been true in the old days when everything was done on paper through human brokers, but it’s now 2024.

“Buying a share is as easy as buying groceries, whether it’s a domestic stock or from overseas,” she said.

“Nowadays, trading fees from brokerages like Moomoo can start from as little as $1, so there’s little financial barrier to investing.”

There are also plenty of free educational resources on the internet to get started, including a host of articles from The Motley Fool’s Education Hub, so there’s no excuse to not invest.

“So don’t be afraid to take the first step — these days, it’s usually a free one!”

2. ‘Now isn’t a good time to invest in the stock market’

We’ve all heard this investing myth before.

When stocks are down, the haters say this citing poor investor sentiment. When stocks are bullish, the critics say this because they think it’s all too expensive.

So when is a good time to invest?

Amir reckons people are missing the point when they talk about ‘good’ and ‘bad’ times to buy shares.

“As the saying goes in the investing world, it’s not about timing the market, but your time in the market.

“The best step to investing is a small one, even if it’s just a hundred dollars you put towards investing into a highly diversified ETF.”

Having said that, she added 2024 was looking bullish.

“The Australian and US share market are at an all-time high and there is plenty of exuberance in booming industries across the globe.

“Interest rates are easing up this year so it’s likely we will see more consumer spending and investors trading, which helps support our share market.”

Amir noted earnings generally declined last year.

“So it may be likely that shares will be bouncing back this year.”

3. ‘There’s too much choice’

There is no satisfying some people. 

Would they rather that there are insufficient choices?

Amir suggests that investors don’t have to complicate the situation by researching deep into microcaps.

There is nothing wrong with blue chip stocks to get started.

“The S&P/ASX 200 Index (ASX: XJO) and the S&P 500 Index (SP: .INX) are great places for new investors to start. 

“Not only are you exposed to some of the highest-performing stocks in the share market, but they are regularly managed to stimulate a profit.”

Even amid the volatility last year, you would have done well with well-known large-cap names.

“If you had invested $10,000 into the S&P 500 at the start of January 2023, you would have made over $2,400 by December 2023.”

Amir named iShares S&P/ASX Dividend Opp ESG Screened ETF (ASX: IHD), Russell Inv High Dividend Australian Shares ETF (ASX: RDV) and BHP Group Ltd (ASX: BHP) as some popular names to get started on the ASX.

“BHP continues to make the nation go round, supplying domestic and global products for building iron scaffolds, buildings, cars, and infrastructures.

“With a 5-year growth of 34.7%, it’s no wonder it’s an investment choice often made by superannuation funds, fund managers and sophisticated investors.”

The post 3 popular investing myths BUSTED appeared first on The Motley Fool Australia.

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More reading

• BHP stock and more: 3 ASX commodity titans to watch in 2024
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• Why the dividends from BHP shares could surge in 2024
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Motley Fool contributor Tony Yoo 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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When looking for ASX stocks to buy, investors are understandably doing so in an optimistic mood.

And that’s why often they concentrate on the potential for upside during analysis more than the downside risks.

However, IML portfolio manager Daniel Moore pointed out how sport shows that reducing errors is crucial.

“Novak Djokovic is, probably, the GOAT [greatest of all time] of tennis. Does he hit more winners than other top players? No, not particularly. But he makes fewer mistakes.”

Last January, on his way to winning the Australian Open, Djokovic hit 20% more winners than his opponents. But it was the fact that his opposition hit 40% more unforced errors than The Joker that propelled him to the trophy.

“Novak’s low error count is a key part of his incredible, enduring success. It might not make him popular, but it makes him a winner,” Moore said on the IML blog.

“Don Bradman, the GOAT of cricket, only hit 6 sixes throughout his storied career – if you don’t hit it in the air, you can’t get caught out.”

This is how you evaluate downside of an ASX stock

So how do you check the downside of ASX stocks before you buy them?

Moore laid out six checks that his team performs:

• Cyclicality of earnings
• Balance sheet
• Management track record
• Financial accounts
• Regulatory risk
• Valuation

Cyclicality refers to whether the earnings are currently on the way up or down. 

Balance sheet and financial accounts sound similar, but are distinct items to check.

The former is whether the business can “withstand a downturn in the economy or might it need to raise equity and so dilute the investments of current shareholders”.

The latter is the question of how transparent management is with its reporting.

“Are there any concerning issues buried deep in the accounts?”

Moore added that the best investors are the ones who can control their “emotions and biases” as much as analytical ability.

“A lot of avoiding big losses is ensuring that you are in control of your own emotions, that you don’t get caught up in the hype. That you don’t fall for fads or FOMO.”

The post 6 ways to check if an ASX stock could lose you money appeared first on The Motley Fool Australia.

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More reading

• Morgans says these ASX dividend shares are buys this month
• Have Core Lithium shares finally reached a bottom now?
• 3 high-yield ASX shares for considerable passive income (7%-plus dividends!)
• History suggests snubbing the ASX 200 at record highs could be a costly mistake — here’s why
• How ASX shares vs. property performed in January

Motley Fool contributor Tony Yoo 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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