Tag: Motley Fool

With yesterday’s strong start to the short trading week, it’s clear that the S&P/ASX 200 Index (ASX: XJO) is on something of a recovery streak. Last month was a shocker for the ASX 200 and ASX shares, with the index losing more than 6% of its value between 7 and 20 March, hitting a two-month low on the latter date.

But more recently, it has been a far more pleasant tale. The ASX 200 has climbed by around 6% since 20 March and has added 1.8% so far during April.

When the markets are in recovery mode after a rough period, it is usually a tie of heightened buying activity. Investors tend to gain confidence when they see others buying shares. This creates a feedback loop of sorts and can help keep markets on a positive trajectory.

But saying that, the ASX 200 still has a long way to go. The index hit its most recent all-time high way back in August 2021. Back then, the ASX 200 climbed above 7,600 points. But it wasn’t to last, and before long, the markets were back under 7,500 points.

As it stands today, the ASX 200 index still remains around 4% below its all-time high watermark.

I’m looking for once-in-a-decade buys right now

So right now, I’m scouring the ASX 200 for once-in-a-decade ASX share opportunities. History tells us that markets tend to go up more than they go down over time. That’s why the ASX 200 has never failed to exceed a previous all-time high. And the best companies don’t tend to stay at bargain-basement prices for long in a stock market recovery.

Case in point, yesterday saw Telstra Group Ltd (ASX: TLS), Washington H. Soul Pattinson and Co Ltd (ASX: SOL) and Wesfarmers Ltd (ASX: WES) all hit new 52-week highs.

In fact, some companies never get back to the levels they were at previously.

Take Woolworths Group Ltd (ASX: WOW). Woolworths is unquestionably one of the strongest businesses on the ASX. It has entrenched market domination, wide brand recognition and decades of success under its belt. Back in late 2018, the ASX 200 went through a bit of a slump. This saw the Woolworths share price dragged below $24 a share. Yesterday, it was closing in on $40.

I would be surprised if Woolies ever gets back to below $25 a share – it didn’t even get near $25 in the COVID crash of 2020.

Thus, that was clearly a once-in-a-decade buying opportunity.

Where are the next ASX 200 winners?

So I’m looking for another opportunity right now, with the markets still away from their all-time high.

It’s ASX 200 retail shares that I think present some of the most compelling candidates at present. Harvey Norman Holdings Limited (ASX: HVN) is a great example. Right now, Harvey Norman shares are close to 40% off their 2021 high of over $6 a share. Yet this is still a popular ASX name in Australia and one with a massive dividend yield today.

Adairs Ltd (ASX: ADH), Dusk Group Ltd (ASX: DSK) and JB Hi-Fi Ltd (ASX: JBH) are in a similar boat. I would say the same for Super Retail Group Ltd (ASX: SUL). But investors seemed to have cottoned on that the $8-9 a share levels that this company was trading at last year were a steal. Yesterday, Super Retail closed at $13.20 a share.

I think many of the companies listed above could have similar trajectories going forward. So when you see a once-in-a-decade opportunity on the markets, don’t let it slip through your fingers.

The post I’m looking for once-in-a-decade opportunities in the stock market recovery appeared first on The Motley Fool Australia.

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More reading

• ‘Attractive valuations’: 2 ASX shares to buy now before they explode
• 5 things to watch on the ASX 200 on Wednesday
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• 3 things I wish I knew before I started investing in ASX 200 shares
• 2 ASX 200 shares that could be top buys for growth

Motley Fool contributor Sebastian Bowen has positions in Adairs, Dusk Group, Telstra Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adairs, Harvey Norman, Super Retail Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Adairs, Harvey Norman, Super Retail Group, Telstra Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has recommended Dusk Group and Jb Hi-Fi. 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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ANZ Group Holdings Ltd (ASX: ANZ) shares are not on my watchlist because of a few key factors.

ASX bank shares are going through a very interesting period of time.

I’ll acknowledge that a couple of the metrics of ANZ do look compelling. Commsec numbers suggest that ANZ shares are valued at just 10 times FY23’s estimated earnings with a potential grossed-up dividend yield of 9.6%.

Those numbers do seem attractive, but a cheap, high-yielding ASX share isn’t necessarily going to perform strongly.

ANZ may well produce good returns from here, but there are a few reasons why I’m not looking to buy shares.

Acquisition distraction

ANZ is currently on a distracting mission to try to buy the banking division of Suncorp Group Ltd (ASX: SUN).

It’s not a done deal yet. Not in the slightest. Even if the deal were to go ahead, I think the integration process would be very distracting for management. I think the next year or two is when management needs to be laser-focused on the banking settings after all of the interest rate rises.

In the ACCC’s statement of preliminary views, it noted that despite the various developments and trends in Australian banking in recent years, there remain “significant regulatory and structural barriers for new entrants and smaller providers.”

Despite all the effort and attention that has been put into this potential deal, there’s no guarantee it’s even going to go ahead.

Weakening economic picture

The last 12 months have really shaken things up.

Initially, the higher interest rates were seen to be a really good boost for the ANZ lending margins. But, there’s now so much competition that this may now be harming all of the banks’ profit margins.

The situation now seems to be that the lending profitability is falling and there’s the prospect of higher bad debts as the effects of higher interest rates start to kick in.

If ANZ can’t grow its profit any time soon, then I’m not sure what’s going to drive the ANZ share price much higher from where it is today.

Let’s also keep in mind that the economic picture for credit growth is fairly weak at the moment.

Low growth likely

Not only is the wider picture difficult for ANZ, but the business itself may not be able to deliver a lot of growth. Yes, there may not be much system growth.

But, for some time ANZ has been trying to catch up with its technology and systems so that it is able to offer the same approval times for loans as other lenders. If ANZ can’t compete properly then it’s going to miss out on the best borrowers.

ANZ has been doing a lot of work on improving its digital capabilities, but I fear that its focus on trying to buy growth with the Suncorp deal means that ANZ isn’t keeping its eye on the prize.

I’m looking for businesses that can deliver more growth over the longer term, which I don’t think describes ANZ.

The post 3 good reasons I’m avoiding ANZ shares at all costs! appeared first on The Motley Fool Australia.

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More reading

• It’s official, the ASX 200 big four banks are the world’s most capitalised. Should you buy?
• Could right now be a great time to buy ASX 200 bank stocks for passive income?
• How I would build a Warren Buffett-style portfolio with ASX 200 shares
• Could ANZ shares cash in on the recent international bank collapses?
• ANZ share price higher amid Suncorp Bank takeover news

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 Zip Co Ltd (ASX: ZIP) share price has seen enormous falls over the past few years. It could be a mistake for beginners to invest in the buy now, pay later business.

Looking at the chart, Zip has dropped by around 95% since February 2021.

Beginners may be looking at that as a big opportunity. But, there are a number of reasons why I’d suggest caution when looking at this former market darling.

It’s true that Zip is a very different business from where it was five years ago. It has expanded significantly in both the US and Australia.

But, here are some reasons why Zip shares may not rapidly rebound from here.

Forget the past Zip share price

Plenty of people have the habit of anchoring to past prices.

Just because the Zip share price was above $10 in the past doesn’t mean it’s going to go back to that price. The market doesn’t care what price we paid for our shares, or where it was trading two years ago.

The BNPL business has seen its growth rate slow considerably. Indeed, in the first six months of FY23, the total transaction volume (TTV) only increased by 10% to $4.9 billion.

When we’re thinking about what ASX shares to invest in, I think we need to think about the future, not the past.

It’s a good idea for investors to stick to their ‘circle of competence’. That means only investing in what we know so that the investment is easy to understand and we can understand the progress that business is making (or isn’t making).

Higher interest rates

One of the key expense categories for Zip is the interest expense.

Interest rates have shot higher in Australia and the US, so it seems like the BNPL business is going to be paying quite a bit more for its borrowing going forwards.

I think this really changes the economic picture for Zip because it’s borrowing money to then fund customers’ spending until they repay it.

Higher interest rates could also mean that customers may be more likely to get into arrears.

I think Zip shares could get a one-off boost if interest rates were to drop, but I don’t think the RBA interest rate will go back to below 2% once inflation has normalised.

Retreating from global markets

One of the things that can justify a higher share price is the potential growth that the business can achieve.

Zip was targeting many regions for growth, but it has stepped back from a number of those markets. While this move is accelerating its journey towards breakeven, it has reduced the growth runway of the business.

Last month, the business announced its plans to divest its Central and Eastern European business called Twisto and the South African business Payflex. It’s also in the process of winding down its business in the Middle East.

However, thanks to this, it’s expecting to deliver positive group cash earnings before tax, depreciation and amortisation (EBTDA) during the first half of FY24.

Foolish takeaway

Zip may still be able to produce profit from here, but I think it would be a mistake for beginner investors to think that it’s going to recover back to $10, or even $5, any time soon. Regulation is also a potential worry, but that’s still a developing situation.

The post Could buying Zip shares be a classic ASX beginner’s error? appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares this week
• Why did the Zip share price zoom higher in March?
• These are the 10 most shorted ASX shares this week
• Why Appen, Regis Resources, Syrah, and Zip shares are charging higher today
• Zip share price leaps 14% on $20 million windfall

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 positions in and has recommended Zip Co. 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 exchange-traded fund (ETF) Vanguard US Total Market Shares Index ETF (ASX: VTS) is one of the most popular ETFs around – the ETF size was $3 billion at the end of February 2023.

It provides exposure to some of the world’s largest companies, listed in the US. Vanguard US Total Market Shares Index ETF aims to offer “low-cost access to a broadly diversified range of securities that allows investors to participate in their long-term growth potential”.

There are a few good reasons to consider the ETF, which is why I think it’s a good buy for the long term.

Diversification

I think this is one of the most diversified ETFs around. It has around 4,000 holdings in the portfolio. Just having 100 holdings is ample diversification as long as the businesses are spread across different sectors. To have 4,000 positions is significant.

While all of the businesses are listed in the US, the companies’ underlying earnings come from across the world. Just picture a business like McDonald’s – it generates earnings from more than 100 countries.

I like the diversification of the sector allocation too. Technology is a growth area, so it’s good that the Vanguard US Total Market Shares Index ETF has a tech share weighting of 23.4%. Other sectors that have sizeable allocations include healthcare (15%), industrials (13.7%), consumer discretionary (13.2%), financials (11.9%), consumer staples (6%), and energy (5.3%).

Growth

I think the ETF has good growth potential, as it has already demonstrated. Over the past five years, it has returned an average of 12.6% per annum.

In my opinion, names like Apple, Microsoft, Alphabet, Amazon.com, and Berkshire Hathaway can continue to deliver above-average growth over the long term.

Many of the ETF’s larger holdings are targeting a global market, giving them huge target markets. The longer the runway, the more the businesses can potentially rise.

By holding around 4,000 businesses, the fund is also potentially invested in the next business that’s going to storm higher.

Low fees

The Vanguard US Total Market Shares Index ETF has an extremely low management fee of just 0.03%. That’s essentially nothing. Almost all of the gross returns turn into net returns thanks to the very reasonable fee.

There are very few ETFs on the ASX that can compete with that cheap price. The iShares S&P 500 ETF (ASX: IVV) has an annual management fee of just 0.04%. The BetaShares Australia 200 ETF (ASX: A200) also has an annual management fee of 0.04%.

Foolish takeaway

I think that Vanguard US Total Market Shares Index ETF is one of the most effective ways to invest in international shares. The fact that the portfolio is regularly changing means investors don’t need to worry about what to buy or sell with this investment.

The post 3 reasons why I rate the Vanguard US Total Market Shares Index ETF (VTS) as a buy today appeared first on The Motley Fool Australia.

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More reading

• 2 fantastic ETFs for ASX investors to buy this month

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 positions in and has recommended Alphabet, Amazon.com, Apple, Berkshire Hathaway, and Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon.com, Apple, Berkshire Hathaway, and iShares S&p 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s easy enough to spot ASX shares that are already rocketing up, but most of the money is made by savvy investors who got in before everyone else realises.

So it pays to listen to experts when they discuss stocks that are still cheap, which they believe to have a tremendous gap between business performance and market capitalisation.

Here are two such examples:

Private equity shows confidence in this business

Wilson Asset Management senior equity analyst Sam Koch claims the market is currently full of tempting bargains to snap up.

“We continue to see numerous opportunities that fit our investment process as companies continue to trade at attractive valuations,” he said.

“The fact that there has been an increasing number of takeover proposals in the small-cap-industrial market this financial year highlights how some strategic assets are continuing to trade at depressed valuations.”

One such small-cap star is aged care residence operator Estia Health Ltd (ASX: EHE).

According to Koch, Wilson has already invested as a “core holding” in two of its portfolios.

“Despite the challenges presented by the pandemic, Estia Health has managed to maintain its strong position in the market, which has not gone unnoticed by investors.”

Indeed, the Estia share price has rocketed 3.9% over the past month, which would have been influenced by a March takeover bid from private equity. 

“Interestingly, the proposal came before the industry received crucial regulatory clarity that is expected later this year,” said Koch.

“This indicates the confidence that Bain Capital has in Estia Health’s long-term growth prospects and its ability to navigate regulatory changes in the industry.”

This stock’s still going for cheap

Shaw and Partners portfolio manager James Gerrish, meanwhile, revealed in his Market Matters Q&A that he loves the outlook for Super Retail Group Ltd (ASX: SUL).

“Super Retail Group is a company Market Matters has liked for a while. It owns Supercheap Auto, Rebel Sport, BCF and others.”

Gerrish noted the recent results season showed the business was performing well.

“It beat market expectations with its 1H earnings with sales up 11% and a significant drawdown in inventory which helped margins.”

And the best thing is that, despite a 27% rise in the stock price over the past year, the buying window is still open.

“In our opinion, the stock is not too expensive trading on an 11.4x valuation,” said Gerrish.

“Plus we like its forecast to yield 6.4% over the next 12 months.”

Currently, the dividend yield stands at a not-too-shabby 5.9%.

The post ‘Attractive valuations’: 2 ASX shares to buy now before they explode appeared first on The Motley Fool Australia.

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More reading

• Want wealth compounding? Here are my 3 favourite dividend shares inside the ASX 300
• Why Core Lithium, Estia Health, Kingsgate, and St Barbara shares are charging higher
• Estia Health share price jumps 21% on takeover approach

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 positions in and has recommended Super Retail Group. The Motley Fool Australia has positions in and has recommended Super Retail 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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Although mining shares do fluctuate wildly according to the state of the global economy, energy transition is a stickier theme that could be a longer-term tailwind.

Baker Young managed portfolio analyst Toby Grimm this week revealed two S&P/ASX 200 Index (ASX: XJO) stocks that he would buy right now that will be major beneficiaries of a zero carbon future:

‘Increasing exposure to energy transition metals and commodities’

Grimm noted that the South32 Ltd (ASX: S32) share price has dipped more than 9% since 3 March.

“We believe this represents a buying opportunity, as we see attractive value in Australia’s biggest mid-tier diversified miner with increasing exposure to energy transition metals and commodities,” Grimm told The Bull.

If one goes back a year, the stock has actually dipped 14.5%.

But Grimm is not too worried, pointing out that the business momentum is there for all to see.

“The company posted encouraging first half 2023 results, in our view.”

South32 shares also currently pay out a handy dividend yield of 6.48%.

The wider professional community generally agrees with Grimm.

According to CMC Markets, 11 out of 19 analysts currently rate South32 as a buy. Seven recommend it as a hold.

Lithium demand will be fine in the long run

Pilbara Minerals Ltd (ASX: PLS), like many lithium shares, has dropped almost 30% over the past six months.

But, with production going so well, the stock is “worth adding to portfolios”, according to Grimm.

“The company produced more than 300,000 dry metric tonnes of spodumene concentrate in the first half of fiscal year 2023, up 83% on the prior corresponding period,” he said.

“The board has approved the P1000 project to increase Pilgangoora production capacity by 47%.”

Although producers of the important battery ingredient have all suffered from a crash in the commodity price, a recent acquisition attempt verifies the long-term thirst for lithium.

“It’s worth noting that lithium company Liontown Resources Ltd (ASX: LTR) rejected a takeover proposal from Albemarle Corporation (NYSE: ALB) on March 28.”

Grimm’s peers largely agree with his bullish stance for Pilbara.

Ten out of 17 analysts currently surveyed on CMC Markets rate the stock as a buy.

The post ‘Attractive value’: 2 ASX 200 mining shares ‘worth adding’ right now appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Why are ASX lithium shares leaping ahead today?
• 50% fall: Are ASX 200 lithium shares a bargain buy right now?
• Buy Pilbara Minerals and these ASX growth shares in April: experts

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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The world banking sector has been facing turmoil recently, but is this an issue for Australia’s ASX 200 big four banks?

The ‘big four’ refers to Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corporation (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ), and National Australia Bank Ltd (ASX: NAB).

It was a good day for ASX bank shares yesterday. At market close on Tuesday, Westpac shares finished 1.75% higher at $22.15 apiece, CBA lifted 0.76% to $99.76 a share, ANZ shares jumped 1.6% to $23.56 each, while NAB climbed 1.33% to $28.25 a share.

For perspective, the S&P/ASX 200 Index (ASX: XJO) closed 1.26% higher.

Let’s take a look at the outlook for Australia’s banks.

Most capitalised

Australia’s ASX 200 big four banks are the most capitalised in the world, Morgan Stanley analysis shows.

This is relevant in light of recent global bank collapses, including California’s Silicon Valley Bank. Credit Suisse is also subject to a takeover by UBS after it faced liquidity issues including “significant deposit and net asset outflows”.

However, Australian banks have plenty of capital, recent analysis shows. Morgan Stanley Australia head of research Richard Wiles, quoted in the Australian Financial Review, said:

The major Australian banks learned the lessons of the 2008 global financial crisis and have significantly strengthened their liquidity, funding and capital.

Balance sheet risk remains modest, but earnings risk has increased due to a likely move up in the cost of deposits and wholesale funding.

Meanwhile, Australia’s treasurer Jim Chalmers has also recently touted the stability of Australia’s banks.

In an opinion piece published in the AFR, he said:

The collapse of Silicon Valley Bank and Signature Bank in the US and the takeover of Credit Suisse has sent waves through global financial markets over the past month but Australian banks are well-capitalised, well-regulated and well-placed to deal with this new source of volatility in the global economy.

We are confident but not complacent in the face of these pressures.

Looking ahead, UBS has placed a $100 price target on CBA shares, while Morgans has dropped its price target on CBA to $96.11.

Meanwhile, Morgans has an add rating on Westpac with a $25.80 price target. However, UBS put a neutral rating on Westpac late last month with a $22.50 price target. This is still 1.6% higher than yesterday’s closing price.

ANZ has also recently been named as a buy by the team at Citi with a $29.25 price target. UBS has recently placed a buy rating and $25 price target on ANZ shares.

Finally, the team at Goldman Sachs is positive on NAB shares. The broker has a $35.42 price target on NAB shares and recommends the bank as a buy.

Share price snapshot

The CBA share price has slid nearly 7% in the last year, while NAB shares have shed 14%.

Westpac shares have lost nearly 9% over the past 12 months, while ANZ shares have fallen more than 14%.

The post It’s official, the ASX 200 big four banks are the world’s most capitalised. Should you buy? appeared first on The Motley Fool Australia.

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More reading

• Mortgage competition has never been hotter, so are NAB shares worth buying right now?
• Is the CBA share price heading back over $100?
• How to start building a lifelong passive income with just $5 a day: Tips and Tricks
• Are these ASX 200 dividend shares must-buys for passive income investors?
• Could right now be a great time to buy ASX 200 bank stocks for passive income?

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 recommended Westpac Banking. 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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Are you looking to build a diversified income stream that can provide steady returns over the long-term?

One way that investors can achieve this is by investing in high-quality dividend-paying ASX shares from across different sectors.

With that in mind, listed below are a couple of ASX dividend shares that have a strong track record of paying consistent dividends and have the potential to grow their payouts over time.

And the good news is that they also have the potential to provide meaningful share price upside from current levels according to analysts. Here’s what you need to know about these shares that could provide a reliable and growing stream of passive income:

Dicker Data Ltd (ASX: DDR)

The first ASX dividend share that could be a top option right now for passive income seekers is Dicker Data.

It is one of the largest technology hardware, software, cloud, cybersecurity, access control and surveillance distributors in Australia and New Zealand.

Over the last decade, the company has been a quiet achiever going from a largely unknown small cap to a $1.5 billion member of the ASX 300 index.

Pleasingly for income investors, the company’s dividends have grown along with its stature. For example, in FY 2023 and FY 2024, Morgan Stanley is forecasting fully franked dividends per share of 43.8 cents and 48.8 cents, respectively.

This is more than triple the 14 cents per share it paid in FY 2014 and will mean yields of 5.2% and 5.8%, respectively, based on the current Dicker Data share price of $8.40.

Morgan Stanley also sees scope for its shares to rise by almost 20%. It has an overweight rating and $10.00 price target on them.

Transurban Group (ASX: TCL)

Another ASX dividend share that could provide investors with a reliable and growing passive income stream is Transurban.

Thanks to the strong pricing power that this toll road operator has, together with its positive exposure to inflation, it could be a great long term option for investors.

Citi is positive on the company and is forecasting dividends per share of 58 cents in FY 2023, then 60 cents in FY 2024 and 65 cents per share in FY 2025. Based on the current Transurban share price of $14.60, this will mean yields of 4%, 4.1%, and 4.45%, respectively.

It is also worth highlighting that these dividends are up from 34 cents per share in FY 2014, which demonstrates just how far its payouts have come since then.

Citi also sees decent upside ahead for its shares with its buy rating and $16.00 price target.

The post Creating a diversified income stream: Top ASX dividend shares to buy today according to analysts appeared first on The Motley Fool Australia.

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More reading

• Analysts reckon you should add these ASX dividend shares to your retirement portfolio
• Top defensive ASX shares to buy in April 2023
• Buy Pilbara Minerals and this ASX dividend share: analysts
• Boost your passive income with these ASX dividend shares: analysts
• Analysts name 2 ASX dividend shares to buy right now

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 Dicker Data. The Motley Fool Australia has positions in and has recommended Dicker Data. 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 Tuesday, the S&P/ASX 200 Index (ASX: XJO) was in fine form and stormed higher. The benchmark index rose 1.3% to 7,309.9 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 expected to rise again

The Australian share market looks set to rise on Wednesday following a relatively positive night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 35 points or 0.5% higher this morning. In late trade on Wall Street, the Dow Jones is up 0.4%, the S&P 500 is up 0.1% and the Nasdaq has dropped 0.3%.

Oil prices charge higher

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a strong session after a solid night for oil prices. According to Bloomberg, the WTI crude oil price is up 2.1% to US$81.42 a barrel and the Brent crude oil price has risen 1.6% to US$85.53 a barrel. This was driven by hopes that the US Federal Reserve may ease up on its policy tightening after a key U.S. inflation report this week.

South32 shares are a buy

The South32 Ltd (ASX: S32) share price could be great value according to a note out of Goldman Sachs. This morning, its analysts have upgraded the mining giant’s shares to a buy rating with a $4.90 price target. Goldman commented: “We upgrade S32 to Buy (from Neutral) on valuation and FCF and like the company for base metals exposure (~70% of EBITDA).”

Gold price higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a good day after the gold price rose overnight. According to CNBC, the spot gold price is up 0.9% to US$2,021.1 an ounce. The precious metal rose on hopes that interest rate hikes could be coming to an end.

Buy Rio Tinto shares

Goldman Sachs is also bullish on Rio Tinto Ltd (ASX: RIO) shares and is recommending them ahead of the miner’s quarterly update. This morning, the broker has reiterated its conviction buy rating and $138.30 price target on its shares. It notes that “Pilbara shipment data [is] indicating a 13% YoY increase in Pilbara iron ore shipments to ~80Mt putting RIO well on track to hit the top end of the 320-335Mt guidance range for 2023.”

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

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Best ASX energy share to buy now: Woodside vs. Santos
• 3 things I wish I knew before I started investing in ASX 200 shares
• Gold bug bites central banks: Is it time to buy Northern Star shares?

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 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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Investing millions or billions of dollars at a time may be the norm for Warren Buffett and his team at Berkshire Hathaway (NYSE: BRK.B), but don’t worry if you don’t have that kind of luxury. Even investing as little as $300 a month can reap significant rewards by following his methods and approach.

While replicating his $100 billion+ fortune over the next 80 years may not be feasible, adopting his mindset and strategy could lead to a more comfortable and luxurious lifestyle in the long run for readers.

Buffett loves to read

One of the most powerful tools for investors is knowledge. Buffett has explained many times that he spends most of his workday reading books, financial reports, and newspapers.

Staying informed can provide valuable insights into a company’s operations, capital allocation, managerial expertise, efficiency, and addressable market, among many other factors. These are all important items to consider before making an investment decision.

And not just for the ASX shares you plan to buy. Understanding weakness in a business could reveal a more promising competitor or the formation of new market opportunities. If you spot things like this in your research, you could potentially identify lucrative stocks early on in their journey.

Let compounding work for you

Leveraging compounding can work wonders for a portfolio and ultimately an investor’s wealth. Just look at Buffett, who has been benefiting from it for decades by making consistent investments.

And while it can be tempting to stop investing during times of volatility, waiting out the storm is seldom the best course of action. That’s because waiting for financial markets to settle down is a form of market timing, which history has shown is a loser’s game based mostly on luck.

Missing out on incredible gains is an inevitable consequence of waiting for the storm to pass for ASX shares. After all, stock market recoveries are some of the most lucrative periods for investors to capitalise on. So, if you miss that rebound, your portfolio could be left behind.

This is something that Buffett won’t miss out on. Despite recent chaos with inflation, interest rates, and the banking crisis, he has been on a shopping spree.

Investing $300 a month

If you wanted to follow in Buffett’s footsteps on a budget, you could look at drip-feeding $300 a month into an investment portfolio.

It may not sound like it has the potential to be very lucrative, but history has shown that it can be.

For example, $300 a month invested in ASX shares for the last 30 years (generating the market return of 9.6% per annum), would have turned into almost $580,000.

And thanks to the power of compounding, if you were to do the same for just 6 more years, you would have broken through the million dollar mark.

The key is to find a strategy and stick with it through thick and thin.

The post How to invest $300 a month using the Warren Buffett method appeared first on The Motley Fool Australia.

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More reading

• How to start building a lifelong passive income with just $5 a day: Tips and Tricks
• How ASX investors can build a $1 million portfolio in 12 years
• I’d listen to Warren Buffett to grow my wealth with ASX shares
• Warren Buffett attributes his investing success to these 2 things
• How to build a $100,000 ASX share portfolio in 6 years

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 Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway. 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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