Tag: Motley Fool

Looking for growth shares to buy in January? Then you won’t want to miss out on the ones listed below.

Both these ASX growth shares have been tipped for big things in the future:

Altium Limited (ASX: ALU)

The first growth share to look at is Altium. Inside most electronic devices you will find a printed circuit board (PCB). These circuit boards have highly complex designs and are integral to the operation of these devices. This means specialist software is required to design and manufacture them.

Altium is a leading PCB design software company which is aiming to dominate its industry this decade with its Altium Designer and cloud-based Altium 365 platforms. The latter is being seen as the main driver of growth in the future and the key to it achieving its target of 100,000 subscribers and US$500 million in revenue by FY 2026. This compares to its subscribers of 51,000 and revenue of US$189 million in FY 2020.

One broker that is confident on its prospects is Morgan Stanley. Its analysts have an overweight rating and $40.00 price target on the company’s shares.

Xero Limited (ASX: XRO)

Xero is a leading cloud-based business and accounting software provider with a focus on small to medium sized businesses.

Thanks to its successful evolution into a full service small business solution over the last few years, the company has been growing its customer numbers and revenues at a rapid rate. Even during the pandemic. This has led to very strong returns for shareholders.

Pleasingly, due to the ongoing shift to cloud-based solutions, its global market opportunity, and growing app ecosystem, Xero has been tipped for more of the same in the future.

Analysts at Goldman Sachs believe Xero is well-positioned for decades of strong revenue growth. The broker has a buy rating and $157.00 price target on the company’s shares.

More reading

• Top ASX shares to buy in January 2021
• 4 of the best ASX shares to buy in 2021
• Here’s how the S&P/ASX All Technology Index fared in 2020
• 2 quality ASX growth shares to buy for 2021
• The ASX tech shares to buy in 2021

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. 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 Bruce Jackson.

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ASX media shares have had a volatile year in 2020, having plunged to their lows during the height of the pandemic in March, followed by a strong recovery in the second half of the year.

Media shares are generally exposed to the cycle of the economy, as advertising budgets are usually the first expense to get cut at the slightest hint of a downturn.

The pandemic has shown, however, that those companies that have diversified content across the digital platforms are the ones who are more resilient. The sector has also seen a lot of mergers and acquisitions over the last few years.

Here, we’ll take a look at 4 ASX media shares that have done particularly well in 2020.

Company	1-year share price performance	Current share price	Market cap
1. NZME Ltd (ASX: NZM)	66%	$0.62	$0.13 billion
2. Nine Entertainment Co. Holdings Ltd (ASX: NEC)	29%	$2.32	$4.02 billion
3. News Corp (ASX: NWS)	13%	$23.14	$13.71 billion
4. HT&E Ltd (ASX: HT1)	9%	$1.85	$0.49 billion

1. New Zealand Media and Entertainment

The NZ-based media company has had a fantastic year, with its share price rising by 66%.

NZME owns a portfolio of newspapers, radio stations, and digital platforms in New Zealand, and its content is accessed by more than 3.2 million Kiwis.

The company delivered a solid first-half FY20 ending 30 June, reporting a 5% growth in earnings before interest, tax, depreciation, and amortisation (EBITDA) to NZ$28.9 million.

That growth was underpinned by soaring readership of its flagship online news website, the New Zealand Herald, as Kiwis flocked to trusted sources of information on the pandemic.

This propelled the platform to become the number one news website in New Zealand in 2020.

2. Nine Entertainment

The Nine share price has done fantastically well this year, rising by 29%.

In its last financial update to the market two weeks ago, the media giant said that trading conditions have continued to improve, with EBITDA for the six months to 31 December expected to be up by more than 40%.

Of particular note, Nine’s December quarter is expected to show growth in metropolitan free-to-air advertising revenue of almost 20%. Its digital platform Domain has also shown solid growth during the pandemic.

Nine owns some of Australia’s well-known media brands including The Australian Financial Review, the Nine Network, and the Domain platform.

According to its financial report, Nine generates 90% of its earnings from its Nine Network channel – one of only three metropolitan television channels licensed to broadcast free-to-air in Australia. The total market for free-to-air advertising is $2.7 billion, of which Nine commands the number one position at 39%.

3. News Corp

The News Corp share price has done surprisingly well this year, rising by 13%, despite the pandemic affecting its advertising clients.

Interestingly, the company’s financial results don’t seem to support its share price performance.

In the last two quarters, the company has reported falling revenues. Its fourth-quarter FY20 showed revenues of $1.92 billion, a 22% decline compared to the prior year. Revenues declined again by 10% in the first-quarter of FY21 to $2.12 billion.

The media giant is no stranger to the average Australian. It’s owned and co-chaired by former Australian Rupert Murdoch, alongside his son Lachlan.

The company owns tabloid newspapers – The Daily Telegraph, The Herald-Sun, as well as newspapers such as The New York Post and the Wall Street Journal. It also owns a significant stake in online property classifieds company REA Group Ltd (ASX: REA), as well as a stake in pay-TV operator Foxtel.

The money-losing Foxtel has been a target of takeover, with the company rejecting an offer from an unnamed buyer back in November. 

4. Here, There, & Everywhere

HT&E, or “Here, There & Everywhere” as it’s formally called, has had a respectable 2020. The HT&E is up by 9% over the year, at the time of writing.

The media company owns regional radio stations, such as the KIIS Network, Gold FM, The Edge, and Canberra’s Hit104.7 and Mix106.3 stations.

The company is currently involved in a lengthy legal battle over the way it accounted for the sale of some of its New Zealand assets.

In April, HT&E emerged as a major shareholder in outdoor advertising business oOh!media Ltd (ASX: OML), after buying $15 million worth of shares.

In its half-year FY20 results, the company reported top line revenue of $93 million, down 29% over the previous year. This is despite an increase in radio consumption during the COVID-19 lockdown period. No guidance for the rest of FY20 has been released.

More reading

• Here’s how the S&P/ASX All Technology Index fared in 2020
• Why the REA Group (ASX:REA) share price has stormed 43% higher in 2020
• 3 of the best ASX shares to buy in January
• The most crazy ASX chart of 2020
• REA Group (ASX:REA) share price on watch after acquisition update

Motley Fool contributor Eddy Sunarto 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 Bruce Jackson.

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There are some high-quality ASX shares that Aussies have access to. Some businesses could be worth watching for the long-term such as these three:

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is a business that facilitates electronic donations to large and medium US churches.

One fan of this ASX share is fund manager Ben Griffiths from Eley Griffiths who said: “Over the last 12 months it has become clear Pushpay is at an inflection point for both cashflow and earnings. Under the stewardship of CEO Bruce Gordon, Pushpay has transitioned from a founder-led investment phase into an optimize/monetization phase. What is more surprising is the very conservative nature of the accounts (a rarity in small cap tech, outside Iress Ltd (ASX: IRE)). We believe the next few years for Pushpay will be rewarding and that COVID-19 will accelerate the already entrenched trend to digital giving/engagement from cash.”

Pushpay itself is predicting that FY21 will be a year of large growth. Earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) is projected to rise by more than 100% to a range of US$54 million to US$58 million.

The company is expecting its profit margins to keep rising as it gets larger. The EBITDAF margin rose from 17% to 31% in the FY21 interim result. This means that more of the profit falls to the bottom line.

At the current Pushpay share price it’s valued at 26x FY23’x estimated earnings.

Betashares Nasdaq 100 ETF (ASX: NDQ)

This is an exchange-traded fund (ETF) which gives investors exposure to 100 of the largest businesses on the NASDAQ.

The ASX share allows Aussies to get indirect exposure to many of the world’s biggest technology companies.

Which companies? Its biggest holdings are names like: Apple, Microsoft, Amazon, Alphabet, Tesla, Facebook, Nvidia, PayPal and Adobe. A little further down the holdings list are businesses like Netflix, Intel, Broadcom, Qualcomm, Texas Instruments and Intuitive Surgical.

However, it be interesting to note that this isn’t solely a tech ETF, other holdings include names like Costco, PepsiCo, Starbucks, Gilead Sciences, Moderna, Monster Beverage and Lululemon Athletica.

The ETF has an annual management fee of 0.48%, which is higher than some other globally-focused ETFs like iShares S&P 500 (ASX: IVV).

Betashares Nasdaq 100 ETF has been a really strong performer over the years. Its net return over the past year has been 34.4% and over the past five years it has produced average net returns of 21.5% per annum.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is an e-commerce business that sells homewares and furniture online. Products are directly sent to customers by suppliers which assists with fast delivery and reduces inventory requirements.

In FY20 it grew full year revenue by 74% to $176.3 million and EBITDA went up by 483% to $8.5 million, with the adjusted EBITDA margin rising from 2.5% to 5.3%.

In the period between 1 July 2020 to 19 October 2020, the ASX share’s revenue rose by 138%. Temple & Webster generated $8.6 million of EBITDA in the first quarter, more than the entire amount made in FY20.

Temple & Webster’s CEO Mark Coulter has explained the benefits of gaining market share during the most-affected COVID-19 months: “The NAB online sales index suggests our category grew around 57% during the months of April to July, while we grew around 150% for the same period. We believe this is due to the increasing benefits of scale as we get larger. We are forging closer relationships with our suppliers as we become a more significant part of their business which allows us to obtain stock security, better terms and exclusive product ranges. We are also making larger investments in areas such as technology and data, brand awareness and our private label products; and we can produce more content by having more creative resources. In effect, the bigger we get, the better and strong our customer proposition becomes, which is a virtuous cycle.”

At the current Temple & Webster share price it’s valued at 35x FY23’s estimated earnings.

More reading

• Top ASX shares to buy in January 2021
• Here are the best All Ordinaries performers of 2020
• 3 small cap ASX shares to buy for 2021
• 3 ASX shares to buy for 2021
• 2 fantastic ETFs to buy in 2021

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS, PUSHPAY FPO NZX, and Temple & Webster Group Ltd. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS, PUSHPAY FPO NZX, and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Are you looking to buy some dividend shares next week? Then listed below are two shares that might be worth considering.

Here’s what you need to know about them:

Accent Group Ltd (ASX: AX1)

Accent is a leading footwear-focused retailer that owns a number of retail store brands such as HYPE DC, Platypus, The Athlete’s Foot, and Sneaker Lab. It has also just launched a couple of new brands, Australian Stylerunner and Pivot. This is part of its store expansion plan, which is aiming to add ~80 new stores in FY 2021.

The company has been a very positive performer over the last 12 months despite the pandemic. In November Accent held its annual general meeting and revealed that its sales for the first 20 weeks of FY 2021 were well ahead of its expectations. Excluding its Auckland and Victorian stores, Accent’s like for like sales were up 15.7% over the period. Its online sales were even stronger thanks to the shift to online shopping. It reported a 129% increase in sales compared to the same period last year.

Analysts at Morgan Stanley expect the company to pay a fully franked dividend of 9.4 cents per share in FY 2021. Based on the latest Accent share price, this represents a 4% dividend yield.

Coles Group Ltd (ASX: COL)

Another dividend share to look at is Coles. This supermarket operator has been performing very positively this year. The company delivered a 6.9% increase in sales to $37.4 billion in FY 2020 and has followed this up with further strong growth in the first quarter of FY 2021.

During the three months that ended 30 September, Coles reported an impressive 10.5% increase in total sales over the prior corresponding period to $9.6 billion.

Goldman Sachs believes this has put the company in a position to deliver a strong result in FY 2021. So much so, the broker has put a buy rating and $20.50 price target on its shares and is forecasting a fully franked 64 cents per share dividend. Based on the latest Coles share price, the latter equates to a 3.5% yield.

More reading

• 2020 ASX recap of the year we’ll never forget
• 2 ASX dividend shares to buy for 2021
• Smash term deposits with these ASX dividend shares
• Why did the Accent (ASX:AX1) share price defy the odds in 2020?
• 2 star stocks for your ASX retirement portfolio

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The arrival of COVID-19 in early 2020 changed life as we know it. Forecasts for the year were blown out of the water as the pandemic spread globally. The S&P/ASX 200 Index (ASX: XJO) fell 36% between February and March as concerns about the economic fall out shook investors.

The share market has slowly recovered over the course of 2020, but the recovery has been uneven. While many ASX shares have suffered directly or indirectly as a result of the pandemic, one sector has soared on pandemic tailwinds. Share prices have risen to record highs as a confluence of factors drive customer numbers skyward. We’re talking, of course, about buy now, pay later (BNPL) ASX shares. 

BNPL ASX sector of the year 

The BNPL sector gave the performance of the year with the top five ASX shares in the sector delivering serious share price gains. Let’s take a look at their performance over the past couple of years: 

Company	2019 share price change	2020 share price increase
Afterpay Ltd (ASX: APT)	153%	283%
Zip Co Ltd (ASX: Z1P)	249%	48%
Sezzle Inc (ASX: SZL)	-12%	362%
Splitit Ltd (ASX: SPT)	25%	70%
Openpay Group Ltd (ASX: OPY)	-2%	86%

Customer numbers climb 

ASX BNPL shares have seen customer numbers boom over this period. The dual forces of increased digital consumption and millennial spending power have seen BNPL services go from niche to mainstream in just a couple of years.

Increasing numbers of customers are ditching credit cards in favour of the instalment solutions offered by BNPL providers. The pandemic pushed greater numbers of consumers into shopping online, driving more customers to BNPL solutions. 

According to Mergermarket, Australian BNPL revenue amounted to $680 million in FY20 and is expected to reach $1.1 billion by FY25. Nearly 2 million Australians used a BNPL product last year, with BNPL growing from 3% of ecommerce payments in 2018 to 8% in 2019.

BNPL solutions are gaining ground at the expense of credit cards, which are less popular with millennials. COVID has also driven more consumers to the BNPL space, both due to increased online retailing and as an alternative way to finance purchases.

ASX BNPL shares benefit

You only have to take a look at the customer numbers of ASX BNPL shares to see these trends borne out.

Afterpay’s 6.1 million active customers at November 2019 had grown to 11.2 million by September 2020. Afterpay shares dropped as low as $8.90 in the March crash, but have staged one of the strongest recoveries in the ASX in 2020, rallying to above $120. Afterpay now has a market capitalisation of more than $34 billion and joined the S&P/ASX 20 Index (ASX: XTL) in the December quarterly rebalance. 

Afterpay is the largest BNPL player on the ASX. It reported $4.1 billion in underlying sales in the first quarter of FY21, a huge 119% increase on the prior corresponding period, which saw $1.9 billion in underlying sales. But Afterpay isn’t the only BNPL player seeing huge increases in customers and transactions. Zip Co saw customer numbers increase to 5.3 million by November 2020, up from 1.8 million at the end of 2019. Zip Co recorded quarterly transaction volumes of $943.1 million in the first quarter of FY21, a 96% increase year on year. 

Similarly, Sezzle reported customer numbers of 1.79 million at the end of the September quarter, with transaction volumes of $318.2 millon. This is nearly a threefold increase in customer numbers and fivefold increase in transaction volumes in a year — in the prior corresponding period, Sezzle had 644,509 customers and transaction volumes of just $68.8 million.

It’s a similar story for Splitit and Openpay — customer numbers and transaction volumes are increasing rapidly. 

Splitit reported 362,000 total shoppers in the September quarter, with 186,000 active shoppers. This was a 48% increase year on year. Over the same period transaction volumes increased 214% to US70.9 million.

Openpay had 372,000 active customers at the end of the September quarter, a 145% increase year on year. Transaction volumes were $68 million for the quarter, up 95% from $34.9 million in the first quarter of FY20. 

What’s next for the BNPL sector? 

So what’s next for the BNPL sector? According to Mergermarket, M&A activity is likely to take place in this space as players seek to consolidate market share. The number of competitors in the sector has been increasing over the past couple of years, with some retailers even offering their own BNPL solutions. Traditional finance players and neobanks are also looking at the space with interest.

Although there are some niche BNPL providers, many players are operating in the same space — financing small ticket purchases of under $1,000. BNPL providers need a critical mass of consumers to use their platform in order to attract merchants, so mergers would allow for consolidation of market share. 

BNPL shares performed strongly in 2018 and 2019, but came of age in 2020 as the pandemic pushed consumers to digital finance solutions. The regulatory concerns that plagued the sector have subsided for now, with industry players working with the Australian Securities and Investments Commission on a code of conduct.

As the sector matures, there is no doubt BNPL solutions are here to stay.  

More reading

• 2 important investment lessons from 2020
• The 5 best performing ASX 200 shares of 2020
• Top ASX shares to buy in January 2021
• Here are the best All Ordinaries performers of 2020
• The ASX sectors hardest hit by COVID-19 in 2020

Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) ended the final week of 2020 in a disappointing fashion. The benchmark index lost 1.2% of its value to finish at 6,587.1 points.

While a good number of shares dropped lower, some managed to defy the market weakness and push higher. Here’s why these were the best performers on the ASX 200 last week:

Omni Bridgeway Ltd (ASX: OBL)

The Omni Bridgeway share price was the best performer on the ASX 200 last week with a 10.8% gain. This may have been driven by a recent broker note out of Goldman Sachs. Its analysts are very bullish on the dispute resolution finance company and recently put a conviction buy rating and lofty $5.50 price target on its shares. This compares to the latest Omni Bridgeway share price of $4.30.

Sims Ltd (ASX: SGM)

The Sims share price was some way behind as the next best performer with a 5.1% gain. This was despite there being no news out of the scrap metal company. At one stage last week the company’s shares hit a two-year high. This is despite China no longer accepting scrap metal shipments from abroad as of 1 January.

Mineral Resources Limited (ASX: MIN)

The Mineral Resources share price was on form and charged 4.6% higher last week. This stretched its annual gain to over 125%. Investors have been buying the mining and mining services company due to its exposure to two of the hottest commodities around at the moment – iron ore and lithium. They appear to believe the company is well-placed to deliver a very strong result in FY 2021.

A2 Milk Company Ltd (ASX: A2M)

The a2 Milk share price continued its recovery and pushed 4.6% higher last week. This means the infant formula and fresh milk company’s shares have now rebounded by around 15% from their December low. Investors sold off the company’s shares last month after it was forced to downgrade its earnings guidance due to weakness in the daigou channel.

More reading

• The 5 best performing ASX 200 shares of 2020
• 3 top ASX share picks for 2021 from NZ brokers
• Why the A2 Milk (ASX:A2M) share price is down 18.5% in 2020
• ASX 200 drops lower
• Why these 3 ASX shares smashed it in 2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It was a disappointing finish to the year for the S&P/ASX 200 Index (ASX: XJO). The benchmark index fell 1.2% over the shortened week to end at 6,587.1 points.

Four shares that fell more than most are listed below. Here’s why they were the worst performers on the index last week:

Growthpoint Properties Australia Ltd (ASX: GOZ)

The Growthpoint Properties Australia share price was the worst performer on the ASX 200 last week with a 5.4% decline. This was driven by the property company’s shares trading ex-dividend for its interim dividend. For the same reason, APA Group (ASX: APA), Mirvac Group (ASX: MGR), Stockland Corporation Ltd (ASX: SGP), and Vicinity Centres (ASX: VCX) shares tumbled lower last week.

GUD Holdings Limited (ASX: GUD)

The GUD share price was out of form last week and dropped 4.2% lower over the shortened week. On Friday the automotive and water products company completed the acquisition of the ACAD business from AMA Group Ltd (ASX: AMA) for $70 million. This excludes the ACM Auto Parts and Fluiddrive businesses. Given that its shares have underperformed since announcing the deal, investors may not be overly convinced with the purchase.

QBE Insurance Group Ltd (ASX: QBE)

The QBE share price wasn’t far behind with a 3.7% decline. The insurance giant’s shares have come under pressure recently after it provided its guidance for FY 2020. QBE expects to report an adjusted net cash loss after tax of approximately $780 million. This includes a pre-tax impact of $470 million from COVID-19 costs. There are also additional claims from trade credit, lenders’ mortgage insurance, casualty classes and business interruption.

Bingo Industries Ltd (ASX: BIN)

The Bingo share price lost 3.6% of its value last week. While there was no news out of the waste management company last week, there had been speculation that it was a takeover target for private equity firms. However, with no bid forthcoming, some investors may have been selling its shares.

More reading

• The 5 worst performing ASX 200 shares of 2020
• The ASX sectors hardest hit by COVID-19 in 2020
• ASX 200 drops 1.4%
• 2020 ASX recap of the year we’ll never forget
• Cimic (ASX:CIM) share price wobbles on $2.2 billion sale news

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of APA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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As I mentioned here earlier today, IBM estimates that the pandemic has accelerated the shift to online shopping by as much as five years.

This bodes well for a number of companies on the Australian share market such as the ecommerce companies listed below.

Here’s what you need to know about them:

Adore Beauty Group Limited (ASX: ABY)

The first ecommerce company to look at is Adore Beauty. It is a recently listed online retailer which sells third-party beauty and personal care products to over 590,000 active customers across the ANZ region. From these customers, the company is expecting to generate revenue of $158.2 million in 2020. This will be up 76% on the prior corresponding period.

Pleasingly, this is still only scratching at the surface of its opportunity in the ANZ market. The company notes that Frost & Sullivan estimates that the ANZ beauty and personal care products market was worth $10.9 billion in 2019.

One broker that is positive on its prospects is Morgan Stanley. It has an overweight rating and $8.35 price target on the company’s shares. This compares to the current Adore Beauty share price of $5.38. It believes the company will benefit from the shift to online shopping.

MyDeal.com.au Limited (ASX: MYD)

Another ecommerce company to look at is MyDeal.com.au. It is an online retail marketplace provider with a focus on furniture, homewares, appliances, technology, baby products, and hardware.

Due to the aforementioned acceleration in the shift to online shopping this year, MyDeal has been a very strong performer. During the first quarter of FY 2021, the company delivered a 317% increase in gross sales to $56.67 million. This was underpinned by a 268% increase in active customers to 669,897.

Analysts at RBC Capital Markets are fans of the company. The broker has a buy rating and $1.60 price target on its shares. RBC Capital Markets thinks the company is at an inflection point as annualised gross transaction value exceeds $200 million and customer numbers approach 700,000.

More reading

• 2 growing mid cap ASX shares to buy
• Leading brokers name 3 ASX shares to buy today
• 2 growing small cap ASX shares to watch in 2021
• 2 exciting small cap ASX tech shares to buy
• 2 top ASX shares to buy according to WAM

Motley Fool contributor James Mickleboro 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 Bruce Jackson.

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Happy New Year, Fools!

Welcome to 2021.

Frankly, I’d hoped for a cleaner, COVID-Community-Transmission-free, transition from last year to this, but turns out we don’t always get what we want. How very 2020.

Speaking of which, It is worth remembering that on this day, last year, we’d kind of heard of a new respiratory virus out of China, but had no idea just what a wrecking ball it would be.

Indeed, our time and attention was taken up primarily by the threat — and reality — of bushfires, unprecedented in size, scale and ferocity, that were menacing much of the country.

Yes, I know everyone is sick of the retrospectives.

My point, though, is a slightly different one: If we didn’t know what was coming on January 1, 2020, why would you listen to forecasts for 2021?

I’ve been asked plenty of times over the past two weeks for my 2021 forecast. Each time, I politely decline, admitting that I don’t know what’s coming, and nor does anyone else.

And then I recite one of my favourite quotes, from John Kenneth Galbraith: “Pundits forecast not because they know, but because they are asked”.

(The generous questioners laugh along. I dare say more than one of them makes a mental note to ask someone else next year. Such are the occupational hazards when you’re a financial adviser.)

So, if you can’t accurately predict the future, what should you do?

The first, hopefully self-evidently, is ‘don’t try’. 

Accept that you don’t know, and move on.

The second is that you should, in the sporting and management consulting jargon, ‘control the controllables’.

In other words, stop worrying about the things you can’t control, but endeavour to do well those things you have within your area of influence.

Those are the things that can meaningfully improve your odds of investment success.

And yes, because it’s New Year’s Day, let’s call them resolutions.

And here they come.

Spoiler alert, though. Well, two, actually.

One; this list isn’t new.

Two: it’s not magic.

This list is probably best considered the ‘get rich slowly’ list.

I can offer no guarantees (legally, or morally).

But this list is, in my view, the best foundation you can have, as you continue (or start) a journey to wealth creation.

No, it can’t beat a trust fund, a lotto win, or an inheritance.

It won’t instantly lower your bills or get you a pay rise.

But it’s a list of actions and approaches that I think will put — and keep — you on the straight and narrow as you steadily build your wealth.

So here’s to 2021. And to just a little less drama than last year…

Fool on!

13 Foolish New Year’s Resolutions

To help you invest, better!

1. I will live below my means — spending less than I earn.

2. I will save money into a rainy-day fund so I’m ready for what life might bring.

3. I will pay off my credit card debt, and then only spend what I can pay off within the interest free period each month.

4. I will regularly add to my investment account.

5. I will invest money I don’t need for at least 3-5 years to build my nest egg.

6. I will learn more about investing, taking control of my financial future.

7. I will invest in quality businesses, buying a slice of the company, not just a code on a screen.

8. I will buy shares in a company with the intention of holding them for the long term.

9. I will sell when my investment thesis fails, the company is overvalued or I have a better idea.

10. I will avoid anchoring my decisions to the price I paid for my shares.

11. I will remember that the market can be moody and over-react, both on the upside and the downside.

12. I will expect volatility, and I won’t let it spook me into selling. Indeed, volatility can offer me great opportunities!

13. I will let the market offer me prices (be my servant), not dictate my mood or actions (be my master).

(Want a printable version? I’m glad you asked. Here it is!)

More reading

• 2 important investment lessons from 2020
• The 5 worst performing ASX 200 shares of 2020
• The 5 best performing ASX 200 shares of 2020
• Stock market rally: are there any shares that could double my money in 2021?
• Top ASX shares to buy in January 2021

Motley Fool contributor Scott Phillips 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 Bruce Jackson.

The post Simple steps to get financially fit in 2021 appeared first on The Motley Fool Australia.

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2020 is certainly a year that we will not forget in a hurry. Never before (and hopefully never again) have we seen such incredible volatility on the Australian share market.

At the height of the pandemic, there were days when the S&P/ASX 200 Index (ASX: XJO) moved more in a single session than it would ordinarily do in a whole year. This was much to the delight of day traders, who thrive on volatility.

But for the average investor, this volatility was unsettling and a lot of tough lessons were learned over the last 12 months.

Here are two lessons learned during 2020:

Diversification is important.

Over the last few years, the bull market has seen most shares and sectors heading higher. In light of this, investors could be forgiven for entering 2020 without a truly diversified portfolio. However, the last 12 months have demonstrated just how important diversification is.

At the start of the year, nobody could have predicted what would happen to the travel market and thus the shares of Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB). Investors that were overweight with travel shares will have undoubtedly underperformed investors with more balanced portfolios.

Market crashes are opportunities.

When the share market is crashing and the ASX boards are a sea of red, it can be hard not to panic. But, as Warren Buffet once quipped, “Be fearful when others are greedy, and greedy when others are fearful.” The latter certainly proved to be excellent advice during the COVID-19 pandemic.

For example, at the height of the crisis the Afterpay Ltd (ASX: APT) share price dropped as low as $8.01 and the SEEK Limited (ASX: SEK) share price fell to a low of $11.23. Since then, the two companies have seen their share prices rise a massive ~1400% and 154%, respectively. This means that $10,000 investments at their lows would now be worth $150,000 and $25,400. Anyone brave enough to be greedy in March, will have been rewarded handsomely.

More reading

• The 5 worst performing ASX 200 shares of 2020
• The 5 best performing ASX 200 shares of 2020
• Top ASX shares to buy in January 2021
• Here are the best All Ordinaries performers of 2020
• The ASX sectors hardest hit by COVID-19 in 2020

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 important investment lessons from 2020 appeared first on The Motley Fool Australia.

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