Tag: Motley Fool

If you’re looking to bolster your portfolio with some ASX 200 shares, then you might want to consider buying the ones listed below.

Here’s why I think they could give most portfolios a boost:

a2 Milk Company Ltd (ASX: A2M)

The first ASX 200 share I would buy is a2 Milk Company. It is a growing infant formula and fresh milk company with a focus on A2-only products. It has been thanks to this point of difference that a2 Milk has stood out from the rest in a crowded market and delivered such strong growth. This has certainly been the case in China where it sales continue to grow rapidly. While FY 2021 looks set to be a rare off-year because of the pandemic, I’m confident it will bounce back strongly in FY 2022 as trading conditions normalise.

Cochlear Limited (ASX: COH)

I think Cochlear would be another great option. It is one of the world’s leading hearing solutions companies and has a long track record of delivering earnings growth. I’m confident this positive trend will continue for a long time to come thanks to the ageing populations tailwind. As the over 65 population grows, demand for its hearing solutions is likely to grow along with it.

REA Group Limited (ASX: REA)

REA Group is a digital advertising company that operates Australia’s leading property websites. It also operates real estate websites in Europe, Asia, and the United States. While trading conditions are admittedly tough now because of the pandemic, I expect these headwinds to ease once its passes. After which, I believe its earnings growth will accelerate once again. Another positive is the company has recently entered into a binding agreement to take a controlling interest in Elara Technologies. It is the operator of India’s fastest growing digital real estate business based on audience size.

Wesfarmers Ltd (ASX: WES)

A final ASX 200 share to consider buying is Wesfarmers. It is the company behind brands such as Bunnings, Kmart, Target, Catch, and Officeworks. It also owns a number chemicals and industrial businesses. And given its strong balance sheet and penchant for earnings accretive acquisitions, I wouldn’t be surprised if it added to its portfolio in the near future. If it does, this would give its already very positive long term outlook an extra boost.

More reading

• Is the REA Group (ASX:REA) share price a buy?
• I plan to invest heavily in ASX shares next week
• ASX 200 sinks 1.6%, ANZ (ASX:ANZ) reports FY20 result
• REA Group (ASX:REA) share price in focus amid acquisition news
• 3 great ASX growth shares to buy in November

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 Cochlear Ltd. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Cochlear Ltd. and REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 4 outstanding ASX 200 shares to buy with $4,000 appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/37WHymp

One small positive from the recent market turmoil is that it has dragged some quality shares down to very attractive levels.

Two ASX tech shares which I think are trading at levels that could lead to them generating strong returns for investors over the next decade are listed below. Here’s why I like them:

Appen Ltd (ASX: APX)

The Appen share price is currently trading 26% lower than its 52-week high. This means the global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence is trading at approximately 37x estimated FY 2021 earnings. I think this is a buying opportunity for investors that are prepared to make a long-term investment.

This is because business and government investment on machine learning and artificial intelligence is expected to grow significantly over the next decade. I expect this to lead to growing demand for its services. Especially given its history of working with some of the biggest tech companies in the world and its strong position in the government sector through its Figure Eight business.

Nearmap Ltd (ASX: NEA)

Another share that has fallen heavily from its 52-week high is this leading aerial imagery technology and location data company. As of Friday’s close, the Nearmap share price was down 28% from its 52-week high. I feel this has left its shares trading at an attractive level for long-term focused investors.

Management believes the company is well-placed for growth thanks to its recent capital raising and new growth initiatives. So much so, over the long term it is targeting annualised contract value (ACV) growth of 20% to 40% per annum, with underlying churn of less than 10%. Thanks to the quality of its offering, particularly its latest AI product, and its expansion opportunities, I believe it is well-placed to achieve this.

More reading

• How did the WAAAX shares perform in the last quarter?
• ASX 200 flat: ResMed smashes expectations, AMP surges on takeover talks
• 3 outstanding ASX growth shares to buy after the market selloff
• Are these small cap ASX shares the next Kogan (ASX:KGN) and Nearmap (ASX:NEA)?
• These ASX growth shares could be long-term market beaters

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 Nearmap Ltd. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended Nearmap Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 2 top ASX tech shares to buy after the recent market turmoil appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3kNhAWm

Earlier this month the Adore Beauty Group Ltd (ASX: ABY) share price landed on the Australian share market following the completion of its $269.5 million initial public offering (IPO).

The online beauty retailer’s shares had a sensational start and stormed to a high of $7.42. This was 10% higher than its IPO listing price of $6.75.

However, since then, the Adore Beauty share price has given back these gains and more.

At the close of play on Friday, its shares were fetching $5.70. This is a 15.5% decline from its listing price.

What is Adore Beauty?

Adore Beauty, which was created in a garage in Melbourne 20 years ago, is a leading online beauty retailer.

It generates its revenue through online sales of third-party beauty and personal care products to Australian and New Zealand consumers.

At the last count, the company had over 590,000 Active Customers and was expecting to generate revenue of $158.2 million from them in calendar year 2020.

From this, management expects to deliver a gross profit of $50.8 million and a net profit after tax of $3.5 million. This implies a gross margin of 32.1% and a net margin of 2.2%.

How does its valuation compare?

Adore Beauty currently has a market capitalisation of $537 million. This means its shares are changing hands for 3.4x forward sales and 153x forward earnings.

As a comparison, fellow ecommerce company Kogan.com Ltd (ASX: KGN) is priced at 2.2x estimated FY 2021 revenue and 45x estimated FY 2021 earnings.

Whereas Temple & Webster Group Ltd (ASX: TPW) shares are trading at 4x estimated FY 2021 revenue and 50x estimated FY 2021 earnings.

Should you buy Adore Beauty shares?

Based on the above valuations, Adore Beauty doesn’t jump out as being great value, particularly in comparison to Kogan.

However, it is worth remembering that it is still reasonably early days for the company and it has the potential to increase its sales at a rapid rate over the coming years and grow into its valuation. Especially given the relatively low online penetration rate of the beauty and personal care market in Australia.

According to a presentation, Frost & Sullivan estimates that beauty and personal care products sales in Australia (both online and offline) reached $10.9 billion in 2019.

However, just 7.3% of these sales were made online during the year. This lags international markets such as the United States and the United Kingdom, with estimated online penetration levels of 15.4% and 12.7%, respectively.

Adore Beauty believes that online penetration of the beauty and personal care market in Australia will continue to increase, and that COVID-19 may accelerate the rate of online penetration going forward. And I would have to agree.

Overall, I think the company could be a good buy and hold option for investors. Though, given the multiples its shares trade on, it might be best restricting an investment to just a small part of a balanced portfolio.

More reading

• Are these small cap ASX shares the next Kogan (ASX:KGN) and Nearmap (ASX:NEA)?
• Why Coles, HUB24, Mesoblast, & Temple & Webster shares are pushing higher
• Why Redbubble, Kogan, Marley Spoon and 1 other ASX share are surging
• Temple & Webster (ASX:TPW) share price barnstorms back with 11% rise
• Here’s how Adore Beauty (ASX:ABY) and these new IPOs have fared since listing

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 Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia has recommended Kogan.com ltd and Temple & Webster Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Is the Adore Beauty (ASX:ABY) share price in the buy zone? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/31YdZgC

At present, the base interest rates on savings accounts from Commonwealth Bank of Australia (ASX: CBA) and other banks are as low as 0.05%.

This means that even if you had $1 million dollars sitting in one of these accounts, you would only be receiving $5,000 of interest each year.

In light of this, I continue to believe savers would be better putting their money to work in the share market, rather than gaining such paltry interest.

Two dividend shares that I believe could offer both generous dividends and solid returns over the coming years are listed below. Here’s why I would buy them:

Accent Group Ltd (ASX: AX1)

I think Accent Group would be a great option for income investors. It is a footwear-focused retailer which owns retail store brands such as HYPE DC, Platypus, The Athlete’s Foot and Sneaker Lab. It also has a number of licensing agreements for the local market with footwear giants such as Skechers, Timberland, and Vans.

It has been thanks largely to its in-demand brands and its growing online business that Accent has continued its positive form in 2020 despite the pandemic. For example, in FY 2020, the company posted a 7.5% increase in net profit after tax to $58 million. Pleasingly, I believe there’s still a lot more to come from Accent over the coming years. This is due to its expansion plans, strong online presence, and its focus on active and casual wear.

I’m expecting the company to pay a 9 cents per share fully franked dividend in FY 2021. Based on the current Accent share price, this means investors will receive a 5.4% dividend yield.

National Storage REIT (ASX: NSR)

Another option I think income investors ought to consider buying is this self-storage operator. I believe National Storage could be a great long term pick due to its strong market position and growth through acquisition strategy in a highly fragmented industry.

As with Accent Group, National Storage was a positive performer in FY 2020 despite the disruption caused by the pandemic. It posted a 9% increase in underlying earnings to $67.7 million over the 12 months.

And while management has warned that its earnings could be flat in FY 2021, I expect it to rebound in FY 2022. Especially if the housing market bounces back as many are predicting. Housing activity is a key driver of demand for its services, so a booming market would only be good news for National Storage. This should be supported by its aforementioned growth through acquisition strategy and its exposure to the ecommerce market. In respect to the latter, a growing number of small businesses are using its WiFi-enabled storage units to run their online operations. 

I’m forecasting a 7.6 cents per share distribution in FY 2021. Based on the current National Storage share price, this represents a generous 4.2% yield.

More reading

• Why Bendigo and Adelaide Bank, Mach7, National Storage, & Unibail-Rodamco-Westfield are dropping lower
• National Storage (ASX:NSR) share price lower following AGM update
• Buy these high yield ASX dividend shares to smash low interest rates
• 4 ASX shares to buy for a rare Christmas surprise
• These ASX dividend shares could be strong buys for income investors

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia has recommended Accent Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Forget savings accounts and buy these ASX dividend shares instead appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3oGRs1F

If you’re in the fortunate position of being in the process of constructing a $100,000 portfolio, you’ll no doubt be on the lookout for investment ideas.

To help you on your way, I have picked out a couple of shares which I think could be excellent options in November.

Here’s why I think investing some of these funds into these ASX shares would be a smart move:

CSL Limited (ASX: CSL)

The first share to consider buying with these funds is this biotherapeutics company. I think CSL can be a market beater over the long term thanks largely to its high quality portfolio of therapies. The development of therapies such as Privigen, Hizentra, Idelvion, and Afstyla have helped CSL become the global number one player in a plasma therapies industry worth a massive US$30 billion per year.

In addition to this, its growing portfolio of influenza vaccines means that its Seqirus business is now the number two player in the US$6 billion global influenza vaccines industry. A big positive here is that the COVID-19 pandemic looks set to drive strong demand for influenza vaccines in the coming years, which could see the size of the industry, and therefore Seqirus, grow meaningfully.

But it doesn’t stop there. Every year CSL is investing in the region of 10% to 11% of its sales revenue back into research and development activities. This means that in FY 2021 it will be investing close to US$1 billion into these activities. As you might expect, this has led to CSL having a development pipeline of highly promising therapies and vaccines. Many of which have the potential to generate billions of dollars of sales over the next decade. 

In light of the above, I believe CSL is in a great position to maintain its leadership position and continue delivering solid earnings growth over the 2020s and beyond. Overall, I feel this could make it one of the best buy and hold options on the Australian share market today.

Goodman Group (ASX: GMG)

Another option for investors to consider buying is Goodman Group. It is one of the world’s leading integrated commercial and industrial property companies with a world class property portfolio which has been expertly curated by management of the last decade.

Goodman’s portfolio comprises strategically located modern, high quality properties in key gateway cities around the world. Management notes that its properties have shortened the distance between businesses and consumers, which it feel this puts its customers ahead of the market. And judging by its customer base, it is hard to argue against this.

Among Goodman’s tenants you will find the likes Amazon, Booktopia, Coles Group Ltd (ASX: COL), DHL, Showpo, and Walmart. Given how the company is at the forefront of commercial property and embracing smart warehouses and robotics, I believe its properties will be in demand for a long time to come. I expect this to underpin solid earnings and dividend growth over the 2020s and beyond.

More reading

• Down 4% in 10 days: Is it time to buy ASX 200 shares?
• These beaten-up shares are about to pick up: Moody’s
• 3 of the best blue chip ASX shares to buy in November
• ASX 200 Weekly Wrap: ASX snaps winning streak… just
• Brokers name 3 ASX shares to buy right now

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 CSL Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Where to invest $100,000 into ASX shares in November appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3oKRm92

The stock market crash may have prompted some investors to doubt whether buying cheap stocks can improve their long-term financial prospects. After all, many companies face difficult outlooks, while risks such as coronavirus and political uncertainty in the US could weigh on the prospects for global equity markets.

However, the stock market’s past recoveries suggest that a turnaround will occur in the coming years. As such, now could be the right time to buy cheap shares that appear to be trading at a discount to their intrinsic values.

Past recoveries after a stock market crash

The 2020 stock market crash may have been faster than those experienced in previous years. However, it is by no means the first time that investors have faced severe declines in equity prices across a range of sectors. For example, the global financial crisis wiped over 50% off major indexes such as the FTSE 100 Index (FTSE: UKX) in 2008/09, while similar falls were present in the early 2000s as the dot com bubble burst.

Following those crises, the stock market recovered to produce new record highs. Therefore, buying cheap stocks after a downturn has generally proved to be a sound strategy for investors. Although when stocks are undervalued there are likely to be further risks ahead, adopting a long-term view regarding their prospects could allow you to benefit from a subsequent recovery. In doing so, you could obtain a rate of return that is ahead of that of the wider stock market.

Valuations do not always reflect a company’s quality

While some cheap stocks should be trading at low levels after the stock market crash, many others appear to be undervalued. Investor sentiment towards equities and especially some sectors that have difficult near-term outlooks is relatively weak at the present time. This may provide investors with an opportunity to exploit mispricings through buying those companies with sound financial positions and wide economic moats while they offer good value for money.

This plan may not lead to positive returns in the short run. Past recoveries have sometimes taken many years to come into effect. But by owning a diverse range of stocks now while they offer wide margins of safety, you could benefit from their rising valuations and improving performances as the world economy’s prospects gather pace.

Investing on a long-term basis

The stock market crash may allow investors to obtain a growth rate for their investments that is higher than that of the wider market. Since indexes such as the FTSE 100 and S&P 500 Index (SP: .INX) have delivered annualised total returns in the high single-digits in recent decades, this suggests that buying shares today could prove to be a very profitable move. In time, they could improve your financial prospects and increase your chances of enjoying greater financial freedom.

More reading

• Is the REA Group (ASX:REA) share price a buy?
• 2 ETFs to buy next week
• Reserve Bank tipped to cut rates to record lows next week
• I plan to invest heavily in ASX shares next week
• These were the worst performing shares on the ASX 200 last week

Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Stock market crash: can you get rich from buying cheap stocks in 2020? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/35Q7U6V

Is the REA Group Limited (ASX: REA) share price a buy? It just announced a major investment.

What was the investment?

REA Group announced that it’s going to take a controlling stake in Indian business Elara Technologies. It currently owns 13.5% of Elara and after the deal is done REA Group will hold more than half of the board seats and is expected to have a shareholding of between 47.2% to 61.1%.

The total cost of this transaction will be in the range US$50 million to US$70 million. It’ll paid with a mix of US$34.5 million of cash and the rest will be through the issue of new REA Group shares. It’s expected to be completed in the second quarter of FY21.

You may be wondering what Elara actually is.

It operates India’s fastest growing real estate business in terms of the audience with several brands like Housing.com, PropTiger.com and Makaan.com. REA Group pointed out that India has a trillion-dollar economy.

Despite COVID-19 impacts, it has kept increasing its market share with continuing customer growth.

Elara offers a full range of property services across digital advertising and transactions including personalised search, virtual viewing, site visits, home loans and post-sales services.

REA Group CEO Owen Wilson said that the country is forecast to deliver strong growth over the next decade and continues to rapidly adopt digital services. He also said: “With over 700 million internet users and roughly half a billion yet to come online, our increased investment in Elara will allow REA to be at the forefront of the considerable long-term opportunities within India, and the digitisation of the real estate sector.”

What will this do for REA Group?

The real estate portal business said that its FY21 revenue is expected to be boosted by A$15 million to A$20 million. So, it’s not that big at the moment considering REA Group’s total FY20 revenue was $820.3 million.

But India offers a tantalisingly big market in five or ten years from now for REA Grouo. Australia’s population is just over 25 million whereas India’s population is more than 1.35 billion. If many more users come online and do their real estate transactions through the internet then Elara could become a sizeable profit centre for REA Group.

REA Group has already captured a huge market share in Australia. It’s able to generate more revenue from each property advertisement by offering even better features for looking at properties and other services (like loans).

In India the company just needs to work on building its market share of property advertising.

For a long time I’ve been interested in REA Group because of its overseas investments in Asia and North America due to how large the total addressable markets are in those continents.

Is the REA Group share price a buy today?

The REA Group share price is around $118, even after a 3.7% decline on Friday. At that price it’s trading at 33x FY23’s estimated earnings.

That certainly isn’t cheap. But there are a few things to consider. Its domestic and overseas markets still have long growth runways, particularly in a place like India.

The global interest rates are very low. Australia’s interest rate is very low – this somewhat justifies the higher REA Group share price. The low interest rate should also be a tailwind for Australian house prices and allow REA Group to charge higher prices. Australian housing market activity is expected to come roaring back in 2021 as COVID-19 impacts lift.

REA Group shares aren’t at a mega cheap price, but I think the long term prospects are good enough to buy a parcel shares next week and buy more on price weakness.

More reading

• ASX 200 sinks 1.6%, ANZ (ASX:ANZ) reports FY20 result
• REA Group (ASX:REA) share price in focus amid acquisition news
• ASX 200 Weekly Wrap: ASX snaps winning streak… just
• 5 top ASX shares to buy with $5,000
• 3 brilliant ASX growth shares to buy

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Is the REA Group (ASX:REA) share price a buy? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/35QxPM0

I think that there are some exchange-traded funds (ETFs) that are always worth buying.

The US election is nearly here. It may throw up some volatility. If markets do go through a bit of a rough patch then it could be worth buying during that weakness.

Here are two ETFs I’d consider buying next week:

Betashares Global Quality Leaders ETF (ASX: QLTY)

I think that quality businesses will be able to prosper in good times and tougher times. We’ve seen that strength with the short-term performance of the ETF. Over the past six months it has delivered a net return of 12.5% and over the past year it has delivered a net return of 17.8%. Those are solid numbers despite all of the COVID-19 impacts.

Businesses that display good financial characteristics are worth owning. A portfolio of 150 quality businesses could be a great investment during volatile times.

To make it into this ETF a business must score well on four factors: return on equity (ROE), debt to capital, cash flow generation ability and earnings stability.

There are plenty of recognisable names in its top holdings like Facebook, Nike, Nvidia, Apple, Alphabet (Google), Adobe, Johnson & Johnson, 3M, L’Oreal, Cisco, Intel, Visa and Nintendo.

Of the 150 businesses that it owns, almost 60% of those businesses come from either the IT or healthcare sector. I think that’s attractive because those two industries can provide consistent growth – they aren’t really cyclical.

As a group, it’s not a surprise to see that they are delivering solid returns. The ETF has performed well since inception in November 2018 – it has delivered an average return per annum of 19.6%. I’m not sure that the long-term future returns will be around 20% per annum, but I think it has a good chance of outperforming the overall global share market. 

Not only are the businesses high-quality, but the ETF is actually quite cheap with an annual management fee of just 0.35% per annum. That’s a lot cheaper than what you’d probably pay to an active fund manager to create a similar quality portfolio.

Betashares Nasdaq 100 ETF (ASX: NDQ)

If there is a bit of a selloff with the US share market then I think this ETF could be one of the best to buy.

The idea of this investment is to give investors exposure to 100 of the biggest businesses on the NASDAQ, which is a stock exchange in the United States.

Most of the large US tech shares are listed on the NASDAQ. So with this ETF you’re getting exposure to some of the world’s best technology businesses. Its top 10 holdings are a who’s who of the US tech sector: Apple, Amazon, Microsoft, Facebook, Alphabet, Tesla, Nvidia, PayPal, Netflix and Adobe.

Individual businesses within this ETF may not always be as strong as they currently are, but I think collectively the ‘NASDAQ 100’ – whichever companies make up that list in the future – will be a formidable cluster of (mostly) tech companies that can keep on delivering strong returns for shareholders.

Just think how much of our lives is spent using a service provided by Apple, Microsoft, Facebook, Netflix or Google. Consider all of the new services that may grow into big businesses from one of these companies: Apple TV, VR, automated cars, AI and so on. There is still a lot of potential growth. 

The returns of this ETF have been incredible. The biggest businesses just keep on delivering, unlike the ASX where the big banks have been largely disappointing over the past decade.

This ETF has returned 39% over the past year and it has delivered average returns per annum of 21.4% since inception in May 2015. Those returns are after the 0.48% per annum fee charged by BetaShares.

I think both of these ETFs could make great long-term buys if the market drops next week.

More reading

• I plan to invest heavily in ASX shares next week
• This market dip is the perfect time to buy these 2 forever shares
• What do you do when your ASX 200 shares are falling?
• 2 fantastic international ETFs that ASX investors can buy today
• I’d buy these 2 ETFs for dividends and growth

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. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 2 ETFs to buy next week appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2HPVjsz

Next week the Reserve Bank will meet to discuss the cash rate once again.

According to an economic note out of Westpac Banking Corp (ASX: WBC), its team are confident a rate cut is coming.

However, rather than going to zero, Westpac believes the central bank will take rates down from 0.25% to 0.1%.

Westpac’s Chief Economist, Bill Evans, commented: “As we indicated in September, we expect the RBA to lower rates, cutting both the cash rate target and the 3 year government bond target from 0.25% to 0.10%. In addition, the Bank will announce an expanded bond buying program, QE, with the aim of lowering rates across the curve, including 5 years to 10 years.”

After which, the bank is forecasting that rates will remain on hold at the record low of 0.1% until at least December 2022. That’s over two years with rates at these ultra-low levels.

What about the future?

Unfortunately for savers and income investors, a rebound to “normal” levels of 2% to 3% is unlikely to be swift. I suspect it could be 2025 or 2026 when rates return to these levels again. And that’s on the assumption that there are no economic crises between now and then.

In light of this, I think it’s best to accept that savings accounts and term deposits will not be providing a liveable source of income for a long time to come.

But don’t worry, because the Australian share market is here to save the day with its large number of dividend shares which offer vastly superior yields.

Two dividend shares that I think would be great options for income investors right now are Coles Group Ltd (ASX: COL) and Telstra Corporation Ltd (ASX: TLS).

I like both companies due to their strong market positions, defensive qualities, and generous dividend yields. The latter is especially the case for Telstra, which is aiming to pay 16 cents per share to shareholders this financial year. Based on the latest Telstra share price, this equates to a fully franked ~6% dividend yield.

More reading

• Is the Coles (ASX:COL) share price in the buy zone?
• RBA will cut rates Tuesday, say 67% of experts
• How did the WAAAX shares perform in the last quarter?
• Why I think now’s the time to buy bank stocks after ANZ Bank’s (ASX:ANZ) shock results
• 5 ASX 200 broker updates after quarterly earnings season

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Reserve Bank tipped to cut rates to record lows next week appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3eavEXc

Next week could prove to be pretty volatile. I plan to invest in ASX shares next week if share prices do go lower.

Why I’m planning to invest

I invest some money into shares every single month. That’s not going to change in November.

But this November is different to a normal November with the US election contest between Donald Trump and Joe Biden. There’s also a rising wave of COVID-19 cases in the northern hemisphere. 

Will Trump manage to pull off an even bigger surprise? Will the Democrats manage to pull off a clean sweep and get all the senators they need?

If you listen to each side, they accuse the other of being about to turn the country upside down.

Elections usually do make a bit of volatility. Just look at what happened in the run up to the Australian election last year. Can you believe that was just last year? A global pandemic and severe bushfires have distorted my sense of time.

I think ASX shares would be a great place to invest if the market does fall. The actual profit of Australian businesses isn’t going to be as affected that much by what happens in an American election.

If you have a chance to invest in a business at a lower price, I think it makes sense to invest. As buyers of shares, the main thing that determines our returns is the price we pay for the investment to begin with. Lower prices are obviously better. We just don’t know when those lower prices are going to happen.

Timing the market by waiting years for a crash doesn’t make a lot of sense, particularly when you’re missing out on a lot of dividend payments. But I personally believe that next week there could be some volatility if the election result is contested. There could also be volatility in a scenario where Biden wins but the Democrats don’t secure a full sweep.

What ASX shares I’m thinking about

I’d prefer to buy quality ASX shares. Sometimes a company’s share price can fall a lot further than the underlying value of its business. That’s what I saw during the COVID-19 crash in March.

I’ve got my eyes on businesses like Altium Limited (ASX: ALU), Pro Medicus Ltd (ASX: PME), Redbubble Ltd (ASX: RBL), Pushpay Holdings Ltd (ASX: PPH) and A2 Milk Company Ltd (ASX: A2M).

There are also a number of portfolio-based businesses that I think could be good investments if their portfolios fall in value, or a discount to the net asset value (NAV) opens up or widens. I’ve got my eyes on ideas like Magellan Global Trust (ASX: MGG), Magellan High Conviction Trust (ASX: MHH), iShares S&P 500 (ASX: IVV) and Betashares Nasdaq 100 ETF (ASX: NDQ).

I’m bullish about the long-term

I believe that if there’s any decline in the market next week that it will just be temporary.

Over the long-term the ASX share market has continued to climb higher, particularly when you add in dividends. A COVID-19 vaccine is looking increasingly likely next year with so many candidates being worked on at the same time.

I’m no vaccine expert, but the Oxford University – Astrazeneca vaccine seems to be making good progress. That’s why CSL Limited (ASX: CSL) has been tasked with manufacturing the vaccine if it proves to be safe and effective.

The prospect of lower share prices excites me rather than scares me. March 2020 was a unique opportunity to buy shares – November could be another month to buy shares at a cheaper price. Even if prices don’t fall, I still plan to invest in great ASX shares.

More reading

• 3 ASX 200 shares that every investor should own
• How did the WAAAX shares perform in the last quarter?
• 3 outstanding ASX growth shares to buy after the market selloff
• 3 ASX shares you’ll regret not buying during this correction
• 3 great ASX growth shares to buy in November

Tristan Harrison owns shares of Altium and Magellan Global Trust. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX and BETANASDAQ ETF UNITS. and has recommended Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended A2 Milk, Altium and Pro Medicus. The Motley Fool Australia has recommended PUSHPAY FPO NZX and BETANASDAQ ETF UNITS.. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post I plan to invest heavily in ASX shares next week appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/34JJBYY