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The national housing market is more fractured than it has probably ever been. Sydney rents have recently endured their steepest decline, although this likely won’t last. Meanwhile, the Perth rental market is again booming. In fact, the number of homes and units for rent has fallen to the lowest figure since the peak of the resources boom in 2012. Moreover, the Real Estate Institute of WA has revealed a housing boom with properties selling in less than a fortnight despite the pandemic. 

This is largely due to the number of West Australian expats who have returned home during the lockdowns. This is another area where WA differs from the rest of Australia. The very high mining content of its economy creates an international pull for WA business professionals across the world. Therefore the market was caught off guard when everyone came home at once and decided to stay.

Moreover, in the west, there is plenty of room, so people tend to want houses more than apartments. So the demand for properties to rent or buy is focused largely on detached or semi detached housing.

How big is the housing boom?

Despite all of the factors contributing to the WA housing boom, it is still a small market. I believe the boom is likely to have an impact on housing developers like Stockland Corporation Ltd (ASX: SGP), and Mirvac Group (ASX: MGR). However, these companies only have a portion of their portfolios in WA. Another housing company Ingenia Communities Group (ASX: INA) also holds a lot of rental stock in WA.

On the financial side, non-bank lender Resimac Group Ltd (ASX: RMC) has a corporate office in Perth. In addition, this company’s West Australian loan book stood at just under $1 billion in its FY20 annual report.

An effortless way to profit?

Peet Limited (ASX: PPC) develops properties nationally, but has 37.3% of its ongoing projects in Perth. Of all ASX shares, I believe Peet is probably the best positioned to capitalise on the WA housing boom. In addition, this small cap ASX share is also the largest, pure-play residential developer in Australia. The company had a difficult year due to COVID-19, yet still managed to increase sales by 43%. Along with a high 42% growth in the number of contracts in hand, the company also stands to gain from changes to lending laws. 

In a sign of increased productivity, Peet has approximately 70% of its entire land bank currently in development. Moreover, there is a continued focus on overhead management and other operational efficiencies.

More reading

• Look through short-term unpredictability for long-term ASX share price gains
• Why you may not need ASX REITs for dividends
• Why this Federal Budget is good for many ASX shares
• Own a slice of this fast-changing lending market
• ASX 200 down 0.2%: Northern Star & Saracen announce mega merger, IAG settles class action

Motley Fool contributor Daryl Mather 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.

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After surging to a 52-week high of $5.70 by late September, shares in ASX biotechnology company Mesoblast Limited (ASX: MSB) have come crashing back down to earth this month. The company has shed close to 45% of its market cap in the last few weeks, after receiving an underwhelming response from the US Federal Drugs Administration (FDA) concerning its flagship treatment, remestemcel-L, marketed under the brand name RYONCIL. As of Friday afternoon, Mesoblast shares were trading at just $3.11.

The funny thing is that this has all happened before. Back in August, the Mesoblast share price plunged almost 40% after nervous investors sparked a sell-off, fearing a negative outcome from a meeting between Mesoblast and the Oncologic Drugs Advisory Committee (ODAC), an independent panel that advises the FDA. In that instance, the committee voted overwhelmingly that the available data supported the efficacy of RYONCIL in paediatric patients. Once the market learned of the positive outcome, the Mesoblast share price rebounded just as swiftly.

This time around, things haven’t worked out so well for Mesoblast. So, what is actually happening here?

Despite the advice from ODAC, the FDA stated that it would like Mesoblast to conduct at least one more study to prove the effectiveness of RYONCIL. This comes as a pretty heavy blow to Mesoblast, as the company had already been making preparations to launch RYONCIL in the US. These plans will now all need to be put on hold while Mesoblast conducts the additional study – this means potentially significant delays and possibly significant investment.

No wonder the market reacted with shock and investors decided to dump their shares.

But it’s also bad news for patients. RYONCIL is designed to treat various inflammatory diseases including chronic heart failure and graft versus host disease (GvHD). GvHD is a potentially life-threatening complication that can occur in up to 50% of cancer patients who have received a bone marrow transplant. Currently, there is no approved treatment in the US for GvHD in children under 12.

Mesoblast is now applying for an accelerated approval with the FDA, which could mean RYONCIL would be approved, but under the condition that a further study is conducted. And meanwhile, it is conducting a phase 3 trial using RYONCIL as a treatment for sufferers of acute respiratory distress syndrome (ARDS) brought on by coronavirus.

In a press release, Mesoblast CEO Dr Silviu Itescu said that the company is “working tirelessly to bring remestemcel-L to patients with life-threatening inflammatory conditions, including SR-aGVHD [steroid-refractory acute graft versus host disease] and COVID-19 ARDS.”

Where to from here?

I have to admit to being quite bullish on Mesoblast, so it’s disappointing that they haven’t come away from their meeting with the FDA with a better outcome, particularly after ODAC voted so resoundingly in their favour. However, this does show the extreme volatility that can occur in the share prices of companies like Mesoblast, where a great deal of their commercial viability is dependent on a single event.

That being said, I think Mesoblast is still definitely worth keeping on your watch list as a possible future growth stock. Their technology is cutting edge and they still have significant cash on hand after a capital raise back in May. However, in the meantime, perhaps your money would be better invested in more mature and diversified healthcare companies like ResMed CDI (ASX: RMD) or CSL Limited (ASX: CSL).

More reading

• Got a spare $10,000 to invest? Smart investors should buy these ASX shares
• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• 3 ASX shares to hold forever
• These are the 10 most shorted shares on the ASX
• 3 core holdings for a $100,000 ASX portfolio

Rhys Brock 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 has recommended ResMed Inc. 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.

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This year will be a Christmas like no other. The year when “all of the ships come back to the shore“, as we sing in I Still Call Australia Home. A report from Credit Suisse Group analyst, Grant Saligari, predicts the nation’s population will swell by 4% at Christmas due to travel restrictions and the COVID-19 pandemic. In other words, an extra million people will be in Australia this Christmas, a phenomenon that I believe is very important for anyone considering which ASX shares to buy now. 

Not only have scores of us returned home from expat jobs and international lives, many more simply cannot travel over Christmas. In my home state of Western Australia, we are already feeling the impact of this as rents rise back to boom time prices. For investors, I believe the Christmas period presents a range of opportunities, but in particular, in the food and gift sectors.

Retail staples shares to buy

The first thing that comes to mind with more Australians within our borders is, of course, food. In this space, I think Coles Group Ltd (ASX: COL) is one of the better opportunities. Personally, I remain skeptical of Woolworths Group Ltd (ASX: WOW) shares after the company’s absurd decision to build the Masters franchise, and compete head to head with Bunnings. The Coles share price also has a lower price-to-earnings (P/E) ratio and higher trailing 12-month dividend yield than Woolies. Personally, I think Coles is the best choice of supermarket ASX shares to buy now. 

Having said that, I feel another good share to buy in the supermarket space is Metcash Limited (ASX: MTS). This retail conglomerate owns the franchised chain IGA, as well as other brands in liquor sales, hardware, and tool sales. However, the distributed ownership model makes campaigning and marketing difficult. Moreover, IGA in particular hasn’t nailed home delivery. However, it is still a respectable third force in supermarket retail, particularly in convenience shopping. 

Consumer discretionary shares

I think that one of the major discretionary shares to consider buying for the Christmas period is Super Retail Group Ltd (ASX: SUL). This company has a great collection of brands encompassing outdoor equipment, personal sports equipment and clothing, as well as the car service company – SuperCheap Auto. All good Christmas gift ideas for a swollen population. 

Some other consumer discretionary companies to watch include jewellery chain Michael Hill International Ltd (ASX: MHJ), fast fashion store Lovisa Holdings Ltd (ASX: LOV), and women’s retail clothing outlets City Chic Collective Ltd (ASX: CCX). All of these are likely to see increased sales volumes over the Christmas period resulting from both gift buying and personal shopping.

For me however, I have long been a fan of Accent Group Ltd (ASX: AX1), and I think this is a great discretionary retail ASX share to buy for Christmas. As a father of two teenage kids, let me assure you that kids love sneakers. Also, price doesn’t seem to faze them when it comes to writing up their Christmas lists. From the market low point on 23 March, the Accent Group share price has risen by 226.7%. It is currently selling at a P/E ratio of 18.4, and has a trailing 12-month dividend yield of 5.05%.

More reading

• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• Is it time to go all in on ASX shares?
• 3 core holdings for a $100,000 ASX portfolio
• These ASX dividend shares could be strong buys for income investors
• Where I’d invest $10,000 in ASX shares for growth

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths 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.

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One of the things I have learned over the years investing in ASX dividend shares is that this is not a spectator sport. In my view, investing for dividends requires regular analysis, review, and the willingness to make changes if required. For example, Telstra Corporation Ltd (ASX: TLS) was considered a rolled gold ASX dividend share for many years. And then one day, it wasn’t.

The same could be said for our large banks like Commonwealth Bank of Australia (ASX: CBA), right up until the regulator put a cap on how much banks could distribute to shareholders. Moreover, a myth of ASX dividend investing is that it applies mainly to mid cap shares or larger. I have always rejected this premise. While large caps are more secure, small cap shares often pay higher dividend yields.

Small cap ASX dividend shares

New Energy Solar Ltd (ASX: NEW) currently pays a trailing 12 month (TTM) unfranked dividend yield of 9.1%. This is an infrastructure trust that buys, builds, and operates solar farms in Australia and the United States. It continues to ride a wave of government enthusiasm and spending and has positioned itself as a high margin provider of electrical power. The company’s revenue stream is susceptible to changes in weather, yet it is currently priced at 39.4% less than its net asset value per share.

G8 Education Ltd (ASX: GEM) is an early learning and childcare company with assets predominantly in Australia, and some in Singapore. Over the past 10 years, the company has had a share price CAGR of 16.7%, enough to triple the initial investment in this time. Furthermore, it presently has a TTM dividend yield of 10.3%. As this is a 100% franked payment, it also carries a tax credit of 4.4%. Like New Energy, this company is also trading at a discount to its net tangible asset value of 42.9%.

Base Resources Limited (ASX: BSE) is an early stage, but producing, mineral sands company. At today’s price this company has a TTM dividend yield of 14%, which is very large. However, this year was the company’s maiden dividend payment. So there is some risk as to whether they will do so again. The company’s net profit after taxes (NPAT) for FY20 was $39.6 million. This was a slight reduction on 2019 due to reducing ore grades. Nevertheless, the company intends to produce 700,000 tonnes in FY21, an increase of 50.2%.

Foolish takeaway

There are a few things investors can take away from this article. First, an effective ASX dividend paying portfolio needs to be actively managed. Second, small caps often pay more per share than large caps. Nonetheless, they are considerably more risky. Third, the dividend yield itself must be considered along with an evaluation of company performance, future growth plans, and management skill. 

More reading

• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to buy next week
• How to make $50,000 of passive income with ASX dividends
• Aussie Broadband (ASX:ABB) share price rockets 122% following IPO

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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.

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Yet another technology company is floating on the ASX this week, taking advantage of a hungry market that just can’t get enough of the sector.

Shares for e-commerce site MyDeal.com.au Limited (ASX: MYD) will start trading on Thursday.

The initial public offering (IPO) price is $1 per share, giving MyDeal a market capitalisation of $258.8 million.

Founder and chief executive, Sean Senvirtne, told The Motley Fool it was a long journey to reach this milestone.

“The business is almost a decade in the making,” he said.

“We managed to build an e-commerce site with excess of $100 million of sales with very minimal capital raising to date.”

He’s right — MyDeal had only raised $5.1 million in equity funding before the initial public offer.

Tony Gandel, who is the son of AFR Rich List real estate developer, John Gandel, put in $5 million back in 2017 through his investment vehicle, Gandel Invest. 

Now, in just 3 years, that will turn into $51.4 million as the company lists on the ASX.

Senvirtne and his partner and chief product officer, Kate Dockery, will own 49% of the shares upon the float, worth $126.9 million.

Remember group buying?

Remember when ‘group buying’ was all the rage and it was meant to be the next dominant shopping trend? MyDeal started off in 2011 as a group buying site but has since pivoted several times to find its groove.

It had some good years selling pretty much everything but these days it’s focused on furniture and homewares.

The current model is that MyDeal acts as a pure marketplace between sellers and buyers, rather than warehousing and packing goods itself.

Share prices for similar e-tailers like Temple & Webster Group Ltd (ASX: TPW) and Kogan.com Ltd (ASX: KGN) have gone gangbusters during the tech boom this year.

In the 2020 financial year, MyDeal put through $103 million of gross transaction value, which was up 164.6% year on year. Its revenue was a fraction of that, raking in $15.8 million.

The company made a small net profit after tax of $850,000 statutory or $37,264 pro forma.

MyDeal’s ace up its sleeve

Senvirtne told The Motley Fool he has gun executives with excellent online retail pedigree steering the ship.

“Our chairman Paul Greenberg is a veteran in this space… When I was starting up he ran DealsDirect — one of the very first online retail stores [in Australia],” he said.

“Dean Ramler — he’s an investor and he’s our chief merchandising officer — he’s the guy who built Milan Direct back in the day, which was acquired by Temple & Webster.”

Even though competition is fierce in online retailing in Australia, Senvirtne reckons the country is “underpenetrated” in the furniture and homewares sector compared to the United Kingdom and the United States.

“If you look at our mattresses or bed frames, you see there are 400 or 500 different products from different sellers,” he said.

“In Australia, no one has been able to build a business to the level where we are — being able to offer 500 SKUs [per category].”

More reading

• How to make $50,000 of passive income with ASX dividends
• Should you stay invested in an ASX share after a strong run?
• Why Kogan (ASX:KGN) and this hot stock just hit record highs
• 3 hot ASX shares to buy when you’re young
• 3 unstoppable ASX shares to buy with $3,000

Tony Yoo 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.

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The Australian Pharmaceuticals Industries Ltd (ASX: API) share price will be on watch this morning following the company’s release of a trading update late Friday.

At the closing bell on Friday, which was prior to the announcement, the Australian Pharmaceuticals share price finished the day at $1.06, down 1.4%. A catalyst for the slight drop in the company’s shares could have been the broad sell-off in the market.

In comparison, the All Ordinaries Index (ASX: XAO) ended Friday’s session down 0.5% at 6,385 points.

Trading update

Friday evening, Australian Pharmaceuticals provided shareholders with an update in relation to its full-year results, and the impacts of COVID-19.

For the period ending 31 August, the company advised its underlying net profit after tax (NPAT) will be broadly in line with market expectations. Australian Pharmaceuticals is expecting to report an underlying NPAT in the range of $30 million to $31 million.

The company noted that during the second-half, significant improvements in key balance sheet metrics were made. These included net debt and cash conversion days.

In addition, Australian Pharmaceuticals also made the decision to downsize its Priceline store network (non-pharmacy stores). Management said the closure of 14 Priceline stores, among other restructuring costs, are an outcome of the long-term impacts of COVID-19.

After reviewing its balance sheet to determine its core assets in the post-pandemic world, the company made several adjustments. The Soul Pattinson Chemist brand has been written down to the carrying value of $37.5 million. The pre-tax reduction is a one-off, non-cash item.

With the permanent closure of 14 non-pharmacy Priceline stores, Australian Pharmaceuticals completed a detailed stock review and identified surplus inventory. The company will seek to use these items in a clearance pricing strategy, further reducing working capital costs. This will create an NPAT reduction of $5.5 million, and will be considered as a non-cash accounting adjustment.

The company will announce its full-year results to the market on 22 October.

What did the CEO say?

Australian Pharmaceuticals Industries CEO, Richard Vincent, spoke about the Victorian COVID-19 restrictions, and the anticipated demand when lockdown laws ease. He said:

We currently have 14 Clear Skincare clinics and 22 Priceline company-owned stores temporarily closed in Victoria. These will re-open when COVID-19 lockdown rules allow. Where we have re-opened Clear Skincare clinics after mandated shutdowns, pent-up demand has been significant, with comparative sales up 25% on pre COVID-19 levels, followed by a sustained uplift. Since the half year, a further eight clinics have been opened, with the pipeline for further openings remaining strong.

Furthermore, Mr Vincent touched on Priceline’s performance. He added:

Priceline company stores and Priceline Pharmacies are also trading strongly compared to the same period last year in those States where COVID-19 restrictions have been lifted. Priceline’s online sales reflect growth of more than 100%, albeit from a low but growing base.

About the API share price

The API share price has been on a bumpy road over the last five years. The company reached a multi-year high in April 2017, but has been on a downhill trend ever since. With a market capitalisation of $522 million, the Australian Pharmaceuticals share price could be considered as modest with a price-to-earnings (P/E) ratio of 10.

More reading

• 2 ASX dividend shares raising their dividends like clockwork

Motley Fool contributor Aaron Teboneras 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.

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Investors have a lot more reason to be feeling confident about the ASX bull market as our central bank has given the green light on risk-taking.

The Reserve Bank of Australia (RBA) governor Philip Lowe has effectively given banks permission to opened the lending floodgates to home buyers in a speech last week.

The RBA also isn’t worried about property bubbles as it regards the COVID‐19 recession a bigger threat to our economy.

Industry watches are expecting mortgage lenders to step up their war for market share as a result, reported the Australian Financial Review.

RBA gives green light for bull market run

Dr Lowe’s speech may have been aimed at the property market. But make no mistake, this carries implications for ASX investors.

You only need to examine his commentary that interest rates will stay low for at least three more years to understand the significance.

Our central bank head won’t lift interest rates until actual inflation, not forecast inflation, reaches the RBA’s target of 2% to 3%.

Shock change to inflation targeting

This may sound like a very subtle difference, but it isn’t. The RBA is effectively saying it doesn’t mind inflation jumping above its target band because that is what will likely happen.

Monetary policy (meaning interest rates) is a blunt instrument as the impact of a rate change won’t be felt in the real economy for some time.

If the RBA waits till inflation actually hits 2-3% before lifting acting, there is a very good chance inflation will overshoot before the impact of higher interest rates kick in.

Monetary policy on steroids?

Concern about runaway inflation is one of the things that would normally hold back a central bank. With this caveat removed, the RBA is putting the pedal to the metal as it prepares to cut rates again next month.

The cut to the official cash rate to 0.1% will supplement a step-up in the RBA’s quantitative easing program of buying bonds.

If you remember, its the flood of liquidity (cheap money) that helped trigger a 36% rebound in the S&P/ASX 200 Index (Index:^AXJO) from its COVID low in March.

Be ready to pedal on a fresh wave of liquidity that’s unrestrained from worries about asset bubbles or inflation risks.

Inflation could be bigger risk than you’d think

But things could turn ugly quicker than you’d think even though no one here is worried about inflation.

Some economists are starting to wake up to the inflation risks facing the US as the property market heats up and the US dollar stays on the back foot. It won’t take long for US inflation to reach our shores given how interconnected global financial markets are.

Foolish Takeaway

The problem with inflation is that once that genie pops out of the bottle, getting it back in is a difficult task.

Right now though, inflation is seen as the lesser of all COVID evils. We might as well climb on our surf boards and enjoy the bull market ride fellow Fools.

We’ll worry about paying the piper later.

More reading

• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 next week
• How to turn $20k in ASX shares into $1 million in 30 years
• These were the worst performing shares on the ASX 200 last week

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

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.

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Buying the best shares currently available could prove to be a sound move. They may be better able to withstand a period of weak economic growth. They could also deliver higher returns as the world economy’s performance improves.

Therefore, spending time analysing industry growth prospects, assessing company reports and valuing businesses could be a sound move. It may mean that you purchase the most attractive investment opportunities that can make a major impact on your long-term financial prospects.

Analysing industry prospects to find the best shares

The best shares to buy today may not necessarily have the brightest near-term outlooks. For example, they may face a tough set of trading conditions as a result of downbeat consumer sentiment or disruption caused by lockdown measures implemented due to coronavirus.

However, they could have improving outlooks over the long run that make them attractive investment opportunities. As such, analysing the long-term prospects for a wide range of sectors may help you to deduce where the best buying opportunities are located. This may lead you to focus your efforts on a smaller number of industries where a mix of short-term uncertainty and long-term growth potential may provide a larger number of attractive stocks to buy today.

Using annual reports to assess a company’s prospects

As well as analysing industries to find the best shares, assessing annual reports and recent company updates could be a shrewd move. They provide detailed information on the financial position of a business. This could be very useful in the current economic climate, since slowing sales growth may mean that businesses with solid balance sheets have a higher chance of surviving a difficult set of trading conditions.

Furthermore, annual reports provide information regarding a company’s strategy. This may help you to determine whether it has the right plan to adapt to a fast-changing economic environment, or if its business model is outdated. Through reading management commentary and viewpoints, you can build a picture as to how strong a company’s position may be over the long run. This may have a significant impact on its financial performance and investment gains.

Valuing businesses

Of course, buying the best shares at the wrong price may not lead to impressive returns for investors. Therefore, it is important to try to estimate the value of a company prior to purchase. Should it be trading at a higher price than it is worth, it may be a good idea to look elsewhere or wait until it trades at a lower price.

Fortunately for new investors, many high-quality companies have not yet recovered from the stock market crash. Therefore, good value stocks are likely to be on offer at the present time. They could have a positive impact on your financial prospects in the coming years.

 

More reading

• Got a spare $10,000 to invest? Smart investors should buy these ASX shares
• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• 3 ASX shares to hold forever
• These are the 10 most shorted shares on the ASX
• Beat the low interest rate with these ASX dividend shares

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.

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If you’re lucky enough to have a spare $10,000 in your savings account and no near term plans for it, I would suggest you consider putting it to work in the share market.

After all, the potential returns on offer are vastly superior to the interest rates most bank accounts offer right now.

But where should you invest these funds? My money would be on one of these high quality ASX shares:

Appen Ltd (ASX: APX)

I think this global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence (AI) could be a great option for a $10,000 investment. In a presentation last year, management noted that the AI market is expected grow to be worth up to US$191 billion by 2025. Approximately 10% of this market spend is expected to relate to the data labelling which Appen is involved in. Due to its industry leading position, I believe the company is well-positioned to capture a growing slice of this massive market in the coming years. This should underpin strong earnings growth for the foreseeable future.

Cochlear Limited (ASX: COH)

Another option for a $10,000 investment is Cochlear. It is a leading global hearing solutions company. I believe it has outstanding long term growth potential due to the ageing population tailwind. As people get older their hearing will tent to fade. So, with the over-65 population expected to increase significantly globally over the next couple of decades, I believe Cochlear is well-positioned to profit due to the quality of its product portfolio, investments in R&D, and global distribution network.

ResMed Inc (ASX: RMD)

A final option to consider investing $10,000 into is ResMed. I continue to believe the sleep treatment-focused medical device company’s shares could be market beaters over the next decade. This is due to the quality of its portfolio of cloud-connected devices which care for people with sleep apnoea, chronic obstructive pulmonary disease (COPD), and other chronic diseases. It is worth noting that this is not a small market. Management estimates that there are 936 million people with sleep apnoea globally and over 380 million people who suffer from COPD. This provides ResMed with a significant runway for growth in the future.

More reading

• 5 things to watch on the ASX 200 on Monday
• 3 core holdings for a $100,000 ASX portfolio
• 5 things to watch on the ASX 200 next week
• 10 must-buy ASX shares to snap up before it’s too late
• How to make $50,000 of passive income with ASX dividends

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 Appen Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and ResMed Inc. 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.

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The S&P/ASX 200 Index (ASX: XJO) has just capped off another stunning week of gains that have helped it achieve a new post-crash high. Last week, the ASX 200 added another 1.2% on top of the previous week’s stupendous 5.37% gain, which pushed the index to new post-March highs. The ASX 200 closed at 6,176.8 points but reached as high as 6,230 points during the week.

Whilst we are still a long way from touching the 7,000-points-plus levels the ASX 200 was trading at back in pre-COVID February, it certainly was a good week to have an ASX share portfolio.

As seems usual these days, it was ASX tech shares leading the gains last week. The S&P/ASX All Technology Index (ASX: XTX) was up 3.7% for the week, helped by major constituent Afterpay Ltd (ASX: APT) printing yet another new all-time high of $98.68 on Wednesday. It looks like the countdown to a triple-digit Afterpay share price is nearing midnight. The Xero Limited (ASX: XRO) share price was also on fire last week and printed a new all-time high of its own at $119.88.

In a rare departure, ASX tech shares’ gains weren’t accompanied by their American counterparts. Most significantly, Apple Inc (NASDAQ: AAPL) was on the nose with investors after releasing details of its new iPhone 12 range. The ‘fresh design’ and the new handset’s 5G capability evidently didn’t impress investors, who sent Apple shares down more than 4% between Monday and Friday last week.

So what was the catalyst behind the week’s double-up gains? Two words: easy money.

RBA flags QE

On Thursday, Reserve Bank of Australia (RBA) Governor, Dr. Philip Lowe, told Australians that the RBA is now ‘considering’ further easing, which may include the purchase of longer-term bonds (such as 5 or 10-year bonds). Until now, the RBA has been intervening in the bond market, but in the purchasing of shorter-term bonds. But if the RBA does indeed expand this program, Australia will almost certainly be described as entering official quantitative easing territory.

Further RBA intervention into these markets is generally regarded as conducive to higher share prices. As such, I believe these comments were partly behind last week’s ASX 200 push higher. Dr Lowe’s comments did nothing to dampen speculation that the RBA is about to initiate a further reduction in the cash rate from 0.25% to 0.1%, which also likely helped.

It’s also worth mentioning the stunning initial public offering (IPO) of Aussie Broadband Ltd (ASX: ABB). The Aussie Broadband share price skyrocketed 90% on its first day on the ASX boards when it closed at $1.90 after listing at just $1 per share. It was even better intra-day too — at one point, the shares were up more than 122%.

How did the markets end the week?

The markets ended the week well, as we already discussed. But here’s the long version of the story. Monday saw a strong start to the week with a 0.5% gain, which was backed up with another 1% top-up on Tuesday. Wednesday saw this streak end with a 0.3% loss, but this was quickly forgotten on Thursday with a 0.5% gain on the back of the RBA’s comments. Friday saw another 0.54% cool-off, but it wasn’t enough to stop the ASX 200’s substantial gain for the week.

Meanwhile, the All Ordinaries Index (ASX: XAO) also had a strong week, starting at 6,312.85 points and finishing up at 6,385 points for a 1.1% gain for the week.

Which ASX 200 shares were the biggest winners and losers?

It’s gossip time (Fool style) now, where we look at the week’s biggest winners and losers. So put the kettle on and we’ll start with the losers first, as always.

More reading

• 3 ASX shares to hold forever
• These are the 10 most shorted shares on the ASX
• Is it time to go all in on ASX shares?
• Why HUB 24 (ASX:HUB) and these ASX shares are hitting new highs
• 5 things to watch on the ASX 200 on Monday

Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd., Link Administration Holdings Ltd, Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited, Super Retail Group Limited, Telstra Limited, and Webjet Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO, COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended Apple, Flight Centre Travel Group Limited, and Link Administration Holdings 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 ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high appeared first on Motley Fool Australia.

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