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When it comes to investing in ASX shares, the dollar-cost averaging strategy is one that works well for many investors.

The point of this strategy is to take the anxiety of trying to time the market out of the equation. We know that markets tend to rise over time, as illustrated below:

Thus, if you consistently put your extra cash into an index fund at set intervals, you will be able to harness this compounding phenomenon without too much worry.

Sure, you won’t be ‘buying low and selling high’ like we’re all told to do. But behavioural economics tells us that we’re usually pretty bad at doing this anyway, so why bother with all of that stress?

So if you steadily drip-feed a $400-a-month investment into the markets using a dollar-cost averaging strategy, how long will it take to get to a million-dollar portfolio?

Well, $400 a month is roughly $100 a week, or $4,800 a year.

How far will investing $400 a month into ASX shares get you?

Let’s say we start with a $4,800 lump sum after a year of hard saving and go from there. So if you just put the cash under the mattress, you’d have $48,000 after a further nine years.

But say we invested that money into an ASX index fund instead. The SPDR AS&P/ASX 200 Fund (ASX: STW) is one of the oldest index funds on the ASX.

It has been around since 2001 and, over this period, has returned an average of 8.01% per annum. That assumes any dividends received are reinvested, of course.

At that rate of return, our $4,800 per year investment would have turned into $82,459 after a decade. That’s close to double what we would have had if we left the cash under the mattress.

But how long would it take to get to the magic mil?

Well, if an investor consistently got that 8.01% return every year, and kept investing $400 per month, said investor would be a millionaire after 34 years.

Now that’s a long time, to be sure. But it does mean that someone who got started investing when they were 18 with just $400 a month could reach million-dollar portfolio status by the time they hit 52.

If a lucky couple shacks up at 18 and both manage to execute this strategy, that could be a very early retirement on the cards.

Like all good investment strategies, this is not a get-rich-quick kind of plan. But it does show how investing in shares can make a meaningful difference to one’s wealth (and, potentially, retirement) if applied consistently.

 

The post I’d drip-feed $400 a month into ASX shares to try for a million appeared first on The Motley Fool Australia.

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More reading

• Want to invest successfully? You need to do this with your dividends
• Does the Vanguard Australian Shares ETF’s unique structure deliver better returns than the ASX 200?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a decent gain. At the time of writing, the benchmark index is up 0.25% to 7,437 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are rising:

Challenger Ltd (ASX: CGF)

The Challenger share price is up 5% to $7.65. Investors have been buying this annuities company’s shares following the release of its half year results. Challenger reported a 5% increase in normalised profit before tax to $250 million. This allowed the company to increase its interim dividend by 4% to 12 cents per share.

SG Fleet Group Ltd (ASX: SGF)

The SG Fleet share price is up 10% to $2.29. This morning, this fleet management company reported a 16% lift in revenue to $178.4 million and a 41% jump in half year profit to $41.9 million. Management commented: “We have demonstrated the strength of our competitive position and our ability to turn the steady stream of new business opportunities into further customers wins and vehicle orders.”

Sims Ltd (ASX: SGM)

The Sims share price is up 8% to $15.91. The catalyst for this has been the release of the scrap metal company’s half year results. Sims reported a 10% decline in revenue and a whopping 80% decline in underlying net profit after tax. However, investors appear to have been expecting even worse.

Universal Store Holdings Ltd (ASX: UNI)

The Universal Store share price is up 5% to $5.69. This appears to have been driven by a bullish broker note out of Citi. According to the note, the broker has upgraded this retailer’s shares to a buy rating with a $6.00 price target. Citi believes consensus estimates are too low.

The post Why Challenger, SG Fleet, Sims, and Universal Store shares are rising appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ordinaries shares rocketing over 5% on strong earnings updates
• Challenger share price screams 7% higher on half-year results
• 3 ASX 200 shares just upgraded by brokers, one with 50% upside
• If I had a spare $1,000, here’s where I’d invest in the stock market now
• 2 ASX growth shares that also offer incredible dividends

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Challenger. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s been a rough couple of weeks for the Vanguard Australian Shares Index ETF (ASX: VAS). The ASX’s most popular exchange-traded fund (ETF) was asking more than $93.40 for a unit back at the start of February. 

But today, this index fund is going for $91.92 at the time of writing, down around 1.6% since 3 February. That tempers the strong start to the year that this Vanguard ETF had. Between 3 January and 3 February, Vanguard Australian Shares ETF units rose by an impressive 8.9%.

But this short-term pain could be worth it for the long-term returns that this ETF could offer.

Long-term gains for the Vanguard Australian Shares ETF?

An index fund like the Vanguard Australian Shares Index ETF is essentially a bet on the Australian economy. That’s because an index fund holds a broad collection of the largest shares in a share market.

That’s the only thing that determines which shares make the cut and which don’t. In this ETF’s case, the portfolio consists of the 300 largest publically-listed companies in Australia.

If an ASX share underperforms over time and loses value, it will eventually get kicked out of the index during a periodic rebalancing, and thus, the ETF, only to be replaced by a better-performing company. This way, the index fund ‘picks winners’ over time.

As such, buying into an index fund can be a great way to expose your wealth to the prosperity of the Australian economy, all while requiring very little effort on the investors’ own behalf.

The Australian economy has always risen over time. We produce more goods and services today than at any other time in history. Concurrently, our share market has never failed to exceed a previous all-time high, given enough time.

The S&P/ASX 200 Index (ASX: XJO) last all-time high was back in August 2021 – 7,632.5 points. As it stands today, we are still ‘only’ 2.5% away from this high watermark.

We see a similar pattern in the Vanguard Australian Shares ETF:

So the short-term pain we are seeing in both the Australian share market and the Vanguard Australian shares ETF over the past couple of weeks might actually be a good opportunity to lock in some long-term gains.

If markets keep to their historical tendencies and rise over time, then logic dictates that the lower one can buy into an index fund, the better off one will be.

The post Vanguard Australian Shares Index ETF: Short-term pain for long-term gains appeared first on The Motley Fool Australia.

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More reading

• How I’d generate a $30,000 retirement income from the Vanguard Australian Shares Index ETF
• 2 ASX stocks I’d buy in February for lifelong passive income
• How I’d invest $300 a month in ASX shares to target an extra income of $20,000 per year
• ASX shares: Is this my once-in-a-lifetime chance for mega returns?
• How to create a million-dollar ASX share portfolio in two decades

Motley Fool contributor Sebastian Bowen has positions in Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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1) The bear market in US stocks is over, according to Wells Fargo.

That’s the good news. The not-as-good news is that doesn’t mean we’re headed straight into a bull market, according to an article on MarketWatch. 

“The bear market is over, but it is not the great reflation,” said Wells Fargo equity analysts, led by Christopher Harvey, in a research note Monday. “We see neither a bull nor a bear market, just a market.”

Wells Fargo “envision a malaise, not a hard landing” for the economy. “However, this does not necessarily mean it is risk-on from here on out,” they cautioned. “A sustained re-pricing of risk is not supported by valuations or anemic economic growth expectations.”

The same could be said about the Australian stock market, especially after the ASX 200 rally to start the new year, the benchmark index up close to 6% so far in 2023.

Some of the big winners this year have been more speculative stocks, like Nuix Limited (ASX: NXL) and Appen Limited (ASX: APX). 

But yesterday they both came crashing back to earth.

The Nuix share price slumped 26% after the AFR reported corporate regulator ASIC is expected to dump Nuix when it chooses its software partner late next month, as concerns rise over the troubled tech stock’s cash burn and a wave of client defections.

The Appen share price plunged 15% after it said it expects to recognise a $204 million impairment charge relating to poor performance in its new markets division, excluding China.

Call it momentum trading, bottom fishing, fear of missing out (FOMO), or just plain gambling, but speculating on turnarounds for under-performing businesses often comes with a sting in the tail. 

2) Leading global fund manager Ophir characterised January’s stock market rally as a “dash for trash”, where low-quality stocks rallied hard.

Writing in its January letter to investors, Ophir said some stocks rallied despite no earnings news, and simply because of sentiment that inflation may be tamed, with the US market being led higher “by some of the lowest-quality, unprofitable and highly geared businesses”.

“We expect to underperform during a low-quality rally in shares. It is not something that we want to chase. Sticking to your knitting is crucial as an investor as there are constant temptations to stray into the latest flavour of the month market segment through fear of missing out (FOMO).”

Ophir remains cautious for the middle and latter parts of this year, saying…

• “Interest rate hikes in major economies will continue to eat into demand, and corporate earnings may have further to fall. The size of any drop in demand and earnings, though, is highly uncertain.”
• “Both a soft and hard landing are plausible outcomes.”
• “In our view, the probability of more significant earnings falls is still higher than usual.”

As for Ophir’s edge, in the medium to long term, earnings growth drives share prices.

“With enough time and patience, and with no key changes in our investment team and process, we remain confident we can keep picking a higher proportion of earnings ‘beats’ than the market, which we believe will help drive long-term outperformance of our funds.”

3) It can be a long and lonely time waiting for earnings growth to be recognised by the market, especially in the smaller and less liquid ASX stocks. 

In mid-2021, I bought shares in Duratec Limited (ASX: DUR), a leading Australian contractor providing assessment, protection, remediation, and refurbishment services to a broad range of assets and infrastructure. 

Whilst the company did endure some challenges imposed by COVID-19, it steadily and methodically grew revenue and its order book, the latter giving solid visibility into future earnings growth.

Yet the Duratec share price stagnated for 15 months. Doubts crept in. Boredom set in, and the temptation to sell and recycle the funds into something else. Was I missing something?

Then, somewhat suddenly, Duratec shares sprung to life.

A strategic acquisition, forecast FY23 revenue growth of 40%, and EBITDA growth of 73%, plus a string of contract wins has seen the Duratec share price jump to 77 cents, up 100% in the past six months. 

It’s a win for the maxim that earnings growth drives share prices, in the medium to long term. Trading at around 0.4 times sales and around 5.6 times EBITDA, I remain a happy holder.

4) It doesn’t always work out that well for my small and micro-cap portfolio.

I’m underwater on my Good Drinks Australia (ASX: GDA) holding, with the share price of one of the country’s largest independent brewers trading at close to a 52-week low.

This comes despite the company having posted first-half revenue growth of 80%, albeit EBITDA coming in flat at $6.1 million as the company continued to invest in marketing for growth. 

Giving hope for long-suffering shareholders like me is the Good Drinks Australia target of growing its earnings to $25 to $30 million by FY25. By comparison, the market capitalisation today is just $85 million. The upside potential looks attractive.

Before it gets there, however, the company itself recognises it will have to carefully navigate an environment of reduced discretionary spend across the liquor category over the next 18 months. 

In September last year, the Good Drinks Australia Board and senior management team spent $3.2 million buying shares in their own company, paying 75 cents per share. 

“This significant level of financial commitment by the Board and management team reflects a shared belief in the attractiveness of the Company’s valuation at these prices,” said Chairman Ian Olson. 

Today, the Good Drinks Australia share price languishes at just 66 cents. Should the company hit its FY25 EBITDA target, the GDA share price should indeed turn out to be attractive both at 66 cents and 75 cents. But it’s a competitive market, and premium-priced craft beer may struggle to sell once the “mortgage cliff” hits households. 

I continue to hold my GDA shares, may add, but will mostly just wait, and hope. 

5) The market is shooting first and asking questions later with Temple & Webster (ASX: TPW). The share price of the online furniture and homewares retailer is being taken to the cleaners, currently down 26.67% to $3.63.

Revenue for the first half declined 12% to $207 million, with the company reporting a rather skinny net profit after tax of just $3.9 million. That’s a lot of sales, logistics, marketing, and investments for a tiny return. Compounding things was a decline in active customers to 840,000.

For the first five weeks of the second half, Temple and Webster sales were down 7% over the prior corresponding period, although this has been blamed on strong sales a year earlier due to the omicron outbreak.

Looking ahead, Temple & Webster’s CEO, Mark Coulter says…

“Longer-term, ecommerce in the Australian furniture & homewares category remains highly under-penetrated, and we have a much larger addressable market to go after in our new target verticals.”

Retailing is tough. Competitive, cyclical, and with skinny margins. I’ll wish them the best from the sidelines, and wait for the headwinds to turn to tailwinds. It might take some time.

The post Dash for trash fades as earnings cliff looms for ASX shares, with the market shooting first and asking questions later appeared first on The Motley Fool Australia.

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More reading

• Appen shares dive again. Are they cheap enough to buy?
• Temple & Webster share price sinks 13% on half year results
• Looking for growth? 3 ASX shares experts rate as buys
• Why Appen, Lendlease, Nuix, and Star shares are sinking today
• Could 2023 be the year these ASX AI stocks come roaring back?

Motley Fool contributor Bruce Jackson has positions in Duratec and Good Drinks Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen and Temple & Webster Group. The Motley Fool Australia has recommended Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX lithium share Winsome Resources Ltd (ASX: WR1) is marching higher on Tuesday.

Again.

The lithium explorer was up more than 8% in earlier trading and remains up 4% at $2.08 per share, at the time of writing. That puts the Winsome Resources share price up an eye-popping 428% since this time last year.

Here’s what’s spurring investor interest today.

What did the ASX lithium share report?

The Winsome Resources share price is marching higher after the ASX lithium share announced another round of promising assay results from drilling at its Adina project in Quebec, Canada.

The company highlighted some of the impressive lithium mineralisation results including 1.28% lithium oxide (Li2O) over 93.5 metres from 3.0m, and 1.52% Li2O over 23.9m from 4.6m.

Amongst the exceptionally high-grade zones, one hole returned results of 4.19% Li2O over 4.1m from 73.1m.

Winsome has now received assays from six of the 32 drill holes completed to date. Results from the remaining 26 drill holes are pending. The miner said its expanded exploration program at Adina is well-funded following the capital raising earlier this month.

Commenting on the results sending the ASX lithium share higher today, managing director Chris Evans said:

These results are just as impressive as our initial assays from drill hole AD-22-005 and confirm the high-grade nature of the lithium mineralisation at the Adina Main Zone. They also give us encouragement for the numerous other intersections which are currently being logged, sampled, assayed and interpreted.

Winsome is also progressing towards a resource estimate at Adina.

“We look forward to further results delineating the high-grade zones of lithium mineralisation at Adina as well as building up the geological interpretation with the aim of starting resource estimation work later in the year,” Evans said.

Winsome Resources share price snapshot

As mentioned up top, the Winsome Resources share price, pictured below, has leapt a remarkable 428% over the past 12 months.

The ASX lithium share has continued to outperform in 2023, up 68% since the closing bell on 30 December.

The post Up 428% in a year, here’s why this ASX lithium share is gaining again on Tuesday appeared first on The Motley Fool Australia.

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More reading

• Why is ASX lithium stock Winsome Resources on ice?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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When it comes to dividends, one of my favourite options in the market right now is Accent Group Ltd (ASX: AX1).

It is the footwear and fashion retailer behind a collection of popular store brands.

Among its growing stable of brands are Glue Store, HypeDC, Platypus, Sneaker Lab, Stylerunner, and The Athlete’s Foot.

And while the retail sector is not an easy place to operate given the cost of living crisis, Accent is a bit of an exception. This is due to its focus on younger consumers which have less exposure to rising mortgage payments and more exposure to increases in the minimum wage.

In fact, Goldman Sachs estimates that its target demographic will have an additional $1 billion in spending capacity in 2023, which bodes well for Accent’s brands. It commented:

In aggregate, we believe this cohort has an additional ~A$1bn in spending capacity: the combination of minimum wage uplifts and limited inflationary pressures has resulted in an additional ~A$570-930 in annual spending capacity (per person) among the cohort of young adults who work and live at home.

But a positive outlook is nothing for income investors if the Accent dividend is on the slender side.

A growing ASX share with a big dividend yield

The good news is that the Accent dividend is expected to be on the larger side of town in FY 2023 and then grow from there.

For example, Goldman Sachs is forecasting a fully franked 12.2 cents per share dividend this year. Based on where this ASX share was trading at yesterday’s close, this equates to an almost 6% yield.

This means that if you invested $10,000 into Accent’s shares, you would generate approximately $600 in dividends over the next 12 months.

But it gets better! With Goldman Sachs forecasting sales growth of 12.5% per annum (and even stronger earnings growth) through to 2025, it is conceivable that Accent could pay a dividend of 16 cents per share in FY 2025. That would represent a yield of almost 8%, which would pay shareholders a further $800.

And if we assume average dividend growth of 5% per annum through to 2033 as the company expands its store network and grows its online business, Accent’s dividend would be nearing 24 cents per share a decade from now. This represents an 11.6% yield if bought at yesterday’s close price.

This means that if we were to add all those forecast dividends together, the total comes to almost $9,000. That would be a 90% return on your original investment in dividends alone and excludes any potential share price gains.

And while a lot can change in the space of 10 years and forecasts are not guarantees, I believe this is achievable and demonstrates why Accent could be a great ASX share to buy and hold for the next decade.

The post 6% dividend yield! An ASX share to buy in February and hold for 10 years appeared first on The Motley Fool Australia.

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More reading

• These are the growing ASX dividend shares to buy now: analysts
• Buy these ASX passive income shares with 5%+ yields today: experts
• Buy Pilbara Minerals and this ASX dividend share: experts
• 3 ASX All Ordinaries stocks hitting new 52-week highs today
• 7%+ dividend yield! I’d buy this ASX 300 share for passive income in 2023

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Flight Centre Travel Group Ltd (ASX: FLT) share price is once again having a rosy day so far this Tuesday. After yesterday’s pleasing and market-bucking performance, this ASX 200 travel share is once again in the green today.

At the time of writing, Flight Centre shares are up by 0.33% to $18.31 each. Perhaps investors have been buoyed by some heavy buying into the company this week.

Yesterday, we covered the emerging news that a monster trade had taken place with Flight Centre shares.

There were early indications that a massive block of 1.2 million shares had changed hands, which was worth around $22.1 million. In fact, 1.2 million shares are worth 0.7% of all the Flight Centre shares on the market, so this was a big move to see for the company.

The transaction took place at a share price of $18.45 each but for now, this is all we know.

Today, some more information has come to light about Flight Centre shares.

The company has just released some details about another dramatic transaction of Flight Centre shares. But this time, it’s a sell.

According to the release, investment bank and broker JP Morgan has sold more than two million Flight Centre shares.

This sale was reported as taking place on 9 February (last Thursday) and resulted in JP Morgan reducing its holdings from approximately 13.14 million shares down to 10.98 million shares.

That takes the broker’s voting power in the company down from 6.56% to 5.17%.

So there have certainly been some whales making some big moves when it comes to Flight Centre shares of late.

Flight Centre share price snapshot

The Flight Centre share price has had an incredibly strong start to the year. In 2023 so far, this ASX 200 travel share is now up a healthy 27.3%. Saying that though, the company still remains down by 9.6% over the past 12 months.

Factoring in the new shares issued during 2020, Flight Centre shares are also still down more than 70% from their pre-COVID highs of more than $61 each.

At the current Flight Centre share price, this ASX 200 travel share has a market capitalisation of $3.89 billion.

The post Are whales dipping in and out of this ASX 200 travel share? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares just upgraded by brokers, one with 50% upside
• Here are the top 10 ASX 200 shares today
• Someone just bought $22 million of Flight Centre shares. Here’s what we know
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Deadline coming: 3 ASX 200 shares to buy now before dividend payouts

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Those invested in CSL Limited (ASX: CSL) shares officially have another dividend coming their way, and this one’s a whopper.

The Biotechnology giant dropped its first-half earnings this morning, as The Motley Fool Australia reports.

Within them, it revealed a US$1.07 per share dividend – the largest interim dividend ever declared by the company.

The CSL share price is well and truly in the green right now, jumping 1.78% to trade at $310.43.

Here’s everything investors need to know about the S&P/ASX 200 Index (ASX: XJO) staple’s upcoming offering.

CSL bolsters interim dividend

CSL investors, rejoice! The company revealed a US$1.07 per share interim dividend this morning – a 2.9% increase on that of the prior comparable period.

It came on the back of a US$1.6 billion net profit after tax (NPAT) – an 8% year-on-year fall, driven by currency headwinds and costs related to its acquisition of Vifor Pharma.

Meanwhile, CSL posted US$7.2 billion of total revenue for the period – a 19% improvement.

The upcoming dividend represents around 32% of the company’s basic earnings per share (EPS) for the period, which came in at US$3.37 ­– marking a 12% year-on-year fall.

Investors eager for the upcoming payout might want to quell their excitement, however. CSL’s interim dividend won’t start hitting bank accounts until 5 April.

Leading up to that, the stock will trade ex-dividend on 9 March.

The official conversion rate to Australian Dollars will then be confirmed on 14 March. Right now, the company has pencilled in the payout to be worth around $1.55 Australian, according to its website.

The interim offering is unfranked, unlike CSL’s most recent final dividend.

CSL also reiterated its financial year 2023 guidance this morning. It now expects to post US$2.7 billion to US$2.8 billion of net profit after tax and amortisation.

CSL share price snapshot

Today’s gains included, the CSL share price has lifted 10% year to date. That’s compared to the ASX 200‘s 7% year to date rise.

The healthcare stock is also currently 27% higher than it was this time last year, while the index has gained 3%.

The post Everything you need to know about the boosted CSL dividend appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The iron ore price is currently US$126 per tonne after an 0.55% gain overnight.

However, the price is 13.4% lower than this time last year, according to Trading Economics data.

In March 2022, the iron ore price reached its highest level for the year at about US$160 per tonne.

Movements in the iron ore price have a direct impact on ASX mining share prices.

So, let’s see what CBA has to say about the commodity’s value in 2023.

What’s happening with the iron ore price in 2023?

The iron ore price rallied 10% in January after China reopened its economy. This prompted increased demand for steel as the manufacturing and construction sectors recommenced normal activity.

This was a continuation of a rally that began in November when China eased its COVID restrictions and then dumped its COVID-zero policy altogether in December.

The iron ore price rose from a low of about US$80 per tonne in November to a seven-month high of $130 per tonne on 30 January.

Chinese manufacturing is rebounding and the government is stimulating construction activity through liquidity injections and new credit lines for developers.

China’s reopening has lifted many ASX mining shares, particularly the iron ore pure-play Fortescue Metals Group Limited (ASX: FMG). The Fortescue share price is up 8.3% in the year to date.

Fellow ASX iron ore shares are also up.

The BHP Group Ltd (ASX: BHP) share price is up 5.8% in the year to date. The Rio Tinto Limited (ASX: RIO) share price is up 6.2%. Junior iron ore explorer Grange Resources Limited (ASX: GRR) is up 28%.

The iron ore price has come off a bit in February, with the value now up 3.3% over the past 30 days.

What is CBA’s prediction for the iron ore price?

According to reporting in The Australian, CBA analysts expect the iron ore price to fall to US$100 per tonne over the coming months. They reckon the recent rally is unsustainable.

CBA commodity strategist Vivek Dhar said he expects Chinese steel demand to continue to accelerate in 2023 but the risk of a property market downturn remains.

Dhar said:

It is still anticipated that steel demand from China’s property construction sector will contract notably again in 2023 and the extent of contraction is expected to be steep enough to bring down China’s total steel demand by up to 2 per cent in 2023.

Weaker Chinese steel demand should weigh on China’s steel output and iron ore consumption.

Dhar also expects a modest increase in seaborne iron ore supply during 2023. This will impact the supply and demand equation and potentially reduce the iron ore price as well.

Government expects higher exports but lower earnings

As we’ve previously reported, Australia’s three biggest miners — BHP, Rio Tinto and Fortescue — are ramping up production at the new mines they’ve built in recent years.

According to the Department of Industry, Science and Resources, Australian iron ore exports are forecast to increase by 2.5% in 2022–23 to 896 million tonnes, and by 2.7% to 920 million tonnes in 2023–24.

Despite this, the government expects lower earnings due to lower iron ore prices. Earnings are expected to fall from $133 billion in 2021–22 to $113 billion in 2022–23, and then to $95 billion in 2023–24.

In 2022, 82% of Australia’s iron ore export earnings came from China.

The post Here’s the iron ore price forecast for 2023: CBA appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in BHP Group, Commonwealth Bank Of Australia, and Fortescue Metals Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX gold share Falcon Metals Ltd (ASX: FAL) is off to the races today.

Shares in the gold miner entered a trading halt on Friday afternoon, pending an announcement relating to exploration results at its Pyramid Hill Gold Project, located in Victoria.

Falcon exited that trading halt this morning. And as we head into the lunch hour, the ASX gold share is up a whopping 28.6%, having earlier posted gains just north of 30%.

Here’s what the gold miner announced.

What did the ASX gold share report?

The Falcon Metals share price is rocketing after the ASX gold share reported on promising assay results for 57 aircore holes at the Ironbark East Prospect, within its Pyramid Hill Gold Project.

According to the release, the results included multiple gold intercepts within weathered diorite, associated with quartz veining, arsenopyrite and pyrite.

Falcon Metals also noted that one of the aircore holes delivered the highest-grade gold intercept to date at Pyramid Hill. That hole returned results of 40 metres at 2.8 grams of gold per tonne from 50 metres, which included several one-metre intercepts above 10g/t Au.

Commenting on the results sending the ASX gold share surging today, managing director Tim Markwell said:

Intersecting high-grade mineralisation at Ironbark East over a 400 metres strike length is a great result and provides us with encouragement ahead of the commencement of our diamond drilling program later this month.

Following on the strong results, the explorer plans to kick off a diamond drill program at the site later this month.

“The results at Ironbark confirm the potential of diorite to host economic zones of mineralisation, especially with the intersection of a new zone at Ironbark Central announced earlier this month,” Markwell said.

“Our success to date gives us the confidence to further ramp up our activity at Pyramid Hill.”

Aircore drilling is continuing at Ironbark East, with two rigs testing the strike extent of the mineralised trend.

Falcon Metals share price snapshot

The Falcon Metals share price declined for much of the past 12 months.

As you can see below, with today’s big leap factored in, the ASX gold share is now trading right about where it commenced 2023.

The post Guess which ASX gold share just surged 30% on a new discovery appeared first on The Motley Fool Australia.

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More reading

• Here’s the iron ore price forecast for 2023: CBA
• 3 ASX All Ordinaries shares rocketing over 5% on strong earnings updates
• Own Rio Tinto shares? Here’s what the market is expecting from its FY 2022 results
• Appen shares dive again. Are they cheap enough to buy?
• Breville share price tumbles 4% as revenue growth slows

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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