Tag: Motley Fool

Coles Group Ltd (ASX: COL) has been growing both its dividends and share price since it listed on the ASX in 2018. But is now a good time to snap up the S&P/ASX 200 Index (ASX: XJO) supermarket operator’s stock for passive income? Let’s take a look.

What kind of dividends can investors expect from Coles shares?

Coles shares are arguably a potential dividend winner by design. The company aims to deliver a dividend payout ratio of between 80% and 90%.

Thus, the company’s dividends will likely grow alongside its profits. And brokers are seemingly expectant.

Citi is forecasting Coles shares to offer investors 72 cents per share in financial year 2023. That’s tipped to grow to 77 cents per share in financial year 2024.

That’s slightly higher than Morgans’ outlook – 64 cents per share in financial year 2023 and 66 cents per share in financial year 2024.

For comparison, Coles shares provided 63 cents per share in financial year 2022 – a 3.3% increase on those of financial year 2021.

Potential risks

Of course, no investment is without risks – even those capable of creating passive income.

Coles will assumably only pay dividends if its profits increase. Thus, headwinds currently facing the company could dent its periodic offerings.

The supermarket giant previously noted the cycling of lockdowns in the first half of financial year 2022 could impact its upcoming earnings. Meanwhile, inflation was tipped to take a bite out of its bottom line this fiscal year.

Coles shares could be an ASX dividend buy

Speaking of inflation, while Coles shares are by no means immune to the cash eating measure, the supermarket operator is a discretionary retailer. Aussies can’t simply stop buying food when the cost-of-living rises.

That means its earnings are arguably defensive. Thus, I believe Coles shares could make a good passive income buy in the current economic environment. And I’m not alone in thinking so.

Both Morgans and Citi have equivalent buy ratings on the stock, with respective price targets of $19.50 and $18.90. That means Coles shares could offer up to 8% upside.

The post Does the Coles dividend forecast make it a great buy for income? appeared first on The Motley Fool Australia.

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More reading

• Here’s how I’d start building a second income this February, for $30 a week
• Should I buy Coles shares before this month’s ASX earnings update?
• Goldman reveals the ASX shares that could surprise to the upside (and downside) this reporting season
• ASX shares investors rejoice! RBA says inflation has now peaked
• ‘Attractive stock’: Fundie names one ASX share to buy, one to watch, one to avoid

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is back on form and is edging higher. At the time of writing, the benchmark index is up 0.1% to 7,546.2 points.

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

Beach Energy Ltd (ASX: BPT)

The Beach share price is up 2.5% to $1.58. This may have been driven by a broker note out of Macquarie. Its analysts have upgraded the energy producer’s shares to a neutral rating with a $1.50 price target. The broker was pleased with news that Webuild has been appointed to complete the Waitsia gas plant construction.

Medibank Private Ltd (ASX: MPL)

The Medibank share price is up 2% to $3.03. This morning, this private health insurer announced that it will increase its premiums by an average of 2.96% from April. This is the lowest increase in 22 years. Investors may believe this is a nice balance in the current environment. Medibank has also decided to defer this increase until the start of June.

Pushpay Holdings Ltd (ASX: PPH)

The Pushpay share price is up 2% to $1.20. Investors have been buying this donation technology provider’s shares after it reconfirmed and narrowed its FY 2023 guidance. Pushpay now expects underlying EBITDAF of US$55 million to US$57 million. This compares to its previous guidance of US$54 million to US$58 million.

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven Coal share price is up 5.5% to $8.93. This has been driven by a strong rise in coal prices overnight. According to CommSec, Coal Nymex futures rose 5.3% to US$157.00 a tonne. This news has given a number of other ASX coal shares a major boost today.

The post Why Beach Energy, Medibank, Pushpay, and Whitehaven Coal shares are rising appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• Why Beach, Newcrest, Patriot Battery Metals, and Warrego Energy shares are rising
• Top ASX value shares to buy in February 2023
• Did you buy $1,000 of Whitehaven shares 10 years ago? If so, here’s how much passive income you’ve received

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pushpay. The Motley Fool Australia has positions in and has recommended Pushpay. 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 stock market has had an incredible start to the 2023 calendar year. Rewind back to the start of January, and we’ll see the S&P/ASX 200 Index (ASX: XJO) was at 7,038.7 points.

But today, the ASX 200 is sitting at 7,541 points at the time of writing, a good 7.1% above where it began the year at. Historically speaking, this is an incredibly positive start to the trading year.

What’s funny is that the end of 2022 was dominated by investor pessimism. Predictions were abounding that 2023 would ‘inevitably’ see a recession.

Rising interest rates and high inflation would result in a hard landing for the US economy, and probably Australia’s too. Thus, shares were going to have a dreadful year.

Well, anyone who sold their shares on this pessimism would probably be feeling pretty silly right about now.

So that brings us to the question: will there be a stock market crash in 2023?

Is the stock market heading for an ASX 200 crash in 2023?

Well, I’ll keep this one simple: I have no idea.

There could be a recession in 2023, or there might not be.

The share market could crash if we have a recession, or it could go higher.

The economy could boom but shares go into a bear market.

All of these scenarios are possible.

But I don’t have a crystal ball. Even economists get these kinds of predictions wrong all of the time. And I’m not an economist.

So I’m not going to make any kind of predictions here today. And I’m certainly not basing my investing actions on what might happen to the stock market or the economy this year.

Instead, I’ll be trying to follow the advice of the legendary investor Warren Buffett.

Back in his 2012 letter to the shareholders of Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B), Buffett said this about trying to invest based on economic indicators:

Of course, the immediate future is uncertain; America has faced the unknown since 1776. It’s just that sometimes people focus on the myriad of uncertainties that always exist while at other times they ignore them (usually because the recent past has been uneventful)…

American business will do fine over time. And stocks will do well just as certainly, since their fate is tied to business performance. Periodic setbacks will occur, yes, but investors and managers are in a game that is heavily stacked in their favor.

The Dow Jones Industrials advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions. And don’t forget that shareholders received substantial dividends throughout the century as well.

Since the basic game is so favorable, Charlie [Munger] and I believe it’s a terrible mistake to try to dance in and out of it based upon the turn of tarot cards, the predictions of “experts”, or the ebb and flow of business activity. The risks of being out of the game are huge compared to the risks of being in it.

So instead of worrying about whether there’ll be a stock market crash in 2023 or not, I’m going to keep on doing what I’ve always tried to do: invest in the best ASX shares and exchange-traded funds (ETFs) as much as possible, at the best prices possible.

At the end of the day, nothing else really matters.

Sure, we’ll get the occasional stock market crash. But these crashes are just good opportunities to load up on our favourite shares and ETFs at even better prices.

Worrying about recessions, stock market crashes, and trying to time the market is a fool’s game (and not the good kind of Fool). I think we’re all better off playing Buffett’s game instead.

The post Will the stock market crash in 2023? appeared first on The Motley Fool Australia.

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More reading

• Better buy: Core Lithium vs Pilbara Minerals shares
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why is the ARB share price beating the ASX 200 today?

Motley Fool contributor Sebastian Bowen has positions in Berkshire Hathaway. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The last 12 months or so have been a wild ride for Lake Resource N.L. (ASX: LKE) and those invested in its shares.

After peaking at $2.65 in April 2022, the Lake Resources share price crashed to a low of 54.5 cents in July. It’s since recovered just 38% to trade at 75 cents.

Meanwhile, many of its S&P/ASX 200 Index (ASX: XJO) lithium peers have soared into the green.

Shares in Sayona Mining Ltd (ASX: SYA) and Pilbara Minerals Ltd (ASX: PLS), for instance, have gained 85% and 41% respectively since this time last year.

And among the carnage facing its share price, Lake Resources has also found itself a favourite among short sellers. Should that be a red flag for those invested in the lithium share? Let’s take a look.

Is a large short interest a red flag for ASX investors?

Short sellers effectively bet against a company’s share price. Thus, considering the level of short seller interest in a share can be a means to gauge market sentiment.

That certainly sounds like a red flag for investors ‘going long’ on the stock (expecting it to gain in the future).

Especially as short-selling proponents – such as Warren Buffett – argue that, among other impacts, short sellers can help sniff out dishonest business practices. The billionaire once said:

The situations in which there have been huge short interests … very often have been later revealed to be frauds or semi-frauds.

Though, short sellers can also make false claims against a company in a bid to cause investors to sell its stock in a panic, in turn reducing its share price.

If that’s indeed the case, an investor might be wise to largely ignore short sellers.

Right now, around 7% of Lake Resources shares are being shorted. That places it among the ASX’s 10 most shorted stocks, alongside fellow ASX 200 lithium outfits Sayona, Core Lithium Ltd (ASX: CXO), and Liontown Resources Ltd (ASX: LTR).

Fortunately for those interested in Lake Resources shares, there is a relatively simple way to know what one notable short seller dislikes about the share – simply because they’ve told us.

Lake Resources shares hit by short attacks in 2022

Short seller interest in Lake Resources shares spiked in June last year, just weeks before a scathing attack by activist short seller J Capital dropped, seemingly sending the stock to its lowest price in years.

Since then, J Capital has released a number of reports criticising the company, most recently in December.

Much of its critiques have boiled down to the direct lithium extraction (DLE) technology currently being developed by Lake Resources’ partner Lilac Solutions. The technology is crucial to the company’s Kachi project’s planned production.

Lake Resources has responded to a previous report from the activist short seller, calling its claims “incorrect” and “inaccurate”.

The post Lake Resources shares are among the most shorted on the ASX. Is this a red flag? appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• Core Lithium shares led the charge on this trading platform in 2022. Can you guess the other top stocks?
• Here are the top 10 ASX 200 shares today
• These are the 10 most shorted ASX shares
• Lake Resources share price rises amid quarterly update

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 no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Woodside Energy Group Ltd (ASX: WDS) share price is up 0.98% in afternoon trade.

The S&P/ASX 200 Index (ASX: XJO) oil and gas company closed yesterday trading for $36.05 per share and is currently trading for $36.405 apiece.

That’s today’s price action for you.

Now, here’s why the Woodside share price could enjoy some heady tailwinds in 2023.

Tailwinds ahead for the Woodside share price?

There are numerous factors that will impact the performance of the Woodside share price in the year ahead.

Chief among those is the price of oil.

When crude oil topped US$120 in March 2022, ASX oil stocks rallied almost across the board.

Which brings us to some rather bullish forecasts for the oil price in 2023.

According to analysts at Goldman Sachs, the oil price is forecast to rise by some 20% amid new supply issues and diminishing spare capacity even as demand looks set to grow.

This comes as China reopens from its extended COVID lockdowns. It will see the world’s most populous nation upping its energy requirements, while sanctions are likely to see much of Russia’s oil exports slashed. 

And with new investments in exploration and production lagging, Goldman sees the price of crude oil heading back to US$100 per barrel. That’s up from just over US$80 per barrel today.

According to Goldman Sachs analyst Jeff Currie (quoted by Bloomberg), “The commodity super cycle is a sequence of price spikes with each high higher and each low higher.”

Should the next sequence see the price spike higher, as Currie expects, it should offer some helpful tailwinds for the Woodside share price.

What else is ahead for the ASX 200 oil stock?

After years of delays, it appears Woodside is closer to developing its joint venture Sunrise gas field.

Sunrise is located some 150 kilometres offshore of Timor-Leste and 450 kilometres from Darwin.

Woodside owns approximately 33% of the $50 billion gas field, with its joint venture (JV) partners Osaka Gas and the Timor-Leste government owning the rest.

Development of the gas field has been on the back burner as the partners debate the merits of constructing an LNG export plant in Timor-Leste. Woodside has opposed that proposal, citing higher costs involved than processing at existing plants in the Northern Territory.

Now, as The Australian reports, Woodside is reconsidering its opposition to that plan, with new modular technology potentially bringing the costs of constructing a plant in Timor-Leste down to a palatable level.

In a move that could offer a boost to the Woodside share price, the oil giant stated it will now conduct a new study alongside its JV partners with a “strong focus on delivery of gas to Timor-Leste”. The company will compare how that plan stacks up against delivering the gas for processing to Australia.

“It is important we continue to look at ways to develop the Greater Sunrise fields using the latest technologies by evaluating, for example, modular LNG, that did not exist in the past,” Woodside CEO Meg O’Neill said.

According to O’Neil:

Against a backdrop of global geopolitical instability and constrained energy supply chains, there is an opportunity for the Sunrise Joint Venture to significantly advance this regionally important project…

The Timorese are very keen to have that development in country and we recognise it is an important national project for them, so we feel like it’s appropriate to reopen the concept evaluation, understand the technologies, understand the technical challenges.

Woodside share price snapshot

The Woodside share price has been a strong performer amid higher energy costs.

As you can see in the graph below, shares in the ASX 200 energy company are up 36% over the past 12 months.

The post Why the Woodside share price could leap higher in 2023 appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Top ASX value shares to buy in February 2023
• 5 things to watch on the ASX 200 on Friday
• Up 37% in 12 months: Here’s why this fundie still sees value in Woodside shares
• Two ‘top prospect’ ASX 200 dividend shares for 2023 revealed: fund manager

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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With Commonwealth Bank of Australia (ASX: CBA) shares recently hitting a record-high, it’s clear to see that the market is expecting a strong half-year result from the banking giant later this month.

Ahead of the release on 15 August, let’s take a look to see what analysts are expecting from Australia’s largest bank.

CBA half-year results preview

According to a note out of Goldman Sachs, its analysts expect a strong but slightly below consensus profit result from the bank. It commented:

1H23E cash earnings from continued operations (pre-prefs, pre-NRIs) up 7.6% on pcp to A$5,108mn vs. Visible Alpha consensus A$5,165mn.

Despite this, the broker believes CBA will pay a larger than expected interim dividend. It expects an interim dividend of $2.12 per share, versus the $2.09 per share consensus estimate.

What will drive this result?

Goldman is expecting CBA’s deposits to have been a major tailwind for the bank’s net interest margin (NIM) during the half. Though, it has warned that this could soon become a headwind. The broker explained:

Amongst the major banks, CBA has the highest skew towards deposit funding (CBA at c.70% vs. peers at c.60%), which our product pricing analysis suggests should have been a tailwind over 1H23, contributing to our 24bp hoh forecast expansion in CBA’s 1H23E NIM. However, we have witnessed some more aggressive deposit repricing in late CY23/early CY24 and we will be keen to understand the extent to which this — along with the impact on deposit mix — will have on NIMs over the remainder of CY23.

What else should you look out for?

With the cash rate increasing there are concerns about bad and doubtful debts (BDDs) increasing. However, Goldman Sachs appears confident that this won’t be the case with this result. It adds:

While cash rates rose 2.25% over the course of CBA’s 1H23, we think the impact on CBA’s BDD charge will be fairly muted, to date. However, we are keen to hear from management on i) any exposures where they have witnessed some deterioration, ii) the sensitivity of the banks’ provision models to deteriorating macroeconomic conditions (GDP growth, unemployment and house price), and iii) how capital levels might respond if economic conditions start to deteriorate over the course of CY23.

Should you buy CBA shares?

Unfortunately, for valuation reasons, Goldman isn’t recommending CBA shares to its clients.

It currently has a sell rating and $92.56 price target on them. This implies material downside for the bank’s share price from current levels.

Though, it is worth noting that this has been the case for some time and hasn’t been able to prevent CBA shares from scaling new heights this year.

The post Own CBA shares? Here’s the bank’s half-year results preview appeared first on The Motley Fool Australia.

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More reading

• NAB shares: A top tip for passive income?
• If you stocked up on $5,000 of CBA shares 5 years ago, here’s how much dividend income you’ve made
• 3 of the safest ASX 200 dividend stocks in Australia
• Investing in ASX 200 dividend shares? Here’s what to look for in 2023: fund manager
• ASX 200 investors are selling off CBA shares! What should I do?

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

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When you ask an investor about buying ASX 200 shares for passive income from dividends, the big four banks probably come to mind. After all, ASX 200 bank shares, like National Australia Bank Ltd (ASX: NAB), have paid out some of the ASX’s heaviest dividends for decades.

But are NAB shares really a top pick for passive income in 2023?

Well, let’s start at the start.

So NAB shares have paid out two dividends over the past 12 months, as most ASX 200 dividend shares are wont to do. The first was the July interim dividend worth 73 cents per share. The second was the final dividend that investors received in December, worth 78 cents per share. Both dividends came fully franked, as is typical with NAB.

Both of these dividends were healthy increases over 2021’s commensurate dividends. This total of $1.51 in dividends per share over the past 12 months gives NAB shares a trailing dividend yield of 4.7% (or 6.71% grossed-up with the full franking) today.

This yield represents $4.70 in passive income per year in dividends for every $100 invested.

Now, that’s actually on the lower end of the scale when it comes to the other big four ASX banks.

For example, Westpac Banking Corp (ASX: WBC) shares offer investors a trailing dividend yield of 5.21% at current pricing. Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares are sitting on a yield of 5.62% right now.

Only the Commonwealth Bank of Australia (ASX: CBA) share price has a lower dividend yield than NAB’s today, at 3.47%.

Are NAB shares an ASX 200 buy for passive dividend income today?

So if NAB at least maintains 2022’s dividends in 2023, investors can look forward to at least a 4.7% fully franked dividend yield this year. That’s certainly a meaningful source of passive income from this ASX 200 dividend share.

But dividends are never guaranteed on the ASX. So there’s no way to know if NAB will really keep its payouts steady this year.

But one ASX broker thinks the bank will.

As my Fool colleague James covered this morning, ASX broker Goldman Sachs has just come out with another buy rating on NAB shares. The broker has given the ASX 200 bank a 12-month share price target of $35.60. If realised, investors will enjoy an upside of more than 11% from capital growth alone from where the shares sit today:

But let’s talk about dividends. So Goldman is also predicting that not only will NAB maintain 2022’s dividend levels this year, but increase them. The broker is pencilling in a total of $1.66 in dividends per share for FY2023, which rises to $1.73 per share for FY2024.

So at least one ASX expert reckons NAB shares will be able to deliver rising passive income to investors for at least the next year or two. Only time will tell what kind of dividends NAB will end up funding in the future.

But at least one ASX broker is tipping NAB shares as a great source of passive dividend income going forward.

The post NAB shares: A top tip for passive income? appeared first on The Motley Fool Australia.

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More reading

• How I’d invest $300 a month in ASX shares to target an extra income of $20,000 per year
• Buy NAB and this ASX 200 dividend share now: brokers
• 3 ASX dividend shares I’m backing to outperform in 2023
• Should I buy Westpac shares for the big dividend?
• ANZ share price slips amid $50m acquisition

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

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The Wesfarmers Ltd (ASX: WES) share price is currently in the red amid news that Catch, one of its businesses, is cutting jobs.

According to reporting by The Australian, the e-commerce player is going through a period of redundancies because the operating losses are worsening with consumers spending less online.

Catch is an online retailer of a wide variety of different products including clothes, beauty products, pet products, food and drink, home items such as furniture and appliances, sports gear and electronics.

During 2020 and 2021, businesses that sold things saw a big increase in e-commerce demand. Not only were many physical shops shut, but consumers also had more money to spend, with government stimulus and limited other options for discretionary spending.

What’s going on?

The Australian reported on comments by a Catch spokesman:

Like many eCommerce brands, Catch has made the difficult decision to reduce its workforce as the business adjusts to changes in online demand that has occurred following the Covid period. We want to be as efficient as possible to drive value for our customers.

Approximately 100 team members in Australia are impacted, with redeployment where possible across the group a key focus. Functions impacted include marketing, product and technology and finance.

Treating people with respect is our number one priority and we are providing outplacement support to impacted employees.

According to the newspaper, the job losses represent around 30% of the workforce.

Latest update that could influence the Wesfarmers share price

We’ll soon hear from Wesfarmers with its FY23 half-year result. However, the company said at its annual general meeting (AGM) that sales for the Catch marketplace had “declined through the year-to-date, as online demand generally has adjusted from very high levels recorded during periods of lockdown.”

Catch’s new CEO, Brendan Sweeney, recently joined the group and was expected to focus on plans to improve the customer offer while managing the ongoing investment program to support scalability and long-term growth.

Catch is part of OneDigital, the company’s group digital division, which includes its group subscription program, called OnePass. Wesfarmers is investing in systems, processes and capabilities to support its data and digital ambitions. Excluding Catch, OneDigital was expecting to make an operating loss of $100 million in FY23.

However, as a whole, Wesfarmers noted in late October that “Australian consumer demand continues to be supported by low unemployment and high levels of accumulated household savings, but rising interest rates and the impact of inflation are starting to affect consumer behaviour.”

Some consumer feedback and shopping patterns indicate that some customers are becoming more price sensitive as they try to manage household budgets. Wesfarmers thinks its businesses, “well known for their everyday low prices”, can outperform relative to others.

Wesfarmers share price snapshot 

The Wesfarmers share price has climbed more than 10% since the start of 2023, as the business regains some of the lost ground in 2022.

The post Wesfarmers share price drops on Catch news appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Wesfarmers. 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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Building a passive income from ASX shares is something that anyone can do.

And while it doesn’t happen overnight, if you’re both disciplined and patient, generating a $20,000 second income from ASX shares is very achievable, even by making modest investments, thanks to compounding.

Getting started

Firstly, in order to get a $20,000 a year paycheck from the share market, you’re going to have to build your portfolio to a size that yields this amount in dividends.

Given that many banks like Westpac Banking Corp (ASX: WBC) and high-yield ASX ETFs offer 6% yields for investors, we’ll base our calculations on that.

To be paid $20,000 of dividends each year when earning a 6% dividend yield, you’ll need a portfolio of ASX shares valued at approximately $330,000.

When you’re starting out, that might seem like an unattainable goal, but I don’t believe it is. Once again, it’s all about patience and discipline.

Over the long term, share markets have provided investors with an average annual return of 10%. Unfortunately, I cannot guarantee that this will be the case in the future, but I would be disappointed if future share market returns are not in line with historical levels.

If you’re able to invest $300 a month into high-quality ASX shares and generate a 10% average annual return, your portfolio will have grown to be worth $335,000 in 24 years.

At that point, you could switch your focus to income and build a diversified portfolio filled with ASX shares offering dividend yields averaging 6%. Doing so would give you a $20,000 second income without having to lift a finger.

Speedier options

Investors who are able to put a little bit extra into their monthly investments will get there even quicker.

For example, investing $500 would grow your portfolio to the required size after a little over 19 years.

Can stretch your budget further? Well, $750 would take a touch over 15 years to hit our goal.

Which ASX shares should you buy?

I would focus on buying ASX shares with strong business models, excellent management teams, competitive advantages, and positive growth outlooks.

Companies such as CSL Limited (ASX: CSL), Domino’s Pizza Enterprises Ltd (ASX: DMP), and Goodman Group (ASX: GMG) tick a lot of these boxes for me.

Alternatively, you could take the easy option and buy index-tracking ETFs like Betashares Nasdaq 100 ETF (ASX: NDQ) or Vanguard Australian Shares Index ETF (ASX: VAS). These funds aim to provide you with the return of the respective index before fees.

The post How I’d invest $300 a month in ASX shares to target an extra income of $20,000 per year appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF, CSL, Domino’s Pizza Enterprises, and Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF, CSL, and Domino’s Pizza Enterprises. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Domino’s Pizza Enterprises, Goodman Group, and Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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An investor has been sentenced to 12 months’ imprisonment for manipulating the price of ASX shares.

The supreme court of Western Australia last week handed down the penalty to Don George Evans of Woodlands, Western Australia for conspiring to illegally push up the stock price of an ASX-listed mining company.

The court heard that Evans met then-director of Quantum Resources, Avrohom Kimelman, and corporate consultant Benjamin Heath Cooper to come up with a plan to pump up the Quantum share price to a certain level.

They then executed the manipulation on 16 November 2015 by coordinating a series of trades and encouraging other investors to buy in.

Quantum Resources is now known as Nova Minerals Ltd (ASX: NVA).

During sentencing, Justice McGrath stated the sentence needed to be sufficient to deter others who could be tempted into such behaviour.

“Compliance… is vital to maintain market integrity and promoting the confident and informed participation of investors in the financial market operated by the ASX.”

Evans was also prohibited from managing corporations for five years.

All three conspirators now sentenced

According to Australian Securities and Investments Commission deputy chair Sarah Court, Evans’ imprisonment wraps up its actions in relation to Quantum shares after the other two people involved were previously sentenced.

“ASIC is committed to acting against conduct that damages the integrity of Australia’s markets,” she said.

“Market manipulation undermines investor confidence and ASIC will take strong and considered action to combat it.”

Evans was released immediately after the sentencing hearing on a recognisance of $5,000, contingent on two years of good behaviour.

Kimelman was sentenced to 18 months’ imprisonment back in November 2021. Cooper was given 15 months in a decision handed down in December last year.

The post ASX investor gets 12-month sentence for share price manipulation appeared first on The Motley Fool Australia.

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

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