Tag: Motley Fool

When the time comes to retire, you’ll hopefully have a bountiful superannuation balance to support your dream lifestyle.

But what if you don’t want to settle for that? What if you could have a $5,000 monthly paycheck all through retirement on top of your super without needing to work for it?

I know I’d be happy with that! But is it achievable?

The good news is that it certainly is possible if you have both time and patience.

How to retire with a $5,000 paycheck?

A monthly passive income of $5,000 equates to $60,000 annually. So, in order to generate this level of income we will need to bring in the latter in dividends each year to fund our lifestyle.

The S&P/ASX 200 Index (ASX: XJO) traditionally provides investors with an annual dividend yield of approximately 4.5%.

If this proves to be the case in the future, we’re going to need to build an investment portfolio worth $1.3 million that is filled with dividend-paying ASX 200 shares like Macquarie Group Ltd (ASX: MQG) and Telstra Group Ltd (ASX: TLS).

Building your portfolio

According to Fidelity, over the last 30 years, the Australian share market has generated an average annual return of 9.6% per annum.

While past performance is not a guarantee of future performance, these returns are in line with long term returns generated across the world. So, I would be disappointed if the next 30 years didn’t deliver something similar.

In order to grow your portfolio to $1.3 million from zero, investors could put $650 of their earnings into the market each month for a period of 30 years. If these investments earned the average annual return of 9.6% per annum over this period, they would grow to $1.3 million after three decades.

Once the portfolio reaches that level, you would be earning $60,000 a year ($5,000 a month) from dividends if you’re commanding a dividend yield of 4.5%.

Different time horizons

If you don’t have as long as that to build your portfolio, don’t worry. It’s still possible, you’ll just need to dig deeper into your pockets. For example, if you’re able to invest $1,850 per month, then you could get there in 20 years by generating that 9.6% per annum average annual return.

Conversely, if you have even more time on your side, then the periodic investment required to achieve this goal would be even smaller.

Thanks to the power of compounding, a $260 per month investment over a 40-year period would grow to be worth $1.3 million if it earns the aforementioned annual return. And a 50-year investment period would require only a $100 investment.

I feel the latter really demonstrates why starting as early as possible is the best way to generate wealth from the share market.

The post How much do I need to invest in ASX dividend shares for a retirement income of $5,000 per month? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• The Macquarie dividend is being divvied out today. Here’s the lowdown
• Morgans names 2 of the best ASX 200 dividend shares to buy in December
• Here are the top 10 ASX 200 shares today
• Telstra share price outperforming despite data breach impacting 132,000 customers

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 positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Macquarie 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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On Tuesday, the S&P/ASX 200 Index (ASX: XJO) was back on form and pushed higher. The benchmark index rose 0.3% to 7,203.3 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to push higher on Wednesday following a positive but volatile night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 14 points or 0.2% higher this morning. In late trade on Wall Street, the Dow Jones is up 0.3%, the S&P 500 is up 0.7%, and the Nasdaq is up 1%. The latter was up almost 4% at one stage after a better than expected US inflation report.

Oil prices surge

It could be a good day for energy shares Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) after oil prices rose strongly overnight. According to Bloomberg, the WTI crude oil price is up 3.1% to US$75.44 a barrel and the Brent crude oil price has risen 3.6% to US$79.14 a barrel. Oil prices jumped after US inflation came in lower than expected.

Annual general meetings

There are a number of annual general meetings being held on Wednesday. Among the ASX 200 shares holding meetings are Australia’s oldest bank Westpac Banking Corp (ASX: WBC), fund manager Magellan Financial Group Ltd (ASX: MFG), and commercial explosives company Orica Ltd (ASX: ORI).

Gold price rises

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) will be on watch after the gold price stormed higher overnight. According to CNBC, the spot gold price is up 1.7% to US$1,822.3 an ounce. Once again, the lower than expected US inflation reading boosted the precious metal.

Woolworths remains a buy

The Woolworths Group Ltd (ASX: WOW) share price remains good value according to analysts at Goldman Sachs. In response to reports that the retail giant has sold almost a third of its Endeavour Group Ltd (ASX: EDV) holding, the broker has retained its buy rating and $41.70 price target. Goldman suspects that the funds will be used to acquire a 50% stake in PETstock for ~A$600 million. It feels this “would be in line with its eco-system growth strategy.”

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• How I’d try to make $1 million by investing $5 a day in ASX 200 shares
• Woodside share price holds steady despite oil giant’s warning over gas intervention
• Tyro share price rebounds 14% as rumours swirl over next moves

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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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Leading exchange-traded fund (ETF) iShares S&P 500 ETF (ASX: IVV) recently went through a stock split.

Blackrock decided to do a stock split with the iShares S&P 500 ETF – it’s a 15:1 stock split, which is why the unit price has gone from close to $600 to around $40.

The ETF returned to normal trading on a normal settlement basis this week.

I think it’s important to remember that a stock split doesn’t mean investors have more or less invested in the ETF. A $1,200 investment is still worth $1,200 whether it was spread across two units or 30. The pizza has been divided into many more slices, but it’s still the same amount of pizza.

Is the iShares S&P 500 ETF a buy?

Warren Buffett himself has said that (American) investors can do well by just investing in an S&P 500 fund.

I think it’s attractive for a number of different reasons.

For starters, the fund has an extremely low annual management fee of just 0.04%. This means investors can get exposure to the portfolio for almost nothing.

I think it’s a great portfolio. Everyone may have their own thoughts on the US economy, but many of the businesses listed in the US are global powers in their respective industries.

Apple sells its smartphones all over the world. Microsoft’s office software and Xbox consoles have a worldwide user base. Amazon‘s e-commerce is growing, along with its cloud computing service AWS. Alphabet’s Youtube, Google Search and more are used by people worldwide.

There are many other worldwide businesses in the portfolio such as Berkshire Hathaway, Tesla, Johnson & Johnson and Exxon Mobil.

The ETF has produced solid returns over the past three years, despite a large amount of volatility that investors have suffered from because of high inflation and rising interest rates.

In the five years to November 2022, the iShares S&P 500 ETF had returned an average of 13.5% per annum. While past performance is not a reliable indicator of future performance, I think it shows the types of returns that the underlying businesses are capable of producing over time.

Foolish takeaway

While the future is uncertain – there’s always uncertainty – I think that the iShares S&P 500 ETF is a leading idea to consider for investors that want to invest in ETFs focused on international shares. The stock split doesn’t really mean anything in terms of how attractive the investment is, but I think it’s compelling as a passive investment option.

The post Is the iShares S&P 500 ETF (IVV) a buy following its stock split? appeared first on The Motley Fool Australia.

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More reading

• Is the iShares S&P 500 ETF (IVV) really down 95% today?
• What you need to know about next week’s iShares S&P 500 ETF (IVV) stock split
• 2 ASX ETFs I’d buy right now if I were in my 20s
• 2 high quality ETFs for ASX investors to buy now

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 positions in and has recommended Alphabet, Amazon.com, Apple, Berkshire Hathaway, Microsoft, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet, Amazon.com, Apple, Berkshire Hathaway, and iShares S&p 500 ETF. 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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Would you like to trade in $10,000 and receive $100,000 in return? It’s a moot question, but can it really be done with ASX 200 shares?

Well, the question shouldn’t be ‘can’. It should be ‘how long will it take?’

Shares are growth assets. Sure, they are volatile, but there has never been a period in the history of the ASX (which has roots that predate Federation, mind you) when the Australian share market has never failed to eclipse a previous all-time high.

Shares go up over time; they always have. That doesn’t mean there won’t be a few wobbles or crashes along the way. But markets rise far further and more often than they fall.

So how long would an investor have to wait for $10,000 to become $100,000?

Turn $10,000 into $100,000 with ASX 200 shares

Well, it depends on a few things. First, the rate of return. Some ASX shares will give better returns than others of course. So for this exercise, we’ll use an index exchange-traded fund (ETF) that covers the entire market. That way, we can get an average return for ASX 200 shares.

The oldest ASX 200 ETF on the share market is the SPDR S&P/ASX 200 Fund (ASX: STW), so what better candidate to use? Since its inception in 2001, the SPDR ASX 200 ETF has returned an average of 7.94% per annum, assuming dividends are reinvested. See its share price history below:

So if an investor put $10,000 into shares generating a 7.94% annual return, it would take approximately 29.5 years for that $10,000 to grow 10 times to $100,000.

ETFs are usually ‘maintenance-free’, bottom drawer types of investments, so the only thing this investment requires is time. But near-30 years is a long time to wait.

So what if our investor added an extra $100 per month?

Why then it would only take 19.5 years to reach our $100,000. After 30 years, our lucky investor would have more than $250,000 to their name.

If we upped our monthly contributions to $200 a month, we would cut our time to hit $100k down to 15 years. $500 a month would reduce it again to just under 10 years.

Such is the power of compound interest.

The post Investing in ASX 200 shares could turn your $10,000 into $100,000. Here’s how appeared first on The Motley Fool Australia.

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More reading

• Is the SPDR S&P/ASX 200 Fund (STW) an ETF?

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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The BHP Group Ltd (ASX: BHP) share price had a tough day on the market today.

BHP shares fell 1.52% to close at $46.08. For perspective, the S&P/ASX 200 Index (ASX: XJO) climbed 0.31% today.

Let’s take a look at what impacted the BHP share price today.

What’s going on?

BHP is not the only ASX iron ore share that struggled today. The Fortescue Metals Group Limited (ASX: FMG) share price slid 4.21% today, while Rio Tinto Ltd (ASX: RIO) shares dropped 1.93%.

The S&P/ASX 200 Materials Index (ASX: XMJ) slid 1.4%, making it the worst-performing sector on the market.

BHP, Rio, and Fortescue are all among the top iron ore producers in the world.

Iron ore futures on the Singapore Exchange is down 2.28% to US$106.90 at last look.

The share price of the largest iron ore producer in the world, Vale SA (NYSE: VALE), also dropped 4.19% on the New York Stock Exchange overnight.

Navigate Commodities managing director Atilla Widnell said iron ore at more than $100 a tonne seems “overvalued” currently. In quotes cited by Hellenic Shipping News, Widnell added:

The longer prices persist above this level there’s an increasing likelihood the pricing-floor may start to move higher.

Iron ore futures rallying to close at $111.75/t on Friday is yet another poignant example of just how much heat and overly positive sentiment is currently built in to the current pricing structure.

Macquarie analysts have recently retained an outperform rating on BHP shares with a $50 price target. The team lifted their price target to reflect higher-than-expected iron ore prices.

BHP share price snapshot

The BHP share price has risen 26% in the last year, as shown in the graph below. It is also up by more than 9% in the past month.

BHP has a market capitalisation of about $233 billion.

The post Why did the BHP share price get hammered on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• 2 ASX 200 dividend heavyweights to buy and hold until you retire
• Why is the Fortescue share price tanking on Tuesday?
• Is now really the time to buy ASX 200 shares?
• Top ASX dividend shares to buy in December 2022
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Monica O’Shea 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 Macquarie 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 S&P/ASX 200 Index (ASX: XJO) traded in the green on Tuesday, recovering some of yesterday’s slump. At the end of today’s session, the index was 0.31% higher at 7,203.3 points

Tech shares were among the market’s best performers today, with the S&P/ASX 200 Information Technology Index (ASX: XIJ) lifting 1.7%.

It followed a decent night on Wall Street that saw the tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) posting a 1.3% gain. The Dow Jones Industrial Average Index (DJX: .DJI) meanwhile, rose 1.6% and the S&P 500 Index (SP: .INX) lifted 1.4%.

Banks also posted a good day’s trade today, with the S&P/ASX 200 Financials Index (ASX: XFJ) gaining 1.4%.

However, the market’s other giants, miners, struggled. The S&P/ASX 200 Materials Index (ASX: XMJ) fell 1.4% on the back of lower commodity prices.

Gold futures prices fell 1% to US$1,792.30 an ounce overnight while iron ore futures slipped 0.9% to US$109.47 a tonne.

All in all, all but one of the ASX 200’s 11 sectors closed higher. But which stock outperformed all its peers to post today’s biggest gain? Keep reading to find out.

Top 10 ASX 200 shares countdown

Today’s top-performing ASX 200 share was Bendigo and Adelaide Bank Ltd (ASX: BEN) – lifting 6.9%.

Its gains come on the back of a positive trading update, detailing a 22% jump in cash earnings.

Today’s biggest gains were made by these shares:

ASX-listed company	Share price	Price change
Bendigo and Adelaide Bank Ltd (ASX: BEN)	$9.66	6.86%
Megaport Ltd (ASX: MP1)	$7.12	5.95%
Imugene Limited (ASX: IMU)	$0.195	5.41%
Challenger Ltd (ASX: CGF)	$7.67	4.64%
Nanosonics Ltd (ASX: NAN)	$4.55	4.36%
Telix Pharmaceuticals Ltd (ASX: TLX)	$6.99	4.33%
Kelsian Group Ltd (ASX: KLS)	$5.67	4.04%
Corporate Travel Management Ltd (ASX: CTD)	$14.76	3.87%
Smartgroup Corporation Ltd (ASX: SIQ)	$5	3.52%
Xero Limited (ASX: XRO)	$72.98	3.33%

Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• How I’d try to make $1 million by investing $5 a day in ASX 200 shares
• Why Bendigo Bank, Block, Megaport, and Starpharma shares are rising today
• The Macquarie dividend is being divvied out today. Here’s the lowdown
• Bendigo Bank share price surges 7% on earnings boost

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 Megaport, Nanosonics, and Xero. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank, Nanosonics, Smartgroup, and Xero. The Motley Fool Australia has recommended Challenger, Corporate Travel Management, and Megaport. 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 great silver linings of a bear market is that it’s sometimes possible to snap up great companies at a bargain price.

Some places to start uncovering these discounted shares include the recent recommendations of our Share Advisor team.

These recommendations aim to help investors beat the market by outperforming an investing benchmark such as the S&P/ASX 200 Index (ASX: XJO) which has slipped 5.12% this year so far.

Shares on the following list have fallen 30% or greater year to date, but are unlikely to stay cheap forever. So to lock in some potential gains, let’s cover which Fool recommendations are worth buying before the curtain falls on 2023.

Nine Entertainment Co Holdings Ltd (ASX: NEC)

The Nine Entertainment share price is down 30.7% so far this year but could be poised to recover strongly. One reason to be bullish is that the company’s revenues are scaling upwards.

Nine Entertainment’s advertising revenue growth is primarily driven by the company’s strong presence in the Australian media market. Nine Entertainment is the leading commercial free-to-air broadcaster in Australia and is home to some of the country’s most popular television shows.

In August, the company reported its revenues increased 15% year over year (yoy) to $2.7 billion in FY2021. Meanwhile, its bottom line also saw a lift, with its earnings before interest, taxes, depreciation, and amortisation (EBITDA) growing 24% to $700.7 million.

Some analysts also agree the share could be undervalued. These include Shaw and Partners portfolio manager James Gerrish, who noted:

At just 11x expected FY23 PE, Nine is undervalued and recent numbers suggest the underlying business is holding up better than expected.

Xero Limited (ASX: XRO)

Xero, which provides a software-as-a-service (SaaS) accounting solution to businesses, has also had a rough year, with its shares losing almost 50% of their value year to date.

Xero was recommended as a buy in September due to the size of its total addressable market, recent financial performance, and discounted share price.

When the company reported its results for FY2021 in May, Xero stated it had grown its user base in all of its key regional operating segments including Australia, New Zealand, and the United Kingdom.

Looking ahead, there could be a strong opportunity for Xero to continue adding users in its North American segment where it reported a relatively low user penetration of 339,000 subscribers. With approximately 33.2 million small businesses in the United States alone, it suggests substantial room for growth.

In terms of Xero’s financials and key metrics, its total subscribers grew 19% yoy in FY2021 to 3.3 million, while its annualised monthly recurring revenue (AMRR) grew 28% to NZ$1.2 billion. It should be noted Xero recorded a net loss after tax of NZ$9.1 million during this period.

As for its share price, Morgans gave it a price target of $77 earlier this month. That represents an upside of 5.5% at the time of writing.

ARB Corporation Limited (ASX: ARB)

ARB designs and manufactures automotive accessories for four-wheel-drive (4WD) and light commercial vehicles. The company has seen its share price drop 47% so far this year.

But its recent top and bottom line performances, as well as its robust balance sheet, were among the reasons for bullish sentiment.

As part of its full-year results for FY2022, ARB stated its revenues grew 11.4% yoy to $697.3 million while net profit after tax (NPAT) grew 8.1% yoy to $122 million. At the time, ARB said it had no debt on its books along with a healthy cash reserve balance of $52.7 million.

Although it declined to give revenue and earnings guidance as part of its results, ARB did paint a bullish picture of where it will be headed in 2023 and beyond.

ARB Corporation’s managing director Andrew Brown said:

The board remains positive and expects that the company should benefit by the end of calendar 2022 from recent new vehicle models, a strong customer order book sitting well above historical levels, a number of all-new products due for imminent release, healthy demand for the company’s products around the world and the prospect of increasing supply of new vehicles to the market.

Citi analysts gave ARB Corporation’s share a price target of $39.25 in November. That represents almost 40% upside at the time of writing.

The post Looking for bear market bargains? 3 ASX shares to buy before 2023 appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• How I’d try to make $1 million by investing $5 a day in ASX 200 shares
• The Macquarie dividend is being divvied out today. Here’s the lowdown
• Is now really the time to buy ASX 200 shares?
• 3 incredible ASX tech stocks down over 50% to buy before the next bull market

Motley Fool contributor Matthew Farley 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 Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended ARB Corporation and Nine Entertainment. 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 Commonwealth Bank of Australia (ASX: CBA) share price is one of the most watched within the S&P/ASX 200 Index (ASX: XJO), being the biggest ASX bank share. But, with its large size, is the company a major opportunity?

There is plenty to look at in the banking sector at the moment. Ever since COVID-19 came onto the scene, banks have had to deal with significant changes to the financial situation.

Investors that have held CBA shares for decades have done very well, particularly with all of the dividend income that it has dished out.

But, with the CBA share price up more than 16% over the last six months, could the bank be a solid buy?

Optimistic case for CBA shares

One of the key reasons why CBA shares could continue to do well from here is that interest rates are rising.

As a bank, the interest rate is a key part of its financials. It charges interest for customers and pays interest on a lot of the money that is held on deposit for customers.

CBA and many other ASX 200 bank shares are passing on the interest rate hikes to borrowers very quickly, while not passing on the overall increase to savers as quickly.

This is helping boost the CBA net interest margin (NIM) – it will be interesting to see how high CBA’s NIM can go during this period. The higher NIM can boost bank earnings, and investors often like to use profit as a guide for their thoughts on the CBA share price (and many other share prices).

As I’ve already mentioned, the CBA dividend has been very rewarding for investors and this could continue.

The broker Credit Suisse suggests that CBA could pay an annual dividend yield of 5.8% in FY23 and 5.9% in FY24.

Reasons to avoid

CBA has done very well over the decades. But, investors are now pricing at an exceptionally high level compared to other ASX banks.

For example, on Credit Suisse’s numbers, the CBA share price is valued at 17 times FY23’s estimated earnings.

But, Credit Suisse numbers put the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price at under 10 times FY23’s estimated earnings, the Westpac Banking Corp (ASX: WBC) share price at 12 times FY23’s estimated earnings and the National Australia Bank Ltd (ASX: NAB) share price at 12 times FY23’s estimated earnings.

While the higher valuation of CBA shares may not necessarily mean it’s going to fall, it could be better value for investors to consider other ASX 200 bank shares.

I’m also keeping in mind that while the bank may earn higher margins in the short term, there’s a danger that the higher loan rates could mean that arrears and bad debts could rise in 2023.

For these reasons, I think it could be better for investors to wait for a better valuation on CBA shares.

The post CBA shares: 2 reasons to buy, and 2 to sell appeared first on The Motley Fool Australia.

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More reading

• 2 ASX 200 dividend heavyweights to buy and hold until you retire
• Could the VAS ETF outperform the BHP share price in 2023?
• I’d aim for $1 million, buying just 10 cheap ASX shares
• Bought $1,000 of CBA shares 10 years ago? Here’s how much dividend income you’ve received
• 5 popular ASX 200 stocks I’m avoiding, plus one that still looks dirt cheap

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 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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At last, the S&P/ASX 200 Index (ASX: XJO) has turned a corner. Or at least, that’s how it’s heading so far this Tuesday. After falling for most of the past week, the ASX 200 is back in the green today. At present, the index is up a decent 0.24% to just under 7,200 points.

So let’s dive a little deeper into the share market moves today and check out the shares currently at the top of the ASX 200’s share trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Tuesday

Pilbara Minerals Ltd (ASX: PLS)

Our first ASX 200 share today is no stranger to this list. Lithium producer Pilbara Minerals has had a notable 12.83 million shares change hands as it currently stands. There’s been no major news or announcements out of Pilbara today that might be able to explain this volume.

As such, we can probably conclude that it is the volatility we have seen with the Pilbara share price this Tuesday that is responsible.

Pilbara had a strong start to the trading session this morning, rising as high as $4.63 a share soon after market open, after closing at $4.53 yesterday. But investors seem to have gotten some cold feet, with the PiIbara share price slipping by lunchtime. It is now firmly in red territory, having recorded a loss so far today of 0.22% down to $4.52 a share.

Telstra Group Ltd (ASX: TLS)

From PLS to TLS, ASX 200 telco Telstra is next up this Tuesday. This session has seen a sizeable 12.3 million Telstra shares phone home. We haven’t heard much from Telstra today either.

Saying that, the Telstra share price has been rising healthily over the current session. The telco’s shares are currently going for $4.02 each, up 0.63%.

Perhaps investors have taken note of broker Mogans’ $4.60 share price target that we covered yesterday. It’s this strong rise that is probably behind Telstra’s robust volumes.

Core Lithium Ltd (ASX: CXO)

Finally, we have ASX 200 lithium share Core Lithium for our last and most traded share of the day. This Tuesday has seen a hefty 16.77 million Core shares swap owners on the markets thus far.

We have a very similar situation to that of Pilbara Minerals going in here, it seems. This morning also saw Core shares jump higher, rising to a high of $1.20 each.

But over the day, investors have lost their lithium steam, and have now sent the company down to $1.15 a share, down 0.86% for the session. Again, it’s this bouncing around which looks like it has caused the high volumes we are witnessing.

The post Here are the 3 most heavily traded ASX 200 shares on Tuesday appeared first on The Motley Fool Australia.

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More reading

• How I’d try to make $1 million by investing $5 a day in ASX 200 shares
• The Macquarie dividend is being divvied out today. Here’s the lowdown
• How big will the Pilbara Minerals dividend be in 2023?
• 5 things to watch on the ASX 200 on Tuesday
• Morgans names 2 of the best ASX 200 dividend shares to buy in December

Motley Fool contributor Sebastian Bowen has positions in Telstra 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 positions in and has recommended Telstra 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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How does forgoing a single cup of coffee sound? If you’re anything like me, you’ll rebuke the suggestion. But what if ditching the latte could make you a millionaire? Investing just $5 a day in S&P/ASX 200 Index (ASX: XJO) shares could prove a major wealth-building habit.

That’s because of the magic that is compounding. Here’s how it works.

How I would turn $5 a day into $1m using ASX 200 shares

Compounding, in essence, means multiplying gains by further gains. It means that a relatively small investment, when added to consistently, can turn into a meaningful nest egg.

Let’s take ASX 200 shares for example. Over the 10 years ended 2021, the ASX 200 returned an average of 9.3% annually. That’s including both dividends and capital gains.

Now, if you’re 20 years old – good for you. ­Let’s see what might happen if a 20-year-old invests $5 a day and recognises a 9.3% annual return:

Years gone by	Total deposits	Total investment value
0	$0	$0
5	$9,125	$10,988
10	$18,250	$28,127
15	$27,375	$54,864
20	$36,500	$96,570
25	$45,625	$161,629
30	$54,750	$263,115
35	$63,875	$421,424
40	$73,000	$668,373
45	$82,125	$1,053,593

And voila! By the time our figurative 20-year-old investor approaches the Australian retirement age, they’ve got a nest egg worth more than $1 million without doing anything more than putting $5 away each day.

Remembering, however, past returns are not indicative of future returns.

But 45 years may be a little longer than many Aussies’ investment thesis. If that were the case, I would either increase my targeted yield or amount I’m investing to meet my $1 million goal.

For instance, investing $15 a day – or $105 a week – could reap $1 million in 33 years. Investing $30 a day – or $210 a week – could see that target met in 26 years.

Meanwhile, if an investor was able to secure a 13% return, like the average annual return posted by ASX 200 bank Commonwealth Bank of Australia (ASX: CBA) over the last 10 years, $5 each day could become $1 million in a little over 35 years.

Of course, greater returns generally come with greater risks and, again, past returns don’t guarantee future returns.

Some other factors I would consider

Additionally, there’s likely a bit more to it than putting $5 a day aside to invest in ASX 200 shares.

A long-term investor might want to factor in inflation, thereby increasing the amount they invest by the inflation rate each year.

There’s also the issue of sticking out the hard times. It might be extremely tempting to pull cash from investments when the market is going down and it’s almost guaranteed that at least one bear market will occur in the coming decades.

But bailing on investments will likely impact the power of compounding. As investing great Charlie Munger is widely quoted as saying:

The first rule of compounding: Never interrupt in unnecessarily.

The post How I’d try to make $1 million by investing $5 a day in ASX 200 shares appeared first on The Motley Fool Australia.

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More reading

• The Macquarie dividend is being divvied out today. Here’s the lowdown
• 5 things to watch on the ASX 200 on Tuesday
• Down 20% so far this year, are Wesfarmers shares now a no-brainer buy?
• Here are the top 10 ASX 200 shares today
• Why is the Woodside share price smashing the ASX 200 on Monday?

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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