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S&P/ASX 200 Index (ASX: XJO) bank shares are an interesting investment proposition. The question is: Are bank shares a no-brainer buy right now in this time of high inflation?

Now is a busy period for the banking sector because it’s reporting time for three of the big four banks: Australia and New Zealand Banking Group Ltd (ASX: ANZ), Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB).

We’ve already heard the earnings results from ANZ, Westpac has reported today and NAB is expected to report on 9 November. Commonwealth Bank of Australia (ASX: CBA) has a reporting period that ends in June, which is then reported in August.

Let’s take a look at where inflation comes into the banking equation.

What’s going on in the banking world with inflation?

Inflation measures the prices of a broad range of products and services.

The Australian Bureau of Statistics (ABS) recently released the quarterly inflation numbers for the period ending September 2022.

For the three months to September 2022, the consumer price index (CPI) rose 1.8% for the quarter. Over the 12 months to September 2022, the CPI rose 7.3%, according to the ABS.

It was revealed that the most significant price rises were within new dwelling purchases (3.7%), gas and other household fuels (10.9%) and furniture (6.6%).

In terms of the bank’s costs, we have seen that ANZ reported that its total expenses to run the bank were flat. Of the total $9.17 billion cash expenses, it saw a cost uplift of $289 million, but then productivity gains saved $261 million.

But, ANZ did say that expense trends “will be impacted by headwinds arising from wage and vendor cost inflation”. It’s expecting its FY23 expenses to increase by around 5%, though it anticipates revenue growth to be higher than cost growth.

Turning to what Westpac said today, the bank reported that its total expenses were down 7% to $10.8 billion, excluding notable items. While ongoing expenses increased by $11 million, Westpac is working on reducing its current cost base.

Interest rates

ASX 200 bank shares generate most of their profit from lending. So, inflation itself doesn’t necessarily improve profitability for the banks.

However, in the RBA’s words, inflation is “too high”. The RBA has significantly increased interest rates since May, a necessary evil “to establish a more sustainable balance of demand and supply in the Australian economy to help return inflation to target”.

Despite increasing the cash rate target by 25 basis points to 2.85%, the RBA said it expected to “increase interest rates further over the period ahead”.

A higher interest rate is having the effect of boosting the ASX 200 bank shares’ net interest margins (NIM). This measures how much profit banks are making on their loans. It compares the lending rate against the cost of that lending (such as savings accounts and term deposits).

In the first half of FY22, ANZ’s NIM was 1.58%. In the second half of FY22, this had risen to 1.68%. The exit margin for September 2022 was 1.8%. According to the bank, it could earn over $3 billion more profit in FY25 compared to FY22 thanks to higher interest rates.

Westpac also reported that its underlying NIM improved by 10 basis points from 1.7% in the first half of FY22 to 1.8% in the second half of FY22.

Foolish takeaway

While banks are gaining a tailwind from the rising interest rates, it’s not extra profit with no risk. Can households afford to pay hundreds – or thousands – of dollars more a month in loan repayments (plus everything else that has risen in price)?

Dividends from the ASX 200 bank shares may grow, but I’m keeping an eye on how loans in arrears may increase as these challenging economic times take their toll on borrowers.

The post Are ASX 200 bank shares a no-brainer buy in an inflationary environment? appeared first on The Motley Fool Australia.

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More reading

• Why ANZ, Coronado Global, Eclipx, and Westpac shares are dropping
• Why is the Westpac share price dropping 4% today?
• Everything you need to know about the latest Westpac dividend
• Why is the ANZ share price sinking 4% today?
• Are NAB shares a buy ahead of this week’s results?

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 Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) has started the week positively. In afternoon trade, the benchmark index is up 0.4% to 6,922.1 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Australia and New Zealand Banking Group Ltd (ASX: ANZ)

The ANZ share price is down 4.5% to $24.32. There are a couple of reasons for this share price decline. One is weakness in the banking sector and the other is the bank’s shares trading ex-dividend today for its final dividend of FY 2022. Eligible shareholders can look forward to receiving this fully franked 74 cents per share dividend next month on 15 December.

Coronado Global Resources Inc (ASX: CRN)

The Coronado Global share price is down almost 6% to $2.14. This morning this coal miner announced that merger talks with $6 billion Wall Street-listed coal miner Peabody have been discontinued. No reason was given for the collapse in talks. However, Coronado revealed that it continues to pursue and implement its existing capital management plans and remains focused on its existing capital investments and long-term development strategy.

Eclipx Group Ltd (ASX: ECX)

The Eclipx share price is down over 6% to $1.76. This follows news that the fleet management company’s CEO, Julian Russell, will be stepping down from the role in February. Eclipx has acted quickly and named its CFO, Damien Berrell, as Russell’s replacement.

Westpac Banking Corp (ASX: WBC)

The Westpac share price is down over 4% to $23.14. Investors have been selling this banking giant’s shares following the release of its full year results. Although Westpac delivered earnings ahead of expectations, its exit margin and cost reduction target revision appear to have disappointed investors. In respect to the latter, Westpac is now targeting an FY 2024 cost base of $8.6 billion, up from its previous target of $8 billion.

The post Why ANZ, Coronado Global, Eclipx, and Westpac shares are dropping appeared first on The Motley Fool Australia.

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More reading

• No deal: Why ASX 200 coal share Coronado is sinking today
• Why is the Westpac share price dropping 4% today?
• Everything you need to know about the latest Westpac dividend
• Why is the ANZ share price sinking 4% today?
• Westpac share price on watch following FY22 results

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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 Corporation. 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 Lake Resources N.L. (ASX: LKE) share price is charging higher today, up 7.4% in afternoon trade.

Lake Resources shares closed Friday trading for $1.08 and are currently changing hands for $1.16 apiece.

The wider materials sector is broadly outperforming today as well, with the S&P/ASX 200 Materials Index (ASX: XMJ) up 3.4% at the time of writing compared to a 0.4% gain posted by the S&P/ASX 200 Index (ASX: XJO).

Despite today’s big boost, the Lake Resources share price has underperformed most ASX lithium shares in 2022.

Today’s gains put the lithium explorer back in the green for the calendar year. However, shares are only up 6%.

We say ‘only’ because the competition has broadly gained far more.

Core Lithium Ltd (ASX: CXO) shares, for example, are up a whopping 127% in 2022, while the Pilbara Minerals Ltd (ASX: PLS) share price has surged 48%.

Could this help turn a corner for the Lake Resources share price?

In a non-price sensitive announcement today, that could still bode well for the Lake Resources share price over time, the company reported it has appointed Karen Greene as a senior vice president.

Greene has more than 20 years of experience in leading US companies.

She will head investor relations at Lake Resources, in an appointment intended to strengthen the miner’s management team and build the business for the long term.

Lake Resources executive chairman, Stuart Crow said Greene will help the company with its environmental, social and governance (ESG) considerations in supply chains.

“She also has hands-on experience in helping companies grow and mature – as well as branding and marketing expertise as we progress our cleaner way of producing lithium,” Crow added.

The post Could this help turn a corner for the Lake Resources share price? appeared first on The Motley Fool Australia.

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More reading

• The Lake Resources share price leapt 18% in October. Here’s what drove the ASX 200 lithium share higher
• Here are the top 10 ASX 200 shares today
• Why Atlantic Lithium, Coronado Global, Lake Resources, and Rio Tinto are charging higher
• Here are the 3 most traded ASX 200 shares on Wednesday
• Lake Resources share price leaps 10% on ‘excellent early results’

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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The S&P/ASX 200 Index (ASX: XJO) is having a very pleasing start to the week so far during this Monday’s trading session. At the time of writing, the ASX 200 has gained a healthy 0.44% and is back over 6,920 points. But we can’t say quite the same for the Telstra Corporation Ltd (ASX: TLS) share price.

Telstra shares seem to have gotten up on the wrong side of the bed this morning. While the markets were enjoying some time in the sun. Telstra shares opened at $3.88 this morning, below the $3.90 the ASX 200 telco closed at last week.

After a brief stint in positive territory around lunchtime today, the Telstra share price is back in the red so far this afternoon and is now going for $3.89, down 0.13% for the day.

So what might be happening with Telstra shares that have excluded this company from the gains the broader market is enjoying?

Why is the Telstra share price having a stroppy Monday?

Well, it’s hard to say. Telstra hasn’t put out any news or announcements today. Or indeed, over this month so far. But we can see that it’s not just Telstra that the markets are feeling lukewarm about this Monday. Telstra’s fellow telco TPG Telecom Ltd (ASX: TPG) is also having a lacklustre day. Its shares are presently flat at $4.82 each.

Aussie Broadband Ltd (ASX: ABB) is faring worse again. The Aussie Broadband share price is currently down by a nasty 2.39% at $2.45 a share.

That’s despite no news out of any of these companies either.

So we can only conclude that the markets just aren’t in a buying mood when it comes to ASX communications shares. Indeed, the communications sector is one of only four ASX 200 sectors in the red today. So it doesn’t seem to be a Telstra-specific problem that is dampening investor appetites for the telco’s shares this Monday.

At the current Telstra share price, the ASX 200 telco remains down by 7.6% in 2022 so far. Telstra has a trailing dividend yield of 4.23% at this share price.

The post Why is the Telstra share price trailing the ASX 200 on Monday? appeared first on The Motley Fool Australia.

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More reading

• No deal: Why ASX 200 coal share Coronado is sinking today
• Why is the Macquarie share price starting the week lower?
• Do Wesfarmers shares really offer 22% upside AND growing dividends?
• Has this overlooked ASX 200 share really gained more than 1,200% in just 10 years?
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband Limited. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Aussie Broadband Limited and TPG Telecom Limited. 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 start the week with a gain. At the time of writing, the benchmark index is up 0.45% to 6,923.1 points.

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

Arafura Rare Earths Ltd (ASX: ARU)

The Arafura Rare Earths share price is up 12% to 34.2 cents. This morning this rare earths developer announced offtake agreements with automakers Hyundai and Kia. The company will supply the two with up to 1,500 tonnes of neodymium and praseodymium (NdPr) annually from its Nolans Project. The agreement is on a seven-year term, with the potential for a five-year extension.

BHP Group Ltd (ASX: BHP)

The BHP share price is up almost 5% to $40.41. Investors have been buying BHP and other mining shares after commodity prices stormed higher on Friday. This was driven by speculation that China could end its COVID zero policy. Unfortunately, Chinese authorities have since quashed this speculation but that hasn’t stopped BHP’s shares from rising.

Capricorn Metals Ltd (ASX: CMM)

The Capricorn Metals share price is up 10% to $3.84. This follows an announcement by the gold explorer relating to its Mt Gibson Gold Project (MGGP) in Western Australia. According to the release, the company has increased its mineral resource estimate at MGGP by 32% to 2,755,000 ounces. Management also sees opportunities to increase its mineral resource further.

Newcrest Mining Ltd (ASX: NCM)

The Newcrest share price is up 4% to $18.09. Investors have been buying Newcrest and other gold miners on Monday after a strong night for the precious metal on Friday. This has led to the S&P/ASX All Ordinaries Gold index rising a sizeable 4.7% this afternoon.

The post Why Arafura Rare Earths, BHP, Capricorn Metals, and Newcrest shares are rising today appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 mining shares bolting out the gates on Monday?
• Arafura share price rockets 10% on Hyundai and Kia rare earths deal
• Why is this newly minted ASX 200 share rocketing 10% on Monday?
• Why is the BHP share price charging 4% higher?
• 5 things to watch on the ASX 200 on Monday

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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The cryptocurrency market is changing, evolving into an asset class for investors — many of them younger — looking for exposure outside of traditional assets like stocks and bonds.  

Charles Schwab (NYSE: SCHW), a financial services company that provides customers with various investment products, recently conducted a study that shows just how far cryptocurrencies have come in the past decade. The survey asked 1,000 customers with 401(k)s aged 21 to 70 a range of questions related to investing, retirement, and more. Participants were split into four age groups: baby boomers, Gen X, millennials, and Gen Z.  

There were plenty of recurring themes in the study that usually had to do with the embrace of new technology in their investing practices or lack thereof. Millennials and Gen Z consistently showed that they are interested in less traditional assets, and are utilizing smart phones and social media to research and facilitate trades. 

Most interesting was the divide in sentiment on cryptocurrencies between younger generations and the older ones. Only 4% of baby boomers owned cryptocurrencies, compared with 47% of millennials and 43% of Gen Z. 

In addition, participants were asked about what new assets they would like to have access to in their 401(k). At the top of the list for millennials and Gen Z were cryptocurrencies. Roughly 45% of those cohorts wanted to have cryptocurrency options, while only 31% of Gen X and just 11% of baby boomers wanted similar access. 

This research shows similar trends to what a Bank of America study found in mid-October: Cryptocurrencies are becoming more sought after by younger investors. As this trend continues to evolve, it should further legitimize the asset class — and that makes it a great time for investors to get in now while it’s still early. 

Narrowing your options

But there are thousands of cryptocurrencies in circulation today. Which ones should investors prioritize?

To get a better idea, we should look at what cryptocurrencies financial service companies are interested in. Turns out there is one that clearly stands out from the rest: Bitcoin (CRYPTO: BTC). 

As the world’s first and most valuable cryptocurrency, Bitcoin is in a class of its own since being created in 2009. Over the last dozen years or so, Bitcoin has transformed from a highly speculative asset deemed to only be used by criminals to one that is owned by high-profile investors, and even Fortune 500 companies like Tesla.

It’s this visibility that has helped it become one of the most sought-after cryptocurrencies today, and investment firms are coming to this realization. Charles Schwab competitor Fidelity became the first financial services company to offer its 401(k) customers exposure to Bitcoin in April. Since then, similar moves have been made by other companies to meet client demands. In August 2022 the world’s largest asset management firm, BlackRock, partnered with the popular cryptocurrency exchange Coinbase to offer its institutional customers access to Bitcoin trading.

There are other examples, but simply put, Bitcoin is leaps and bounds ahead of any other cryptocurrency when it comes to becoming a recognized asset. As the second-most-valuable cryptocurrency, Ethereum might be the next best option to Bitcoin, but the distance separating the two is wide. For this reason, Bitcoin seems to be the most likely candidate out of all cryptocurrencies to go mainstream first.

We should expect demand for Bitcoin to filter into the world of finance, business, and even our every day lives as younger investors continue to seek exposure. This process won’t happen overnight, or even in the coming months, but will likely take years. This is why now is a great opportunity to buy Bitcoin in preparation for a future where the original cryptocurrency cements itself as a necessary addition to every portfolio. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post This one trend could send Bitcoin even higher appeared first on The Motley Fool Australia.

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More reading

• Ethereum and Bitcoin price crash spells the end for these Aussie crypto ETFs
• Up 18% in a month, could it still be worth buying Ethereum at its current price?
• The Bitcoin price leapt 10% in October. Here’s why
• Why one of the smartest investors bought Bitcoin and thinks you should too
• The Bitcoin price may be decoupling from US stocks. Is this why?

RJ Fulton has positions in Bitcoin. Charles Schwab is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin, Coinbase Global, Inc., Ethereum, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Charles Schwab. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

ARB Corporation Limited (ASX: ARB)

According to a note out of Citi, its analysts have retained their buy rating and $39.25 price target on this 4×4 products company’s shares. Citi notes that US rival Fox Factory has released its quarterly update and revealed solid sales trends. The broker believes this bodes well for ARB’s performance in the second quarter. The ARB share price is trading at $27.84 this afternoon.

CSL Limited (ASX: CSL)

A note out of Morgans reveals that its analysts have retained their add rating and $312.20 price target on this biotherapeutics company’s shares. This follows the release of the company’s research and development update. Morgans highlights that management conservatively estimates that at least 10 compounds (~20% of the total pipeline) have the potential to be standard of care treatments. The CSL share price is fetching $276.49 on Monday.

Rio Tinto Limited (ASX: RIO)

Analysts at Goldman Sachs have retained their buy rating but trimmed their price target on this mining giant’s shares to $112.60. While the broker has trimmed its copper price forecasts, it isn’t enough to change its positive view. Particularly given that its shares are trading at 0.8x net asset value with an attractive dividend yield. The broker also highlights that Rio Tinto is aiming to acquire the remainder of Turquoise Hill, which would almost double its ownership of the massive Oyu Tolgoi project. Goldman believes the project will be long life, low cost, and offers significant expansion potential. The Rio Tinto share price is trading at $95.57 this afternoon.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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More reading

• Own CSL shares? Here’s what brokers are saying about its R&D pipeline
• Why are ASX 200 mining shares bolting out the gates on Monday?
• Why is the Rio Tinto share price having such a stellar start to the week?
• Why I’m seriously considering investing $10,000 in these ASX 200 shares
• Why did the Rio Tinto share price underperform by over 10% in October?

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 CSL Ltd. The Motley Fool Australia has recommended ARB Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://www.fool.com.au/2022/11/07/leading-brokers-name-3-asx-shares-to-buy-today-178/

One of the big pieces of ASX news last week was the fate of the Bravura Solutions Ltd (ASX: BVS) share price. The All Ordinaries Index (ASX: XAO) had a decent, if wild, time last week. But All Ords share Bravura had a real clanger.

On Thursday, this All Ords financial technology company lost a staggering 52.3% of its value in a single trading session.

As we covered at the time, the catalyst for this precipitous drop in value was the disappointing update Bravura released after market close on Wednesday.

This told investors that, after a review, the company needed to be “reconfigured”:

The review has indicated that whilst Bravura has solid foundations, the business will be required to be reconfigured to scale our products across customers.

This will require enhancing the existing technology stack to unlock the existing microservices strategy, drive higher resale multiples on technology development and reduce single customer efforts.

Bravura also sharply downgraded its FY2023 guidance and flagged that it was likely to book a loss on the bottom line.

Investors were not impressed, needless to say.

Bravura director buys the dip

But one insider appears to welcome this massive share price collapse for Bravura. That would be Neil Broekhuizen.

Broekhuizen is an indeprendent non-executive chair and director of Bravura. According to an ASX notice, Broekhuizen owned 215,000 shares of the company before 4 November.

But on that date, Broekhuizen went shopping. He acquired a whopping 636,000 shares on 4 November. This was at an average price of 62.53 cents per share. The buy-the-dip move almost quadrupled Broekhuizen’s share count to 851,000.

Broekhuizen didn’t get in at the bottom by any means. Bravura bottomed out at 54 cents a share last Thursday. But even so, Broekhuizen has already been handsomely rewarded for his pounce. Today, the Bravura share price is trading at 71 cents. That’s up a staggering 19% for the day.

This means that Broekhuizen has already booked an approximate profit of $60,000 on his purchase of the All Ords share last week.

So it seems that Broekhuizen may have pulled off a classic ‘be greedy when others are fearful’ play right out of the Warren Buffett handbook. No doubt Bravura investors have taken this as a positive sign.

The post This ASX All Ords share dumped 50% last week, now a director is buying up big appeared first on The Motley Fool Australia.

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More reading

• Why A2 Milk, Bravura, Magellan, and Pendal shares are dropping
• Why Bravura, Domino’s, Lendlease, and Woolworths shares are sinking
• Why is the Bravura share price crashing 59% today?

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 positions in and has recommended Bravura Solutions Ltd. The Motley Fool Australia has positions in and has recommended Bravura Solutions Ltd. 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 Coronado Global Resources Inc (ASX: CRN) share price is down in the dumps on Monday after the company revealed takeover talks between it and a global coal giant have gone up in smoke.

It was previously in discussions with Peabody Energy Corporation (NYSE: BTU) regarding a potential combination of the companies. However, such talks have come to an end.

The market isn’t reacting well to the news. It’s bidding the Coronado share price 5.95% lower to trade at $2.135 right now.

Let’s take a closer look at the latest news from the S&P/ASX 200 Index (ASX: XJO) coal miner.

ASX 200 coal share tumbles as takeover talks abandoned

The Coronado share price is tumbling on news it won’t be merging with $6 billion New York-listed coal pure-play Peabody.

The pair confirmed they were discussing joining forces after rumours hit headlines last month.

As The Motley Fool Australia reported at the time, their combination would have created a $9 billion powerhouse, with both companies operating coal mines in Australia and the United States.

Though, the ASX 200 coal giant said today’s announcement wouldn’t impact its plans for the fourth quarter.

The Coronado share price was unmoved when the company downgraded its full-year guidance on the back of wet weather events last week.

It now expects to post between 16.9 million tonnes and 17.1 million tonnes of saleable production in 2022. That’s down from prior guidance of between 18 million tones and 19 million tonnes.

It also incorporates fourth-quarter production estimates of between 5.3 million tonnes and 5.5 million tonnes.

It also expects its average mining costs per sold tonne to come in at between US$81 and US$83 in 2022 – up from prior guidance of US$79 to US$81.  

The company’s focus is on upping its production this quarter. Today’s release stated:

Coronado continues to pursue and implement its existing capital management plans and remains focussed on its existing capital investments and long-term development strategy.

Coronado Global Resources share price snapshot

Today’s fall hasn’t been enough to plunge the Coronado share price into the long-term red.

The stock has gained 65% since the start of 2022. It’s also 61% higher than it was this time last year.

Meanwhile, the ASX 200 has dumped 9% year to date and 7% over the last 12 months.

The post No deal: Why ASX 200 coal share Coronado is sinking today 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 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

As stock prices continue to sink, many investors are concerned about what that means for their portfolios.

The S&P 500 and the Nasdaq are officially in bear market territory after falling more than 20% from their peaks earlier this year, and nobody knows how long it will take for the market to recover.

Is it still worth it, then, to continue investing right now? And is it possible to make money even when we’re in a bear market? It depends on your strategy.

How not to invest during a bear market

During periods of volatility, it can be tempting to try to time the market — or buy only when prices are at their lowest and sell when they reach their peaks.  

In theory, this strategy makes sense. By investing when the market is at rock bottom, you can take advantage of those lower prices. Then when stock prices rebound, you can sell your investments for a hefty profit.

However, timing the market successfully is incredibly difficult, and it relies more on luck than skill in most cases. The stock market is unpredictable, and even the experts don’t know exactly when prices will bottom out or how high they will get. If you buy or sell at the wrong moment, it could be costly.

Also, short-term investing outlooks can be riskier. Stocks that have the potential for short-term gains aren’t always the healthiest investments overall, and there’s a chance they may not recover from a market downturn. If you put a lot of money into short-term investments in the hopes of making a quick buck, you could lose more than you gain if those stocks fail.

A safer way to make money during periods of volatility

The good news is that it is possible to make money during a bear market, and it’s easier than you might think. The key is to invest in strong companies and hold those stocks for the long term –regardless of what the market is doing.

Strong stocks from healthy companies are far more likely to recover from periods of volatility. That means no matter how far stock prices fall, you can rest easier knowing your investments have a good chance of bouncing back when the market inevitably recovers.

By holding your stocks for the long term, it also won’t matter how many ups and downs the market experiences on its road to recovery. You don’t need to predict how stock prices will fluctuate like you would if you were timing the market, because all that matters is that your investments see positive returns over time.

Historically, the market has seen positive long-term returns. In fact, in the last two decades alone, the S&P 500 is up more than 150%. That’s despite several major downturns, including the dot-com meltdown, the Great Recession, the COVID-19 crash in 2020, and the current slump.    

^SPX data by YCharts

While nobody knows exactly how the market will perform in the coming weeks or months, we do know that over the long run, it will experience positive average returns.

There are never any guarantees when it comes to the stock market. But by investing in quality stocks and holding your investments for the long term, it’s far more likely you’ll generate wealth despite all of the ups and downs along the way. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Can you make money during a bear market? It depends appeared first on The Motley Fool Australia.

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• This ASX All Ords share dumped 50% last week, now a director is buying up big
• No deal: Why ASX 200 coal share Coronado is sinking today
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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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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