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ASX shares are down again today. The S&P/ASX 200 Index (ASX: XJO) is currently in the red by 1.31%.

Yet expert investors are scouring the market for opportunities. One of these is Andrew Mitchell from Ophir Asset Management, which runs a few different funds including Ophir High Conviction Fund (ASX: OPH).

Speaking to The Australian, Mitchell outlined the problems the ASX share market is seeing, the types of companies he’s avoiding, and whether it’s time to start investing yet.

Why is the ASX share market being pummelled?

The main problem boils down to inflation, caused by various factors including the impacts of the COVID-19 pandemic and the Russian invasion of Ukraine.

There has been plenty of selling action by investors recently but, according to Mitchell, there “isn’t sufficient evidence” to suggest that we’re at the recovery stage yet for ASX shares. He said he wouldn’t be surprised to see a bear market rally. In other words, a short-term rise in shares.

Investors also have to contend with the conundrum of how hard central banks will have to go to bring inflation back under control. Mitchell said this to The Australian:

The global economy is slowing and inflation is stubbornly high. It would take a brave person to say the share market is out of the woods at the moment. Although some indicators suggest market sentiment is almost as pessimistic as mid-June, we’re seeing increased signs of economic stress, including the jump in UK government bond yields on Friday and the spike in spreads on US junk bonds.

The market is focused on core inflation. How much does the Fed need to lift rates before they are satisfied that aggregate demand will slow? We are all hopeful for a Fed pivot, but with their credibility on the line they may talk tough for longer than everyone expects.

For the US economy, he’s expecting this inflation fight to end in recession. He contends the Fed will “likely go too far” because inflation is the central bank’s “number one priority, growth is a far second”.

ASX shares to avoid

The investment style of Ophir means it’s willing to look at most sectors for opportunities.

In terms of investments to avoid, Mitchell doesn’t want to invest in businesses with little pricing power, nor those carrying a lot of debt.

He thinks that while the ASX share market has already experienced the sell-off, investors will also start seeing companies issuing earnings downgrades.

Ophir is “very cautious” on consumer discretionary businesses, companies leveraged to the housing market, and financials. It believes they may not recover until inflation is “well under control”. This may mean that a recovery isn’t seen until inflation is below 2%. This will likely also mean a reset of corporate earnings expectations.

According to Ophir research, over the past 16 bear markets, the share market has bottomed six months before corporate earnings do.

Where are the opportunities?

While he didn’t name specific ASX shares, Ophir is looking for businesses that have good management and can grow “no matter what”.

It believes businesses making acquisitions at this time could also be interesting. On that point, Mitchell said:

Historically, times like this are the best for making money. You just need nerves of steel. We’re focused on companies that are making great acquisitions now that the market won’t acknowledge because it’s obsessed with only the most defensive businesses.

He also wants to find businesses that have been harshly sold off, while their peers haven’t been punished as severely.

Ophir also suggests that choosing good cash-generating businesses will lead to good results. The idea is that the best businesses will emerge stronger than weak competitors.

At 30 June 2022, the five largest holdings (in alphabetical order) in the Ophir High Conviction Fund were: AUB Group Ltd (ASX: AUB), EBOS Group Ltd (ASX: EBO), NIB Holdings Limited (ASX: NHF), Omni Bridgeway Ltd (ASX: OBL), and Resmed (ASX: RMD).

The post ‘Historically, times like this are the best for making money’: expert appeared first on The Motley Fool Australia.

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More reading

• Why BHP, Costa, Link, and Syrah shares are dropping
• Why is the Woodside share price tumbling 5% on Monday?
• Why Altium, Greenwing, Superloop, and Universal Store shares are racing higher
• Why Warren Buffett loves this US stock
• Investing in this ETF right now could make you a millionaire retiree

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 ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed Inc. The Motley Fool Australia has recommended Austbrokers Holdings Limited and NIB Holdings 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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The S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a sizeable decline. In afternoon trade, the benchmark index is down 1.3% to 6,490.7 points.

Four ASX shares that are falling more than most are listed below. Here’s why they are dropping:

BHP Group Ltd (ASX: BHP)

The BHP share price is down almost 5% to $36.38. Investors have been selling BHP and other mining shares on Monday amid concerns that rising interest rates could cause a global recession. This could lessen demand for commodities and put pressure on prices. The S&P/ASX 200 materials index is down 4.75% this afternoon.

Costa Group Holdings Ltd (ASX: CGC)

The Costa share price is down over 13% to $2.20. This follows the shock announcement of the exit of Costa’s CEO after just 18 months in the top job. According to the release, Sean Hallahan will step down with immediate effect and be replaced on an interim basis by former CEO, Harry Debney.

Link Administration Holdings Ltd (ASX: LNK)

The Link share price is down 9% to $3.00. Investors have been selling this administration services company’s shares after it confirmed that the $4.81 per share takeover by Dye & Durham has now collapsed. One positive is that the company will now pay a special dividend to shareholders. It is also looking for other way to unlock value.

Syrah Resources Ltd (ASX: SYR)

The Syrah share price has crashed 21% to $1.51. This has been driven by news that Syrah’s Balama Graphite Operation in Mozambique has been interrupted by illegal industrial action by a small contingent of local employees and contractors. Management advised that it is working to restore operations as soon as possible.

The post Why BHP, Costa, Link, and Syrah shares are dropping appeared first on The Motley Fool Australia.

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More reading

• BHP share price dips 4% in miserable Monday for ASX 200 miners
• Costa share price craters 12% as CEO walks
• Why BHP might still have a chance at acquiring OZ Minerals shares
• Link share price crashes 11% after takeover collapse
• BHP shares: Boring or beautiful?

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 Link Administration Holdings Ltd. The Motley Fool Australia has recommended COSTA GRP FPO. 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 in the red on Monday.

At the time of writing, the energy producer’s shares are down 5.57% to $30.01.

This represents a fall of 9% in the past week and the lowest level since 31 May this year.

Let’s take a look at what’s happening with Woodside and the market.

Woodside shares tank as oil price slides

Investors are dragging down the Woodside share price as oil prices continue to slump.

Currently, the price of West Texas Intermediate (WTI) and Brent crude are fetching at US$78 and US$85 per barrel, respectively.

Fears regarding slower economic growth and a possible recession in Europe have spooked oil markets today.

This comes as the Russian war in Ukraine escalates to a new level.

Russian President Vladimir Putin ordered a partial mobilisation of 300,000 men to the front lines in Ukraine. Notably, this is the first mass draft in Russia since World War II.

Putin also stated he will use any means at his disposal to defend Russian territory, which is likely to include captured Ukrainian soil in the Donbas region. Most analysts are interpreting this as a thinly veiled threat to use nuclear weapons to hasten accomplishing his strategic objectives.

And with the US Fed Reserve lifting interest rates by 75 basis points last week, markets are reacting to the move.

In fact, some economists are calling the tug of war the “Powell vs Putin” battle, referring to US Fed Reserve chair, Jeremy Powell.

Where to next for oil prices?

Last week, OPEC issued its monthly oil market report forecasting that world oil demand growth in 2022 remains unchanged at 3.1 million barrels per day (mb/d).

This is due to still-solid economic performance in major consuming countries, as well as potential improvements in COVID-19 restrictions and reduced geopolitical uncertainties.

Looking further ahead, the forecast for world oil demand growth in 2023 is expected to be at 2.7 mb/d.

Woodside share price summary

Despite slumping today, it has been a solid 12 months for the Woodside share price, up 35%.

The company’s shares reached a 52-week high of $36.68 in late August on the back of multi-year high oil prices.

In terms of market capitalisation, Woodside is the largest energy company on the ASX with a valuation of approximately $60.34 billion.

The post Why is the Woodside share price tumbling 5% on Monday? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• 2 surprising ASX shares to buy for the energy transition: Wilsons
• Could this nation-first action make an investment in Woodside shares cleaner?
• 5 things to watch on the ASX 200 on Friday
• Could international demand keep boosting Woodside shares for the next 20 years?

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

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a disappointing decline. At the time of writing, the benchmark index is down 1.2% to 6,494.1 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are rising:

Altium Limited (ASX: ALU)

The Altium share price is up 3.5% to $35.04. This is despite there being no news out of the printed circuit board design software provider. However, it is worth noting that a number of tech shares are avoiding the market selloff and pushing higher. This has led to the S&P/ASX All Technology Index rising 0.45% today.

Greenwing Resources Ltd (ASX: GW1)

The Greenwing share price is up a massive 51% to 37 cents. This morning this lithium explorer announced an investment by electric vehicle company Nio. The automaker is paying $12 million to Greenwing to subscribe for 21,818,182 shares at an issue price of 55 cents per share. Nio has also agreed to a call option agreement that could see it gain up to 40% of the San Jorge Lithium Project.

Superloop Ltd (ASX: SLC)

The Superloop share price is up 11% to 64.5 cents. Investors have been buying this telco’s shares after it announced the acquisition of VostroNet for $35 million in cash and shares. VostroNet is a leading infrastructure owner and internet provider delivering high speed FTTP and intelligent WiFi networks for multi-dwelling and broadacre developments serviced with VostroNet fiber networks.

Universal Store Holdings Ltd (ASX: UNI)

The Universal Store share price is up 3% to $4.80. This has also been driven by an acquisition announcement. Universal Store has signed an agreement to acquire casual youth fashion retailer Thrills for $50 million. The consideration will comprise $17.5 million in cash, $17.5 million in shares, and a notional amount of $15 million in deferred variable consideration. Management expects the deal to be highly earnings per share accretive.

The post Why Altium, Greenwing, Superloop, and Universal Store shares are racing higher appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX lithium share is exploding 88% higher on a deal with EV maker Nio
• Not all ASX 200 shares are getting hammered today. Here are some winners
• 2 top ASX growth shares that experts say are buys
• 2 fantastic ASX 200 shares analysts say are buys
• Why I’m seriously considering buying these ASX shares following today’s market crash

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 Altium and SUPERLOOP FPO. 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.

A five-year chart of The Kraft Heinz (NASDAQ: KHC) stock offers a near-perfect reversed reflection of the S&P 500 index’s performance over the same time frame. Share prices of the food product giant have declined nearly 57% over the last five years, underperforming the 46% gain from the index. But Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK.A)(NYSE: BRK.B) has held to its shares in the company throughout that half-decade.

Berkshire is one of the company’s largest shareholders. As of March 2022, Berkshire owned 26.6% of Kraft Heinz. 

Why has Buffett continued to hold an underperforming stock? Well, for one thing, it’s not like there haven’t been any good reasons to sell. Here are a few things that went wrong following the merger between Kraft Foods and H.J. Heinz:

• Kraft saw its market share erode against the growth of private-label brands, leading to a decline in sales.
• In 2018, the company disclosed an SEC investigation into its accounting policies over supplier agreements.
• Kraft also cut its quarterly dividend to address more than $30 billion of long-term debt it held as of 2018. 

Most investors would have sold Kraft Heinz long ago, but not Buffett. In early 2019, Buffett told CNBC he would be happy to own the stock 10 years from now. 

Buffett has cut loose several stocks over the past several years that failed to perform to his expectations. He closed Berkshire’s position in IBM in 2017, after he bought $10.8 billion worth of shares in the computer hardware maker in 2011. But there is clearly something about Kraft Heinz that he values. Let’s look at three possible reasons why he has remained patient with this one.

1. Buffett likes to do business with people he trusts

Buffett admitted in 2019 he misjudged the competitive position of packaged food brands against Wal-mart Stores, Inc. (NYSE: WMT) and other retailers’ efforts to promote their own private labels. That was a big reason why Kraft saw its sales and profits decline through 2019. 

However, Buffett went into the Kraft Heinz merger in 2015 with a valued partner. Berkshire and 3G Capital own a combined 42% of Kraft Heinz. Buffett has been friends with 3G founder Jorge Paulo Lemann for many years. He first met Lemann while serving on the board at Gillette before it was acquired by Procter & Gamble. 

3G Capital has a long record of doing deals across industries and improving performance at the businesses it controls. The Brazilian investment firm famously orchestrated the combination of Anheuser-Busch Inbev in 2008. Buffett has always believed in doing business with people you trust, and that certainly applies to his investment in Kraft Heinz.

2. Kraft has “very, very strong brands”

While certain Kraft brands, such as Oscar Mayer, Jell-O, and CapriSun, no longer have the competitive edges they did many years ago, brands like H.J. Heinz, Kraft Mac & Cheese, Lunchables, and Philadelphia cream cheese still generate strong sales. Buffett has called these “very, very strong brands.” 

Indeed, these products have remained immune to the pull of private labels. Over the last three years, they delivered annualized growth in adjusted sales of 8%. 

3. Sales are growing under Kraft Heinz’s new CEO

To turn things around starting, Kraft Heinz turned to 3G’s farm team. In 2019, Kraft appoint former Anheuser-Busch Inbev’s Chief Marketing Officer, Miguel Patricio, as CEO. The results have been outstanding.

Patricio sold off underperforming brands, made improvements to Kraft’s packaging, marketing, and operating efficiency, and paid down debt. Not only have adjusted sales improved, but Kraft demonstrated excellent pricing power in this inflationary environment.

One reason Buffett favors investing in top brands is the ability to raise prices over time to offset the long-term erosion to shareholder returns caused by inflation. In the second quarter, Kraft reported a 10% year-over-year increase in adjusted sales, completely driven by higher selling prices. 

Kraft Heinz stock has outperformed the S&P 500 in 2022

Kraft appears to be finally performing to Buffett’s expectations. Under Patricio, Kraft stock is up 28% since the end of June 2019, including dividend reinvestment. That puts Kraft stock just ahead of the S&P 500’s 23.4% return over that three-year period. 

Kraft stock is outperforming the market year-to-date, down 6.6% compared to the S&P 500’s decline of 23.3%. Given Kraft’s improved business performance, Buffett probably won’t be selling out anytime soon. 

It’s not too late to buy Kraft Heinz stock. The business is positioned for more growth under Patricio. The stock also pays a dividend yield of 4.77%, and trades at a delicious price-to-earnings ratio of 12.6 based on this year’s earnings estimates, which is a discount to the S&P 500’s forward P/E of 17. 

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

The post Why Warren Buffett loves this US stock appeared first on The Motley Fool Australia.

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More reading

• Here’s why splitting up Amazon could mean huge returns for shareholders
• 3 doses of Warren Buffett wisdom I think all ASX investors need right now
• Got $1,000? 2 top Warren Buffett stocks to buy for the long term
• Should you really buy stocks now or wait a while longer?
• Which of these Warren Buffett stocks is the better buy?

John Ballard 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 Walmart Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended The Kraft Heinz Company. 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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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.

With the market down substantially from its all-time highs, the benefits of dollar-cost averaging into a low-cost, broad-based stock index fund are becoming quite clear. By making regular investments every payday in this market, each dollar you’re investing buys that many more shares while stocks are down. That may not seem like much benefit now, but it means you’ve got that many more shares available to compound in any recovery that follows.

It’s with that backdrop that making regular investments in the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) starting now could make you a millionaire retiree. It’s a process that takes time no matter what the market is doing, which is a great reason to consider starting those investments now, even if the market continues to fall.

Why invest in the SPDR S&P 500 ETF Trust?

The SPDR S&P 500 ETF Trust is a low-cost index ETF that attempts to track the S&P 500 index, which is often used as a proxy for the overall US stock market. With itd expense ratio of 0.09%, investors in that ETF can get returns that nearly perfectly match that index, while losing almost nothing to fund management fees.

That combination of stock market like returns with very low internal costs makes the SPDR S&P 500 ETF trust a simple, one-stop shop for investors. It’s especially potent for investors who don’t want or are otherwise unable to put a lot of time and effort into digging through financial reports to pick individual stocks. When you add the fact that index investing tends to beat funds managed by Wall Street’s best and brightest over time, the SPDR S&P 500 ETF Trust become an even more compelling option.

How long will it take to become a millionaire?

The path from $0 to $1 million depends heavily on two key factors: how much you’re able to invest every month and what rate of return you earn along the way. The good news is that if you’ve got a long enough time horizon, reaching millionaire status by retirement age is feasible, even for people with modest incomes.

The following table shows how many years it takes to reach that millionaire status, depending on what you can save each month and what annual rate of return you earn along the way.

Monthly Investment	10% Annual Returns	8% Annual Returns	6% Annual Returns	4% Annual Returns
$2,200	15.7	17.5	19.8	23.1
$2,000	16.5	18.4	20.9	24.6
$1,500	18.9	21.3	24.5	29.3
$1,000	22.4	25.5	29.9	36.7
$500	28.8	33.4	40.1	51.0
$300	33.7	39.4	48.0	62.5

Data source: author.

The top end of that savings rate — $2,200 per month — represents a savings rate that can be contributed to tax-advantaged, retirement-focused accounts for most people. Workers under age 50 can generally contribute up to $20,500 per year in a company-sponsored retirement plan like a 401(k). They can also typically sock away up to $6,000 per year in their own IRA.  (The contribution limits are even higher for workers ages 50 and up. )

The bottom end of that savings rate — $300 per month — works out to around $10 per day. Even at that savings level, as long as you invest consistently throughout the length of a typical working career, you’ve got a decent shot at reaching millionaire status by the time you retire.

Get started now

Regardless of where you are in your career, you’ll never again have more time before you retire than you do right now. That makes today a great day to get your plan in place. The sooner you get started, the more of the cells in that table will be within your reach, improving your chances of retiring a millionaire.

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

The post Investing in this ETF right now could make you a millionaire retiree appeared first on The Motley Fool Australia.

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More reading

• Why Warren Buffett loves this US stock
• Flight Centre share price tumbles to new 52-week low on Monday
• Arafura share price dives 13% in Monday’s mining selloff
• Why is the Allkem share price dumping 5% today?
• How to think about risky stocks when you’re approaching retirement

Chuck Saletta 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.

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

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The Flight Centre Travel Group Ltd (ASX: FLT) share price has been caught up in today’s sell-off, tumbling to its lowest point in more than 12 months.

The travel agent’s stock plunged 2.9% to $14.90 earlier today, marking a new 52-week low. Indeed, that’s the lowest the stock has traded at since August 2021.

Fortunately, the Flight Centre share price has since partly pulled out of its nosedive. It’s currently trading 0.46% lower at $15.28.

The S&P/ASX 200 Index (ASX: XJO) has also seemingly overcome the worst of the day’s tumble.

It’s currently down 1.16% at 6,498.3 points. Earlier today it fell to 6,435.6 points – just 0.4% higher than its own 52-week low.

Let’s take a closer look at the ASX 200 travel favourite’s latest 52-week low.

Flight Centre stock nose-dives to new 52-week low

The market’s most shorted share has tumbled to a new 12-month record low on Monday after its short interest jumped to 15% last week. But the Flight Centre share price isn’t alone in inking a new long-forgotten low today.

That of Corporate Travel Management Ltd (ASX: CTD) slumped 2.5% to $17.20 earlier today – marking its lowest point in more than a year. It has since rebounded to trade 0.7% higher at $17.76.

Meanwhile, the Qantas Airways Limited (ASX: QAN) share price is down 1% to $5.085 while that of Webjet Limited (ASX: WEB) has fallen 1.8% to $5.

The Flight Centre share price’s latest low point comes despite the Aussie tourism industry’s apparent rebound.

The Australian Competition and Consumer Commission (ACCC) recently found that the popularity of many domestic travel routes surpassed pre-pandemic levels over the winter months.

And experts are tipping such trends to continue.

HSBC chief economist for Australia, New Zealand, and global commodities Paul Bloxham shared his belief that Aussies and Kiwis’ return to travel will help stave off the worst of a global economic slowdown in their respective nations ahead of his keynote presentation at Flight Centre corporate’s Illuminate 2022 conference. He said:

Travel is going to be a bright spot in the current challenged world.

Households spent less during the pandemic and the country’s unemployment rate has been at its lowest since the mid-1970s. As such, Australians have saved over $250 billion and are ready to deploy those funds.

Now that the world is reopening, there is a strong appetite for travel among the population and we expect to see a continued increase in travel activity, particularly domestically.

Flight Centre share price snapshot

It likely comes as no surprise that the Flight Centre share price has been struggling so far this year.

The stock has tumbled 18% year to date. It has also dumped 28% since this time last year.

For context, the ASX 200 has fallen 14% since the start of 2022 and 12% over the last 12 months.

The post Flight Centre share price tumbles to new 52-week low on Monday appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• Could this be good news for Flight Centre shares?
• Here are the 10 most shorted ASX shares
• Here’s why the Flight Centre share price isn’t all that it seems
• Why have Flight Centre shares been the most shorted on the ASX every week so far in 2022?

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 recommended HSBC Holdings. The Motley Fool Australia has recommended Corporate Travel Management Limited, Flight Centre Travel Group Limited, and Webjet 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 Arafura Resources Limited (ASX: ARU) share price is taking a beating today amid a harsh day for the ASX materials sector.

Shares in the rare earths developer are currently 13.16% lower at 33 cents apiece.

The S&P/ASX 200 Materials Index (ASX: XMJ) is one of the worst-performing sector indices this afternoon, currently down 4.58%.

It should come as no surprise that other ASX mining shares are also taking a beating. St Barbara Ltd (ASX: SBM) is down 9.15% while Emerald Resources NL (ASX: EMR) is trading 8.04% lower.

The S&P/ASX 200 Index (ASX: XJO) is also having a rough start to the week, down 1.19%.

What’s surprising is there’s no news from Arafura — or about the materials sector more broadly — to make sense of the sell-off today. But let’s recap some recent events for the company.

What’s going on with the Arafura share price?

Arafura’s latest update on Tuesday last week did nothing to help boost investor sentiment. The rare earths company reported a $35 million loss for FY22, up 448.7% from FY21.

Most of the costs incurred over this period went to getting the company’s Nolans project ready for production. The first ore commissioning of neodymium (NdPr) is expected to be seen in May 2025.

The report said the company’s long-term expectation is to supply around 5% of the world’s NdPr oxide demand.

Some good news for Arafura was that it was included in the S&P/ASX 300 Index (ASX: XKO) on Monday last week due to changes in the company’s market capitalisation. The share price shot up more than 8% on the day.

On a broader level, Arafura’s shares have moved in step with the market as a whole. Inflation and rising interest rates have put pressure on equities and since Arafura is still scaling its production, this may be affecting investor sentiment.

Arafura share price snapshot

Despite today’s losses, the Arafura share price is up almost 60% year to date. Meanwhile, the S&P/ASX 200 Index is down around 13% over the same period.

The company’s market capitalisation is around $586 million.

The post Arafura share price dives 13% in Monday’s mining selloff appeared first on The Motley Fool Australia.

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More reading

• Arafura share price lags All Ords on Tuesday amid $35 million loss
• Why is the Arafura share price rocketing 8% today?
• 3 ASX All Ordinaries shares having a cracking Monday
• The Arafura Resources share price is down 7% this morning
• Why investors might be getting excited about Arafura shares

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 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 Allkem Ltd (ASX: AKE) share price has found itself in the unloved basket in Monday afternoon trading.

As we march toward the close, shares in the lithium miner are contending with a 5.4% fall. This move takes the global materials company’s share price to $14.05. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is struggling with its own 1.6% bashing today.

Let’s take a look at what might sapping Allkem of its excitement.

Nowhere to hide amid concern

Although the field has improved this afternoon, the broad Australian share market is still in a nervous state. At the time of writing, the materials portion of the Aussie index is nursing a deep 4.4% wound as investors flock to an exit.

Oddly enough, the usual suspects of exaggerated selling — such as the tech and consumer discretionary sectors — are in the green. Whereas, the prolonged commodity euphoria is taking a back seat and cooling off.

The Allkem share price, along with many others, is failing to receive support amid deepening economic fears. A combination of persistent inflation and a hobbled Chinese economy is putting the prospects of a recession front of mind for investors today.

Consequently, money is draining out of energy and commodity investments. If economic conditions worsen, it is likely that commodities and oil will take a hit from reduced demand.

Last week, analysts at investment bank Barrenjoey shared their forecast of a ‘probable’ recession. While the team highlighted it would probably be short, many investors are choosing not to hang around to find out.

Could the Allkem share price be attractive?

Where there is a seller, there’s a buyer… and with over 2.6 million Allkem shares changing hands today, some investors are deciding to load up.

While we can only speculate, one fundie that might be making the most of the Allkem share price today could be Wilsons. Recently, the private wealth manager named Allkem as its “preferred” exposure to the lithium sector.

Specifically, the team at Wilsons believes there could be more earnings upside for the lithium player. If that were to be, today’s valuation could end up looking attractive.

The Allkem share price has rallied 28% since the beginning of 2022. This is roughly on par with other lithium names such as Pilbara Minerals Ltd (ASX: PLS) so far this year.

The post Why is the Allkem share price dumping 5% today? appeared first on The Motley Fool Australia.

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More reading

• Our 4 favourite lithium ASX shares right now: Wilsons
• 2 stellar ASX growth shares that experts say are buys
• Allkem share price sinks 5% amid Mexico lithium deposit speculation
• Here’s which ASX lithium shares investors have been loading up on this month
• Why is the Sayona Mining share price in the doldrums this week?

Motley Fool contributor Mitchell Lawler 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.

Retiring into a potential recession isn’t what anyone would want, but there are ways to maintain some control over your portfolio in times of economic decline. Making some big-picture adjustments to your investments in the years leading up to retirement can pay big dividends down the line, all while creating additional security for your spending plan. 

Let’s think further about how you can protect yourself if you’re feeling some anxiety leading into your senior years.

The threat of sequence risk

The goal for most people during their working careers is to accumulate wealth. In the years leading up to retirement, the goal tends to center around preserving wealth.

Since we can reasonably estimate that the economy could be headed for some difficult years, modifying your strategy going into retirement is even more necessary. Further, given the vast number of variables that go into retirement planning (i.e., how long you think you’ll live, how much you expect to spend, etc.), it’s important to create certainty around money to the extent possible. 

One of the less commonly discussed topics in retirement planning is sequence risk (sometimes called “sequence-of-returns risk”). Put simply, sequence risk is the potential for running into a poor string of returns in the years after you stop working, which can then lead to portfolio failure in the long run.

In other words, if you experience steep portfolio declines in the early years of retirement — when you’ve already started drawing on the money to cover living expenses — you run a higher risk of running out of money than if you were to retire into a bull market. 

Addressing sequence risk

For example, say you maintained an 80% stock/20% bond asset allocation throughout your working career. Given the raging bull market of the 2010s, this allocation performed particularly well.

However, if retirement is on the horizon, you might think about briefly moving to a 20% stock/80% bond asset allocation. Rethinking your asset allocation can help shield against the threat of poor returns in the early years of retirement, which present a substantial threat to retirement success. 

The easiest way to go about handling sequence risk is by increasing your share of lower-risk investments (like bonds and cash), relative to stocks. As 2022 has shown us thus far, bonds are not entirely risk free, but they do generally come with a lower risk of extreme drawdown — especially relative to stock investments. Even though you might not get big returns out of bonds, they do exist as a valuable risk-control measure that offer at least some diversification benefit. 

A numerical example

Say you started your retirement in 2022 with a $500,000 portfolio and an 80% stock/20% bond asset allocation. After the stock market lost 20% and the bond market lost 10%, you’d be left with $410,000. From there, you’d have to withdraw money for expenses, which could have a deleterious effect on the long-run viability of your portfolio. 

In an alternative world, imagine you started with the same $500,000 portfolio but a more conservative 20% stock/80% bond asset allocation. In this example, after the stock market again lost 20% and the bond market lost 10%, you’d be left with $440,000. This is still a loss, but an improvement from the riskier portfolio used in the first scenario. 

While this is by no means a way to shield your portfolio completely, it does provide some cushion in the event stocks continue their slide for the next few years.

Retiring isn’t easy but possible

The reality remains that retirement is a financially challenging milestone for the grand majority of workers. But between Social Security, personal savings, and (increasingly) active income, retirement is absolutely achievable.

As you get closer to retirement, consider the risks at hand and the magnitude of stock market loss you’d be willing to tolerate. From there, adjust your overall asset allocation as necessary, but also be sure to keep a healthy cash reserve on hand. 

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

The post How to think about risky stocks when you’re approaching retirement appeared first on The Motley Fool Australia.

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More reading

• Why is the Allkem share price dumping 5% today?
• Qantas share price follows ASX 200 lower despite Jetstar CEO news
• Firefinch share price remains suspended following cancelled cap raise
• Guess which ASX lithium share is exploding 88% higher on a deal with EV maker Nio
• Why changes could be afoot for ASX dividend shares and franking credits

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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