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

Catalyst Metals Ltd (ASX: CYL)

The Catalyst Metals share price is up 1% to $3.57. Investors have been buying the gold miner's shares today after it released an exploration update. Management advised that it has 10 rigs on site at the Plutonic Belt, drilling 320,000 metres at a cost of $40 million over the next 12 months. This could be worth it. It notes that the belt has a very large mineral endowment and a history of high quality deposits. Investors appear optimistic that the company could be sitting on top of something very lucrative.

Hansen Technologies Limited (ASX: HSN)

The Hansen Technologies share price is up over 1% to $5.55. This has been driven by the release of a trading update from the billing technology company this morning. Management has reaffirmed its guidance for revenue of $398 million to $405 million and underlying EBITDA of $92 million to $101 million. In addition, it revealed that it has signed a master agreement with VMO2 to licence Hansen's cloud-native Suite for Communications, Technology & Media. The agreement has an initial term of five years with associated revenue of approximately $50 million.

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas Rare Earths share price is up 3% to $6.52. This is despite there being no news out of the rare earths producer on Monday. Though, it is worth noting that Gina Rinehart's Hancock Prospecting has been increasing its stake in the company in recent sessions. On Friday. a change of interests of substantial holder notice showed that Hancock Prospecting has lifted its shareholding from 7.14% to 8.21%. The last purchase was made on 28 January when Hancock bought 764,700 shares at $6.45 per share.

Selfwealth Ltd (ASX: SWF)

The Selfwealth share price is up 5.5% to 28 cents. This morning, the company revealed that it has received a non-binding indicative proposal from Svava to acquire it for $0.28 cash per share by way of a scheme of arrangement. Svava has also notified Selfwealth that it has acquired beneficial ownership of approximately 43.4 million Selfwealth shares, representing approximately 18.8% of shares on issue. Svava, through its Syfe brand, operates wealth management platforms in Singapore, Australia, and Hong Kong. This offer is ahead of one that is already on the table.

The post Why Catalyst Metals, Hansen, Lynas, and Selfwealth shares are rising today appeared first on The Motley Fool Australia.

Investors bought and sold more Fortescue Ltd (ASX: FMG), BHP Group Ltd (ASX: BHP), and Mineral Resources Ltd (ASX: MIN) mining shares than any other ASX stock last month.

The data shows that Fortescue was the most traded ASX stock, but only 55.2% of trades were buy orders.

Selfwealth noted the first net outflow of investment dollars into Fortescue shares in six months. 

Investors on the trading platform are also increasingly trading in Mineral Resources stock. In September, the ASX iron ore and lithium stock was the sixth most traded share. In August, it was ranked 14th.

Speculation that the iron ore price may rise due to new Chinese stimulus saw ASX iron ore shares rallying at the beginning of the month. They then fell when further stimulus did not eventuate.

Company news may also have played a role in the higher trading levels for these ASX mining shares.

Mineral Resources shares were especially volatile following revelations that former CEO Chris Ellison had failed to declare some of his income to the Australian Taxation Office and had been fined for this last year.

Meantime, BHP released a positive 1Q FY25 update and announced a $47.9 billion legal settlement over the Samarco dam failure. Fortescue also issued a quarterly update last month.

Here's what happened to the prices of these 3 ASX mining shares in October:

• Fortescue shares fell 7.3%
• BHP shares fell 7.22%
• Mineral Resources shares fell 24.29%

Let's check out the other top 10 most traded ASX shares last month.

ASX mining stocks top the list of most-traded shares

These are the top 10 most traded ASX shares in October by volume (including both buy and sell orders).

The percentage of buy orders gives an indication of investors' conviction on each ASX share.

Top 10 most traded US stocks in October

Chip maker NVIDIA Corp (NASDAQ: NVDA) was the most traded US stock for a second month.

The Nvidia share price lifted by 9.32% in October.

This may have reflected investors' desire to buy Nvidia stock ahead of the company's next lot of quarterly results, which we reported on yesterday.

Here are the other top 10 most traded US stocks in October among Selfwealth investors.

The post 3 ASX mining stocks topping the most-traded list in October appeared first on The Motley Fool Australia.

At the time of writing, the stock is up 75% on the day and fetching 21 cents apiece.

The offer has caught the attention of investors, who seem keen to acquire shares in the hope that the takeover bid will be approved.

Zooming out, SelfWealth shares were down 27% this year to date up until the open on Wednesday.

Let's dive into the details behind this offer and what it means for shareholders.

ASX small-cap stock jumps on takeover offer

Bell Financial Group has proposed to acquire 100% of the ASX small-cap stock through a scheme of arrangement.

The offer is made at 22 cents per share, valuing the company at approximately $51 million.

This is an 83% premium to SelfWealth's closing price of 12 cents per share yesterday.

Management says Bell made its first introductions on the offer back in October. Discussions have since been underway.

Bell has also provided a scrip option for SelfWealth shareholders, allowing them to take the payout in cash or Bell shares, giving investors some flexibility in realising their gains.

SelfWealth's board has responded positively to the offer, noting it is "highly attractive" and can add "significant value" for shareholders.

Subject to Selfwealth and Bell agreeing an implementation deed on terms acceptable to Selfwealth, it is the Selfwealth Board's intention to unanimously recommend that Selfwealth shareholders vote in favour of the Bell Proposal, in the absence of a superior proposal and subject to the independent expert concluding (and continuing to conclude) that the Bell Proposal is in the best interests of Selfwealth shareholders.

The company says shareholders don't need to do anything as it relates to the offer. Given there's plenty for both parties to digest, there's no guarantee it will even go ahead.

Meanwhile, the ASX small-cap stock's chair, Christine Christian, said the offer was "compelling" for shareholders.

The Board and Management of Selfwealth view the Bell Proposal as compelling for Selfwealth's shareholders, team members and clients.

It would deliver significant value to shareholders, with an attractive cash price and the potential to share in possible synergies for those electing to receive Bell shares. We also believe our clients will benefit from Bell's diversified wealth management offering

Why is this ASX small-cap stock so attractive to Bell?

Bell Financial's bid to acquire SelfWealth is part of its expanding technology & platforms business. Integrating SelfWealth customers into its own network could increase earnings. According to Bell Financial:

BFG shareholders will benefit through increased scale in BFG's online broking business and cost
synergies. The acquisition is expected to be materially earnings per share accretive post-integration, and adds almost 130,000 active portfolios, increasing BFG's sponsored holdings by $11 billion to $94 billion.

Bell Financial chair Brian Wilson expressed enthusiasm for the acquisition.

We are excited by the prospect of welcoming SelfWealth's clients and team to Bell. Clients of both businesses will benefit from a superior user experience through leveraging the respective strengths of both businesses, and access to the broader array of products and services available within BFG.

The offer remains subject to customary conditions. These include the agreement of a binding implementation deed and a unanimous recommendation from SelfWealth's board, to name a few.

Bell and SelfWealth have also entered an Exclusivity Deed, allowing Bell an exclusive negotiation period.

The ASX small-cap stock's board won't be able to entertain competing offers during this time.

Foolish takeaway

This ASX small-cap stock has exploded on Wednesday on news of a potential takeover from Bell Financial.

The premium to its last closing price is the main talking point, which could see shareholders nab quite the profit if the deal is approved. This could reverse the fortunes of shareholders who were down 25% in the 12 months to yesterday's close.

The post This ASX small-cap stock is exploding 75% on takeover news! appeared first on The Motley Fool Australia.

In FY24, one in four (or 26%) trading orders placed via the Selfwealth Ltd (ASX: SWF) platform involved these baskets of stocks.

The Selfwealth report highlighted that investors demonstrated a higher buying conviction for ASX ETFs compared to individual shares, with seven out of 10 ETF trading orders being buy transactions.

This may indicate investors prefer ETFs to individual stocks for long-term investment.

Selfwealth said:

[ETFs] also commanded the highest buying conviction, and by some margin, with the buy-to-sell ratio being exceptionally high at 69.6%.

… this result is indicative of long-term interest in ETFs, whereas traditional market sectors were more susceptible to short-term trading activity. 

The rest of the trading activity (74%) in FY24 involved individual ASX shares or international shares.

Based on the Selfwealth data, it's fair to say that investors still prefer individual stocks to ASX ETFs overall.

Selfwealth analysed the share trading activity by market sector to identify the types of stocks investors were most interested in over FY24.

It found ASX materials shares had the most trading activity at 25.1% of buy and sell orders combined.

ASX lithium share Pilbara Minerals Ltd (ASX: PLS) attracted the most trading activity in FY24, followed by iron ore shares BHP Group Ltd (ASX: BHP) and Fortescue Ltd (ASX: FMG).

Why are more investors buying ASX ETFs?

One of the greatest benefits of ETFs is instant diversification in a single trade, costing a single brokerage fee. 

Selfwealth said the ETFs bought and sold by its clients last financial year spanned various sectors, industries, and thematics. 

The popularity of ETFs among Selfwealth clients mirrors broader market trends.

According to Betashares, ASX and CBOE ETFs were worth $205.3 billion in assets under management at the end of FY24.

The co-founder of Betashares, Ilan Israelstam, said:

The Australian ETF industry ended the financial year on another record high, reaching the $200 billion mark in total assets under management after recording robust growth for the half year.

The ETF industry continues to go from strength to strength, as investors increasingly adopt ETFs to build their portfolios.

A net $11 billion was invested in ASX or CBOE ETFs over the first half of CY24. That was more than double the net $4.8 billion invested in the first half of CY23.

This, along with increasing outflows from unlisted managed funds, shows the rising appeal of ASX ETFs.

Examples of popular ETFs

There are 50 issuers of ASX exchange-traded funds, with the biggest providers including Betashares, Vanguard and iShares.

One of the most popular is the Vanguard Australian Shares Index ETF (ASX: VAS).

The Vanguard Australian Shares Index ETF is an index-based ETF that seeks to track the performance of the S&P/ASX 300 Index (ASX: XKO) after fees.

This means investors gain exposure to many blue-chip S&P/ASX 200 (ASX: XJO) stocks. These include BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia Ltd (ASX: CBA), and CSL Ltd (ASX: CSL).

They also get exposure to younger, up-and-coming companies ranked toward the back of the ASX 300, such as Megaport Ltd (ASX: MP1) and Temple & Webster Group Ltd (ASX: TPW).

Selfwealth said the ASX VAS was traded within nearly 11,000 unique customer portfolios in FY24. That was nearly double the number of portfolios that bought the second most popular ASX ETF.

Another reason Aussie investors are embracing ASX ETFs is their easy exposure to international shares.

An example is iShares S&P 500 AUD ETF (ASX: IVV).

The iShares S&P 500 ETF is an index-based ETF that seeks to mirror the performance of the 500 largest US companies comprising the S&P 500 Index (SP: .INX).

The IVV exchange-traded fund is one of the 10 cheapest ETFs on the market.

The post ASX ETFs vs shares: Do investors prefer one over the other? appeared first on The Motley Fool Australia.

The S&P/ASX 200 Real Estate (ASX: XRE) index is now 15.4% higher since 30 October.

Stock markets tend to be much more forward-looking than real life. Perhaps this explains why this frenzy is happening despite CoreLogic data for November showing houses are on the market longer nationally and sales volumes have dived.

Investment platform Selfwealth Ltd (ASX: SWF) this week revealed that ASX real estate shares currently have the strongest conviction of all industries among its investors.

"A key indicator of investor sentiment is the ratio at which they're buying compared to selling," said Selfwealth brand and content lead Robert Marfell. 

"And for the Real Estate sector, our data shows the ratio of buys-to-sells is leagues above all others."

So which property stocks are Australians loving at the moment?

'Being greedy while others are fearful'

Two real estate shares stand out above the rest, according to SelfWealth: Lendlease Group (ASX: LLC) and Goodman Group (ASX: GMG).

"We found that investors bought increasing amounts of both Goodman Group and Lendlease from October to late November this year, far more than any other in the sector," said Marfell.

"The laggard in the sector was Vicinity Centres (ASX: VCX), which saw a sell-off for each quarter of 2023."

Lendlease shares are down 12.9% for the year and have lost a terrible 44% over the past five years.

A poll indicated that many investors are now thinking that LendLease is a bargain at the current price.

"44% of Selfwealth buyers of Lendlease believed the 'stocks were undervalued' while another 14% bought Lendlease 'to align with a target portfolio'," said Marfell.

"The consistent rise in buy trades indicates Selfwealth investors are being greedy while others are fearful."

For industrial property manager Goodman, its stock price has risen 35% in 2023 — so investor interest certainly couldn't be attributed to bargain hunting.

In fact, 24.5% bought in to "align with target portfolio", 20.9% cited diversification, and 19.8% thought Goodman Group's "earnings potential looks good".

It's not just amateur investors going mad for Goodman.

According to CMC Invest, a whopping 11 out of 12 analysts currently rate the stock as a buy.

The post The 2 ASX real estate shares everyone's piling on to right now appeared first on The Motley Fool Australia.

Selfwelath shares are on fire today. The brokerage company closed at 14 cents a share yesterday afternoon. But today, the Selfwealth share price opened at 17 cents and is currently going for 17.5 cents a share, up an extraordinary 25% from yesterday's close.

So what on earth is going on here that has seen Selfwealth add a quarter of its market capitalisation in just a few trading hours?

Well, there's a pretty simple explanation for this monstrous jump in value for the company. This morning, Selfwealth confirmed media speculation that it has received some takeover interest from fellow brokerage firm Stakeshop Pty Ltd, owner of the popular investing and brokerage platform Stake.

Selfwelath told investors that in "recent weeks", it had received a "confidential, non-binding, indicative proposal from Stake to acquire the Company by way of scheme of arrangement at a cash price of 17.5c a share".

The media release didn't beat around the bush when it came to this offer. Here's some of what Selfwealth said:

After careful assessment, the Board of Selfwealth ("Board") formed the view that Stake's incomplete and conditional proposal did not offer appropriate value to Selfwealth shareholders.

Accordingly, the Board decided it was not in the best interests of SelfWealth shareholders to engage in substantive discussions with Stake.

After its maiden profit in FY2023, the Board believes Selfwealth is in a solid financial position with $12.4 million of net cash as of 30 June 2023 and the Company has meaningful growth opportunities.

As such, it's no surprise to see the Selfwealth share price climbing to around the same valuation as what Stake was reportedly willing to fork out for the company on the markets today.

Although Selfwealth wasn't exactly ambiguous in its response today, it will be interesting to see if there are any new developments on this front in the coming weeks and months.

Selfwealth share price snapshot

Although it has been a phenomenal day for Selfwaelth shares today, zooming out, the picture gets a bit dimmer. Even after today's spike in value, the Selfwealth share price remains down 12.5% year to date, as well as down almost 24% over the past 12 months.

The company is also down more than 76% from its previous all-time high of around 75 cents a share that we saw back in late 2020, as you can see below:

The post Why are Selfwealth shares leaping 25% on Friday? appeared first on The Motley Fool Australia.

Investment choices can provide insights into the mood of different investor demographics.

Data from broker Selfwealth Ltd (ASX: SWF) has revealed where investors have been putting their money in FY24 to date, from 1 July 2023 to 7 August 2023.

Most popular trades

Selfwealth has provided a list of ASX shares and investments that millionaire millennials have been trading in. It's sorted by the number of trades rather than the number of units or value of trades so that a few rich investors don't skew the results with large trades.

That said, here are the ASX investments with the most amount of trades:

BetaShares Geared Australian Equity (Hedge Fund) (ASX: GEAR) is an exchange-traded fund (ETF) that's betting on the S&P/ASX 200 Index (ASX: XJO) to rise. It borrows money to amplify the gains (and losses) made by the portfolio. Current gearing is 57%, which to some people may not be a comfortable level of borrowing for their own portfolios.

Global X Ultra Long Nasdaq 100 Hedge Fund (ASX: LNAS) is invested in 100 of the largest businesses on the NASDAQ 100 stock exchange while utilising futures contracts.

BetaShares Australian Equities Strong Bear Hedge Fund (ASX: BBOZ) is an ETF that enables investors to bet that the ASX 200 is going to fall by using futures. It uses leverage, which amplifies the returns and losses. Since its inception in April 2015, the ASX ETF has delivered an average return per annum of negative 20.3% to June 2023.

Vanguard Australian Shares Index ETF (ASX: VAS) is an ETF focused on 300 of the largest ASX shares.

BetaShares Crypto Innovators ETF (ASX: CRYP) is an ETF that's invested in global companies that provide exposure to the cryptocurrency economy. In this portfolio are names like Marathon Digital Holdings, Riot Platforms, and Coinbase Global.

Stanmore Resources Ltd (ASX: SMR) is an ASX coal share that has seen its share price rise to a much higher level than before Russia invaded Ukraine.

Other interesting data points

Looking at the wider millennial cohort, not just the rich ones, the largest number of trades involved ETFs. They were: the VAS ETF, Vanguard Diversified High Growth Index ETF (ASX: VDHG), Vanguard MSCI Index International Shares ETF (ASX: VGS), iShares S&P 500 ETF (ASX: IVV), and Betashares Nasdaq 100 ETF (ASX: NDQ).

Miners made up some of the most popular investments by the wider millennial cohort, including Fortescue Metals Group Ltd (ASX: FMG), Core Lithium Ltd (ASX: CXO), and Pilbara Minerals Ltd (ASX: PLS).

Non-millionaire baby boomers and Gen Xers liked trading in Core Lithium as well. It seems Gen X hasn't been doing much ETF trading. Millionaire baby boomers have, unsurprisingly, been trading a lot in ASX blue chips, and predominately selling the cash ETF Betashares Australian High Interest Cash ETF (ASX: AAA).

Meantime, millionaire Gen X investors have been interested in technology businesses like Advanced Micro Devices, Intel, and Quantumscape.

The post Top ASX shares wealthy young investors are buying right now appeared first on The Motley Fool Australia.

Interestingly, however, companies producing (or aiming to produce) the white metal appear far more popular with everyday investors than with the wealthiest among us.

That's according to new data from investing platform Selfwealth Ltd (ASX: SWF).

Just over 1,200 portfolios housed on the platform are worth more than $1 million. That's less than 1%.

And their top investments differ to those of the average portfolio in one particularly noticeable way: They own far fewer ASX 200 lithium shares.

Millionaire investors avoid ASX 200 lithium shares

Take a stab at the most popular ASX 200 share among all Selfwealth investors, by volume. I'll give you a second to lock in a guess.

If you said Lake Resources NL (ASX: LKE), pat yourself on the back. It comes in as the top stock and the fourth most popular ASX investment overall, behind three exchange-traded funds (ETFs).

In second place is Core Lithium Ltd (ASX: CXO). Meanwhile, Pilbara Minerals Ltd (ASX: PLS), Sayona Mining Ltd (ASX: SYA), and Liontown Resources Ltd (ASX: LTR) are all found within the platform's 20 most popular investments.

But what about the wealthiest 1% of investors?

Well, only one ASX 200 lithium share appears in the 20 most popular investments found within portfolios worth more than $1 million.

That is S&P/ASX 20 Index (ASX: XTL) giant Pilbara Minerals. The $14 billion ASX 200 lithium share holds the seventeenth spot among millionaires' largest holdings.

So, what are Aussie millionaires investing in instead? Many appear to turn to ASX 200 blue chips, as my Fool colleague Tony reports.

The most popular ASX investment among the largest 1% of portfolios is Fortescue Metals Group Limited (ASX: FMG). Its iron ore peer BHP Group Ltd (ASX: BHP) comes in third place.

Big four banks Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ), and Commonwealth Bank of Australia (ASX: CBA) also make the top 10.

The post Power portfolios: Millionaire investors shun ASX 200 lithium shares appeared first on The Motley Fool Australia.

Maybe you'd like to emulate their portfolio? Surely if they're wealthy then they must know what they're doing?

Well, the cat need not be killed because this week investment platform Selfwealth Ltd (ASX: SWF) crunched the data to reveal the ASX-listed stocks that are most held by millionaires:

1. Fortescue Metals Group Ltd (ASX: FMG)
2. Vanguard Australian Shares Index ETF (ASX: VAS)
3. BHP Group Ltd (ASX: BHP)
4. Westpac Banking Corp (ASX: WBC)
5. CSL Limited (ASX: CSL)
6. ANZ Group Holdings Ltd (ASX: ANZ)
7. Commonwealth Bank of Australia (ASX: CBA)
8. Neuren Pharmaceuticals Ltd (ASX: NEU)
9. Macquarie Group Ltd (ASX: MQG)
10. A2 Milk Company Ltd (ASX: A2M)

The average size of the millionaire portfolio was $2.6 million. The largest one was a whopping $97 million.

How the millionaire portfolio differs from the peasants

Selfwealth chief executive Cath Whitaker observed a common theme in the millionaire portfolios.

"Our millionaire portfolio investors hold strong companies in strong sectors," she said.

"When it comes to ETFs they go for the biggest, and when it comes to non-traditional single stocks they've picked those that have seen very high returns."

Indeed, most of the list is made of established industry leaders. The one outlier in the top 10 list seems to be Neuren Pharmaceuticals.

That stock has exploded 268% over the past 12 months.

In an endorsement for active stock picking, the major difference between the millionaire portfolios compared to the general population was that there was only one exchange-traded fund stock featuring in the wealthy top 10.

According to Selfwealth, the top 10 ASX shares among the wider investor community are "dominated" by ETFs.

Remarkably, the millionaires are patriotic. The only non-ASX stock in the top 20 is personal computing giant Apple Inc (NASDAQ: AAPL), which came in at 15th.

The wider investor population loves ASX lithium shares, with five featuring among the most popular 20.

But for the millionaires, only Pilbara Minerals Ltd (ASX: PLS) features, and that's coming in at a lowly 17th.

The post The top 10 ASX shares held by millionaires appeared first on The Motley Fool Australia.

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Datt Capital principal Emanuel Datt gives his thoughts on some ASX shares that have caused much pain for investors this year.

Cut or keep?

The Motley Fool: Now we'll take a look at three ASX shares that have been ravaged this year. First one is Selfwealth Ltd (ASX: SWF), which halved this year before the recent rebound. What would you do with it?

Emanuel Datt: I would say keep. The reason being that, despite the fall in the share price, the company has experienced significant business growth. I think it's probably doubled in size over the last 12 months. 

We view the share price performance as being more of a function of basically the outflows or the rotation away from these tech and growth themes, more than anything. 

[With] interest rates that are projected to rise going forward, Selfwealth actually has significant leverage to this theme and really benefits from higher interest rates. The reason being is that Selfwealth is actually paid a margin from customers' funds that are held on its platform. 

Basically, they received the RBA cash rate plus 80 basis points, and I think last quarter they had about $700 million in customer funds on the platform itself. There's quite significant leverage within the business model to increasing interest rates. 

I think that [there's] also a cyclical move in terms of retail traders on the stock market. 

It's probably one that will find its way higher than where we see ourselves now.

MF: Next one has been in the headlines recently — Humm Group Ltd (ASX: HUM), which has halved year-to-date.

ED: Yeah, Humm Group. Look, for this, I would probably say sell. Why I say that is that I think every consumer lending or consumer finance company we've seen has experienced decreasing headwinds. I think Humm themselves more or less were trying to hedge that angle as a rationale to [get] the transaction with Latitude Group Holdings Ltd (ASX: LFS) over the line, but ultimately the deal was cancelled.

However, I think that this was probably detrimental to the company overall. Because, ultimately, the expected credit losses will be sitting on Humm Group's balance sheet basically, rather than being incorporated into Latitude's business which was a far greater scale. 

Another thing worth mentioning is the fact that the whole board, except the major shareholder, have resigned or indicated that they are going to resign. I think this leads us to, or raises, questions about the governance of the company itself and we've seen there the past six months or so, the entire board has been fairly united against the single major shareholder who was against the transaction.

I think that ultimately… if you're a minority shareholder in the company, ultimately these other directors actually represent your interest, and if they suddenly step off, then who's there to protect your interests against a majority shareholder who may have other motives? 

I guess that's why we would say it's a sell, at least until the dust settles a little bit and the company can provide a bit more clarity about its outlook.

MF: There's a lot going on there, isn't there?

ED: Absolutely. It's a big mix but I think the share price has reacted accordingly. I think the whole Latitude [deal] helped the company out over the last three months and now it's reverting back to being in line with all the other consumer financiers out there.

MF: The third one is one that is deep, deep in the red in my own portfolio — Appen Ltd (ASX: APX).

ED: Appen, I would probably call that a sell, as well. I think there's no doubt that there is some value at Appen, in terms of the assets. 

I think it was Telus International Cda Inc (TSE: TIXT) that was contemplating making some form of expression of interest. But also we have Blackstone Inc (NYSE: BX) that was rumoured to be running the ruler over the business itself. 

Ultimately, I think the segment which Appen operates within, I think there is definitely still a future in it. But I think it's all about being able to profitably renew contracts with its major customers. We just get the sense that there's been a lot more competition in the particular sector.

Telus was also a competitor [in] exactly the same sector, as well. But, ultimately, in the update that Appen put out, they did guide towards materially lower EBITDA. It raises questions for us because, ultimately, if revenues have fallen, that increases the probability of potentially writing down assets and making a big after-tax loss, which the market will definitely not like. 

Then again, we would probably say sell just with the assumption that there's no other buyers lurking out there which there very well could be, given the interest the company has attracted in the recent past.

The post Bargains or value traps? Expert rates 3 ASX shares that halved this year appeared first on The Motley Fool Australia.

For the very first time, Australian investors will be able to invest in Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) without actually buying the cryptocurrencies themselves.

Local provider ETF Securities is the first to make this happen for the Australian market, in conjunction with European cryptocurrency manager 21Shares.

The two funds will be called ETFS 21Shares Bitcoin ETF (Chi-X: EBTC) and ETFS 21Shares Ethereum ETF (Chi-X: EETH).

"Australians wanting to buy Bitcoin and Ethereum have historically been forced onto unregulated crypto exchanges," ETF Securities stated in an email to customers.

"But with the launch of Bitcoin and Ethereum ETFs, investors will be able to trade on highly regulated exchanges."

While the two ETFs are coming soon, an exact launch date has not yet been disclosed as some regulatory red tape is still pending.

The cryptocurrency revolution is not happening on the ASX

The Motley Fool has confirmed the funds will be hosted on Australia's second biggest market Chi-X, rather than the ASX.

Chi-X shares are available on most online stockbroking platforms, such as Stake, CMC Markets, Superhero, Selfwealth Ltd (ASX: SWF), NABTrade, AusieX, CommSec and Pearler.

It is understood there are still some regulatory difficulties with listing blockchain and cryptocurrency-related shares on the ASX.

ETFS head of distribution Kanish Chugh told The Motley Fool last month that ETFS Fintech & Blockchain ETF (Chi-X: FTEC) debuted on Chi-X to get the product out to market faster than its rivals.

"We felt there were potentially some hurdles, at the time, with the ASX," he said.

"We really wanted to say 'Investors want this strategy — how can we get it to market?' And Chi-X were working quite closely with us around that… we'd get this out to investors quicker."

New cryptocurrency research centre for Australians

21Shares has nearly US$3 billion of funds under management across 20 European cryptocurrency exchange-traded products already.

"Once we had decided to build a range of crypto ETFs for the Australian market, there was only one partner we wanted to work with," ETF Securities executive chair Graham Tuckwell. 

"They are the cutting edge of crypto ETPs in the world today."

The two partners are also launching a cryptocurrency "research and education centre" for Australian investors.

The information hub will cover not just Bitcoin and Ether but the more obscure currencies such as Solana (CRYPTO: SOL), Polygon (CRYPTO: MATIC) and Avalanche (CRYPTO: AVAX).

"The research centre will explain in simple English how the often-complicated world of blockchain works," stated ETF Securities.

"It will also feature the bleeding edge news on crypto, various blockchain metrics, price action and important news on miners, custodians and other companies in the supply chain."

The post Australia's first direct Bitcoin and Ethereum ETFs are launching appeared first on The Motley Fool Australia.

That's despite the share brokerage company continuing to grow at a very quick pace.

Both FY21 and the first quarter of FY22 showed a high level of growth.

FY21 report

Whilst the FY21 result wasn't within the last month, it may have featured in investors' minds in recent months.

The last financial year saw revenue growth of 135% to $18.4 million, with a 105% increase in active traders. Operating cashflow was a positive $1.1 million in FY21, driven by "strong" revenue growth and disciplined cost control.

Selfwealth has been working on diversifying its revenue streams. US trading was launched in December 2020 and was adopted by 29% of total active traders within the first six months.

The company said it demonstrated its scalable business model in FY21, with increasing profitability. The gross profit margin increased from 33.4% in FY20 to 41.4% in FY21. Operating expenses increased by 41% compared to revenue growth of 135%.

Selfwealth's mission is to increase its market share to be the number two in online trading. It said it was number four at the time. The company said it is the top platform for attracting people switching from banks and other platforms.

The Selfwealth share price has fallen by around 17.5% since the release of the FY21 result.

FY22 first quarter update

Just over a month ago, the business reported the first quarter of its FY22.

It has reported accelerating quarter on quarter growth. Active traders increased 13% to 107,461, quarterly trade volume grew 22% to 435,620 and client cash rose 15% to $600 million. The operating revenue rose by 7.8% quarter on quarter to $5.5 million and 32% year on year.

Selfwealth has been working on increasing engagement through content, with new development and investment webinars attended by thousands of customers every week.

It has also been working on adding value with production innovations like instant deposits, live pricing and integration of ESG data.

After a capital raising a few months ago, the business has been increasing its investment and it's seeing the advantages of that, with expectations the company will keeping benefiting for the rest of the year and beyond.

Selfwealth experienced a cash outflow of $1.1 million for the quarter to 30 September 2021. It ended the quarter with $17.5 million of cash with no debt.

AGM

The latest market sensitive announcement that may have impacted the Selfwealth share price was the annual general meeting (AGM).

At the AGM, it outlined the business case for Selfwealth, its FY21 result and the FY22 first quarter numbers.

The company is also on track in the second quarter of FY22 for cryptocurrency and new international markets. It's also looking to refresh its user interface and add more education and content for members.

In the third quarter it's looking to launch 'dynamic notifications', tax reporting, provide a advisor platform update, community insights and the news feed 1.0.

Then, in the fourth quarter of FY22, it's working on new products, news feed 2.0 and the dynamic trading feature.

Selfwealth says that it has high growth potential on a scalable platform with diversified revenue and significant operating leverage.

Selfwealth share price snapshot

Whilst Selfwealth shares may be down more than 50% over the last nine months, it has risen more than 70% over two years and 210% from the bottom of the COVID-19 crash.

The post Why has the Selfwealth (ASX:SWF) share price dumped 18% in a month? appeared first on The Motley Fool Australia.

The fund scratches an itch that many investors have been wanting for a while — diversified exposure to companies at the coalface of blockchain and fintech.

But one big question that arose was why the new product was launched on Australia's second-biggest exchange Chi-X rather than the largest, the ASX.

One massive advantage was that it could be brought to market earlier, ETFS head of distribution Kanish Chugh told The Motley Fool.

"We felt there were potentially some hurdles, at the time, with the ASX," he said.

"We really wanted to say 'Investors want this strategy — how can we get it to market?' And Chi-X were working quite closely with us around that… we'd get this out to investors quicker."

Listing on Chi-X allowed the product to be launched in October, making it the first blockchain-focused ETF in Australia.

It makes no difference to 90% of retail investors 

Chugh claimed that for most Australian retail investors, the fact that FTEC is listed on Chi-X would make no difference.

"Pearler, Superhero, Selfwealth Ltd (ASX: SWF) — all 3 have Chi-X connectivity or offer FTEC. CMC Markets, NABTrade, AusieX, CommSec — they're all offering Chi-X-listed funds," he said.

"For the retail investor, I'd say about 90% of the market is covered."

Contrary to public perceptions, there is little difference in functionality between ASX and Chi-X and that competition is healthy, according to Chugh.

"Chi-X was recently acquired by CBOE Global Markets Inc (BATS: CBOE)," he said.

"That's a good indication that they're not just a small player in this market. They're wanting to be a bigger player."

Chugh also added that Magellan Financial Group Ltd (ASX: MFG) and others had recently also listed funds on Chi-X, foregoing the ASX's near-monopoly.

FTEC boasts $10 million of funds and is up 7% since launch

FTEC follows the Indxx Developed Markets Fintech & DeFi Index.

That basket consists of 75 fintechs from developed nations, with a focus on blockchain and decentralised finance (DeFi) technologies.

"FTEC uses a full-replication strategy to track the index, meaning that it holds all the shares that make up the index," states ETF Securities' product page.

"Companies are equally weighted, meaning at each rebalance the companies are bought in an equal proportion."

Chugh told The Motley Fool that FTEC now has $10 million under management and the share price is up 7% since its 14 October launch.

The investments are broader than just cryptocurrency-related businesses, which are a subset of the blockchain family. Chugh felt this made FTEC less volatile.

"We feel this product, in the long term, will be a mainstay in portfolios."

The post Why is the ETFS Fintech & Blockchain ETF (FTEC) not listed on the ASX? appeared first on The Motley Fool Australia.

Despite its underperformance, the business has managed to deliver very strong growth rates as the Australian investing landscape continues to grow rapidly.

SelfWealth held its annual general meeting (AGM) on Thursday, which reiterated some of the company's key achievements, growth initiatives, and outlook.

SelfWealth's growth journey so far

The SelfWealth share price slipped 2% in FY21 despite the company delivering record results. These included:

• Revenue surging 135% to $18.4 million;
• Active traders increasing 105% to 95,189;
• Positive operating cash flow of $1.1 million driven by strong revenue growth and disciplined cost control;
• Gross profit margins of 41.4%, up from 33.4% in FY20; and
• US trading launched in December 2020 and adopted by 29% of total active traders within the first six months.

SelfWealth described FY21 as a year where it "refined" vision, transitioning from a sole focus on ASX-listed equities to becoming a much broader wealth creation platform.

What's next for SelfWealth and its share price?

Investors will be hoping the company's plans spell good news for the SelfWealth share price. SelfWealth is on a mission to grow its market share to become the second-largest online trading platform (currently No. 4).

The retail trading environment has rapidly evolved in favour of SelfWealth's business, where its addressable market has doubled since January 2020 thanks to a jump in trading interest.

According to Investment Trends, Selfwealth's market share is gathering momentum, recently passing a big four bank and currently ranked number 4 for market share.

The AGM slides highlighted SelfWealth as ranked 183 of all websites in Australia. By comparison, Commsec, NAB Trade, CMC, and Stake sit at 58, 225, 346, and 415 respectively.

Looking ahead, SelfWealth has an exciting product roadmap including offering traders new global markets, beta testing for cryptocurrencies, and educational content for members in 2Q22.

The SelfWealth share price remains subdued despite its exciting growth plans and sector tailwinds.

This has happened in the past following the company's record FY21 full-year results announcement and recent first-quarter activities update.

The post SelfWealth (ASX:SWF) share price falls despite accelerating growth appeared first on The Motley Fool Australia.

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Datt Capital principal Emanuel Datt explains how a coal miner could possibly be a great investment and why it's important to practise dollar-cost averaging.

The ASX share for a comfortable night's sleep

The Motley Fool: If the market closed tomorrow for 4 years, which stock would you want to hold?

Emanuel Datt: It was quite funny because when I read this question, I thought of SelfWealth Ltd (ASX: SWF). 

But then I realised, "Oh, well, SelfWealth's whole business is about having a tradable market. Oh, that wouldn't work."

So I think that the stock that we would want to hold would be Whitehaven Coal Ltd (ASX: WHC). Ultimately, that's driven by the reality that the transition to cleaner energy sources will require coal, and lots of it, effectively. 

I think that, ultimately, that's driven by the green lobby having labelled nuclear power as dangerous but, conversely, this strengthens the position of fossil fuels. It basically extends what we think will be the time horizon for fossil fuels to be used. 

Longer term, the coal market is positively positioned because new mines are generally quite difficult to permit and the output from existing mines is falling, and this is despite relatively stable demand. That's projected over the next 20 or so years.

Accordingly, we think that there's going to be enduring supply-demand mismatch, at least over the next 10 to 20 years [which will] lead to higher prices down the line. 

Whitehaven's coal is known for its positive clean qualities, I guess. Its customers are primarily ex-Chinese east Asians — like the Japanese and Koreans. It also has already permitted and advanced expansion opportunities while also, we feel, that it's materially undervalued on projected DCF [discounted cash flow] basis. 

If strong coal prices persist, then we feel that Whitehaven will be in a very strong position to potentially cash fund their expansion projects while also making generous capital returns back to shareholders. 

The way we see it… Whitehaven is just a pure cash machine, so we'd feel quite comfortable holding this for the long term.

MF: Is it one of your core holdings?

ED: Yeah. Well, we're actually sort of building into it at the moment because we do have a position, but not a big enough position at the moment.

Looking back

MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.

ED: Most recently, it's not buying Whitehaven in May in the low $1 range.

MF: Yes, the price has ramped up since mid-May, hasn't it?

ED: Yeah, it's gone up about 3 times.

But we were [still] thinking about buying because we know the history of the company quite well, and we noticed that a particular major shareholder was reducing their stake. Ultimately, we were too fixated on an entry point around $1, and I think the low was maybe $1.10 or $1.20 or something like that. 

So, being too fixated, we just missed out because it shot up to $2 very quickly and today it's trading at over $3. Ultimately, we like the company so we're having to put up our hard earned [at] over $3.

MF: It goes to show you, even the professionals are susceptible to anchoring.

ED: Absolutely, yeah. I think it's really just a prime example of just being overconfident in the information that we had at hand. 

Ultimately, ideally, we should've staggered our entry given how confident we were in the company's prospects. But… [we had] the bias of hoping that'll pull back to make an entry point at some stage. 

It's really a great lesson to practise dollar-cost averaging.

The post Why I'd hold this coal-mining ASX share for 4 years: expert appeared first on The Motley Fool Australia.

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Datt Capital principal Emanuel Datt picks the 2 most tempting buys at the moment and explains why they appeal to him.

Hottest ASX shares

The Motley Fool: What are the 2 best stock buys right now?

Emanuel Datt: Since June, approximately 50% of Dusk Group Ltd (ASX: DSK)'s store network has been closed due to the ongoing COVID-related restrictions in New South Wales and Victoria. But one thing we did notice that we felt was significant was that the company's revenue actually fell by far less than this percentage of the store network falling. 

To us, that indicates really excellent customer loyalty and love. Accordingly, expect that, as social restrictions loosen in NSW and Victoria, the company will be able to benefit from this reopening.

In addition, the company has had plans to expand the chain internationally for some time now — but this has really been delayed due to the lack of international travel. But now, as we're seeing, international travel's opening up somewhat, and we expect that to move a bit quicker as the broader society reopens. 

We're really expecting the company to really charge out of the gate on this front at some time in the very near future. 

MF: How early did your fund buy into it?

We first took a position just after the [initial public listing] IPO. It was, I would say, early this year. I think it was January or February this year, so it was sort of in the low $2s that we started to buy. 

[Editor: Dusk shares closed Monday at $3.26.]

We should point out that we still think Dusk, even after this price rise, still looks undervalued by some margin on a peer-to-peer comparison basis. That's really just based on current operations, it's not attributing any sort of value uplift or growth factor that's usually achieved by these retail teams once they go international. 

Woolworths Group Ltd (ASX: WOW) is a great example of what the growth multiple could potentially be over time.

MF: And your second-best buy at the moment?

ED: SelfWealth Ltd (ASX: SWF) is our second-best stock buy right now.

SelfWealth is an online broking and wealth platform that has grown to become the number 3 player in the local retail broking market, and that's from a standing start in 2016.

MF: It's number 3 already?

ED: Absolutely. It overtook NABtrade a few months ago. 

To grow to number 3 from literally zero in the space of 5 years is really a great achievement. Basically, the company has almost 100,000 active clients and continues to win an outsized proportion of market share. We feel that there's a significant opportunity to continue to grow via the rollout of new product — also, the ability to cross-sell to a captive audience via the ecosystem.

There's been a new management team that joined about 6 months ago, and they're sort of all digital natives so they've found their feet fairly quickly. Accordingly, the company is continuing to expand and sell their product at a rapid pace. 

We consider the company to be undervalued on a peer comparison, on a transactional basis. We've seen all transactions of similar companies priced at around $2000 a user, or thereabouts. This sort of implies that the market has significantly undervalued the company, and notwithstanding the significant opportunity to expand into other ancillary business lines itself.

MF: SelfWealth is in an industry where there's a lot of competition, so what makes it stand out for you?

ED: I think just the sheer brand power is quite incredible. You see other competing brokers, Superhero is probably one of the biggest competitors out there, but if you look at alternative forms of data like their web traffic, SelfWealth's engagement rates are really significantly higher than their competitors. 

For example, SelfWealth's engagement rate in the sense of time on the website has risen 35% over the last 90 days, whereas Superhero engagement has risen only about 5% or 6%.

Even though these competitor brands do like to spend a lot on their PR and marketing and all that sort of thing, SelfWealth is more or less just chipping away quietly in the background and getting runs on the board. 

And SelfWealth also does have a big advantage because all the stock is held within a customer's HIN — their direct name — rather than a custodial model that a lot of these other discount brokers tend to operate using. That's very important from a consumer protection angle, as well.

The post 2 best ASX shares to buy right now: fund manager appeared first on The Motley Fool Australia.

In the last 7 days, shares in the online broker have stormed 23% higher.

Let's take a look at what's been fuelling the SelfWealth share price.

What's been fuelling the SelfWealth share price?

SelfWealth has not released any notable news in the past week that could explain the bullish price action.

However, the online broker was on the receiving end of some very positive market commentary.

In a recent interview, fund manager Emanuel Datt highlighted that SelfWealth has the potential to become the next Afterpay Ltd (ASX: APT).

According to the fundie, the online broker has the potential to expand its platform to offer other financial services.

Prior to its recent rally, the SelfWealth share price was on the slide after releasing its full-year report for FY21.

How did SelfWealth perform in FY21?

Late last month, shares in SelfWealth were hammered despite delivering record results across key performance metrics.

Highlights from the company's FY21 results included:

• Revenue of $18.4 million, up 135% year on year
• Earnings before interest, taxes, depreciation, and amortisation (EBITDA) loss of $0.5 million compared to a $2.4 million loss in FY20
• Net loss of $0.6 million compared to a loss of $3 million in FY20
• 95,189 active traders on the platform, up 105%
• Gross profit margin increased to 41.4% from 33.4%

SelfWealth highlighted the release of various products and features for FY21.

These included adding ASX announcements to the platform, flat-fee US trading and the launch of iOS and Android mobile apps.

In addition, SelfWealth noted an improvement in its profitability, with a positive operating cash flow of $1.1 million in FY21.

What's next for SelfWealth?

SelfWealth is a budget platform that offers retail investors a flat fee of $9.95 for every trade on the ASX.

In addition, the company also offers auxiliary services such as a community share market forum and a premium forum for $20 per month.

The online broker also released a roadmap earlier this year that highlights the company's expansion plans.

Some planned features include members funding their ASX accounts in real time and live pricing.

Despite bouncing strongly in the past week, shares in SelfWealth remain more than 22% lower since the start of 2021.

At the time of writing, the SelfWealth share price has dropped 4.65%.

The post The SelfWealth (ASX:SWF) share price is up 23% in a week. What's next? appeared first on The Motley Fool Australia.

Shares in the investing and trading platform have been hammered by recent announcements including the company's FY21 full-year results and $10 million capital raising.

Despite its recent underperformance, the founder of Datt Capital, Emanuel Datt, told the Australian Financial Review (AFR) that SelfWealth might have what it takes to become the next Afterpay Ltd (ASX: APT).

Could the SelfWealth share price become the next Afterpay?

Datt pointed to SelfWealth when asked about any hidden nuggets in the small-cap space with the potential to be the next Afterpay.

"We believe that SelfWealth possesses a lot of the ingredients that made Afterpay so successful, and could prove to be an enormous success looking out over a three-year time horizon," Datt said.

"The company is currently focused solely on the online broking space but has large potential to expand towards offering a suite of financial services across its platform."

"The opportunity is there for the taking and the new management team are executing very well so far."

Datt Capital is also the largest shareholder in the SelfWealth share price.

What's next for SelfWealth?

SelfWealth has laid out a detailed product roadmap that continues to focus on expanding its capabilities in terms of online broking.

In the near term, the company said that it's working on the ability for members to fund their ASX accounts in real-time, a live pricing feature and continuously working to improve the user experience on its app.

Perhaps an exciting short-to-medium term catalyst for the SelfWealth share price is its plans to launch cryptocurrency trading.

The company said that "we will be partnering with an established and secure cryptocurrency exchange to provide access to cryptocurrencies".

"This is off the back of research we've done, including answers from many of you. You want to access crypto, but you want it done in a safe and secure manner. You will be able to trade cryptocurrencies that have been vetted by us first. We will factor in popularity, liquidity and security."

The post The Selfwealth (ASX:SWF) share price could be the next Afterpay: fundie appeared first on The Motley Fool Australia.

At the time of writing, the SelfWealth share price is down 1.37%, trading at 36 cents.

SelfWealth share price tumbles despite record FY21 performance

The SelfWealth share price is struggling to catch a bid on Friday despite delivering record results across key performance metrics. Some key highlights from the company's FY21 results include:

• Revenue of $18.4 million, up 135% year-on-year
• Earnings before interest, taxes, depreciation, and amortisation (EBITDA) loss of $0.5 million compared to a $2.4 million loss in FY20
• Net loss of $0.6 million compared to a loss of $3 million in FY20
• 95,189 active traders on the platform, up 105%
• Gross profit margin increased to 41.4% from 33.4%

What happened for SelfWealth in FY21?

It's been a challenging year for the SelfWealth share price, down 36% year-to-date to 35.5 cents.

In stark contrast to its weak share price, the company delivered a record financial performance in FY21.

SelfWealth has hailed FY21 as a successful year of product and features release. These include enabling adults to invest on behalf of children, adding ASX announcements to the platform, flat-fee US trading and the delivery of both native iOS and Android mobile apps.

In December 2020, the company launched its US trading feature, with an encouraging 29% of total active traders adding the new functionality to their existing ASX portfolios in the first six months.

SelfWealth advised that international trading generated $1.2 million in revenue at a higher gross margin than the domestic market.

SelfWealth has made an encouraging step towards profitability, with a positive operating cash flow of $1.1 million in FY21, up from a $147,000 loss in FY20.

This is in light of a 41% surge in operating expenses to $8.5 million, which includes increases in employee benefits, new hires and a three-fold increase in advertising and promotional costs.

Management commentary

SelfWealth CEO Cath Whitaker provided commentary for the company's focus in FY22.

In FY22, SelfWealth's core priority is to invest in the next phase of growth to continue market share expansion. SelfWealth has a scalable platform with diversified revenue streams and significant operating leverage.

We see the continuation of favourable external trends, including low-interest rates and the ongoing digitisation of investment markets, underpinning the addressable market growth and we are confident that the company is well-positioned to deliver ongoing growth over the years ahead.

What's next for SelfWealth?

The SelfWealth share price has a long road to reach break-even.

Encouragingly, the company has laid out a detailed product roadmap, developed based on comprehensive customer surveys and in-depth market research.

SelfWealth said that in Q1 FY22, it will launch live pricing, instant deposits and a desktop US refresh. And in Q2 FY22, the company aims to enter new global markets and improve tax reporting.

Another key highlight for SelfWealth is its plans to implement a cryptocurrency trading feature in FY22, subject to board and relevant regulatory approvals.

The post SelfWealth (ASX:SWF) share price slips despite record FY21 result appeared first on The Motley Fool Australia.

There can be a lot to consider when you first start investing, so we've broken it down into steps. These include how to invest, when to start, understanding your goals and risk tolerance, choosing investment strategies, and more. 

Investing for beginners

Investing in shares is one of the surest ways of increasing your wealth over the long term. However, many people hesitate to start because stock market investing can seem intimidating and confusing. 

This doesn't have to be the case. Once you've mastered the basics, you'll see that it is relatively straightforward and can lead to substantial long-term rewards. Below, we have set a step-by-step guide to investing for beginners in Australia, which will take you through the basics.

1. Make sure you're financially ready to invest

All else being equal, the best time to start investing is right now. The longer you allow your returns to compound, the more your money should grow. That said, you should ensure your financial house is in order before you take the plunge into the stock market. 

To enable your investment dollars to work as effectively as possible, make sure you are not carrying any high-interest debt, such as credit card debt, and have sufficient funds to meet your needs in an emergency. 

Pay off high-interest debt 

In nearly every set of circumstances, the best use of your cash is to pay down high-interest debt (rule of thumb: interest 10% or higher). For most people, that means credit card debt. It's easy to underestimate the power of compound interest combined with time.

A 20-year-old lucky enough to invest $10,000 and achieve the historical stock market average of 10% yearly returns would be a millionaire before age 70. That's multiplying your money by 100!

Unfortunately, that maths works the same way in reverse. If you accrue 10% interest, $10,000 in credit card debt becomes $1 million before age 70. Making the required repayments will prevent the debt from spiralling out of control, but it is essential to minimise this type of debt. 

You could consider transferring your balance to a card offering an interest-free period or obtaining a personal loan to lower interest expenses. 

Establish an emergency fund 

Stuff happens – stuff that requires money to fix. (Think job loss, car issues, medical bills, or anything else that Murphy or life throws your way.) If you don't have money on hand, you'll have to improvise to make ends meet, which could mean patching over a problem with an expensive solution like a credit card (see above) or worse.

That's why everyone should have an emergency fund – a cash hoard you can raid if unexpected expenses arise. Your emergency fund needs to be readily accessible in a high-yield savings account. Don't expect to make a killing on this investment. 

The interest on most savings accounts these days won't keep up with inflation – but the peace of mind an emergency fund brings is priceless. 

2. Understand your investment goals

Another essential thing to do before you start investing is to get a general sense of 'who you are' as an investor. There are a few important questions to ask yourself, such as:

• Why are you investing?
• What is your risk tolerance?
• What is your investment priority?
• How much time do you want to spend on your investments?

Why are you investing? Your reasons for investing can significantly influence your investment style, risk tolerance, and more. Suppose you're saving for retirement. In this case, you will probably be less inclined to take risks than someone with a substantial nest egg in their superannuation account and is simply investing to make additional money. The same can be said if you invest for a specific goal, such as to pay for your kids' education.

What is your risk tolerance? Assessing your risk tolerance is more of a personality question. Are you a risk-taker willing to ride out some turbulent share price moves to achieve better long-term returns? Or would large swings in the value of your portfolio make you nauseous?

There's tremendous variety within the share market when it comes to risk. For example, an Australian share like Commonwealth Bank of Australia (ASX: CBA), which has a long track record of profitability, and a young but high-potential share like WiseTech Global Ltd (ASX: WTC), represent two different ends of the risk spectrum.

What is your investment priority? This is another question that can help you choose share investments that are right for you. For example, if you want to grow your wealth, you don't necessarily need to focus on dividend-paying shares. On the other hand, if you plan to rely on your investment portfolio for income, you may want to focus on high-dividend investments only. 

An investor whose main priority is long-term growth might choose an exchange-traded fund (ETF) like the Vanguard Diversified High Growth Index ETF (ASX: VDHG), which has a 90% allocation toward growth assets and 10% to income-generating assets.

On the other hand, an income-reliant investor might choose the Vanguard Australian Shares High Yield ETF (ASX: VHY), which aims to provide exposure to companies with higher forecast dividends relative to other ASX-listed companies. An investor who falls somewhere in the middle might choose the iShares Core S&P/ASX 200 ETF (ASX: IOZ), which tracks the S&P/ASX 200 Index (ASX: XJO).

How much time do you want to spend on investing? The answer to this question will tell you whether you should buy individual ASX shares or focus on ASX ETFs. 

ETFs provide automatic diversification and exposure to both Australian and international shares. Investing in an index fund is an excellent way to get cost-effective exposure to the performance of the share market as a whole. There is a wide variety of ETFs listed on the ASX, meaning investors also have the opportunity to invest in specific market sectors in line with investment themes.

If you want to choose individual stocks, we encourage you to do so. However, there's a caveat. You must commit enough time to thoroughly and effectively evaluate the shares before buying them. At a minimum, we'd suggest only investing in individual shares if you have at least a couple of hours each week to learn about stock market investing and evaluate potential investment opportunities.

3. Choose an investing strategy

Your investment strategy can be a crucial differentiator, setting successful investors apart. Your strategy is an action plan that helps you choose suitable investments for your financial situation, goals, and risk tolerance. It will guide any investment decision and be influenced by your individual circumstances.

Depending on your investment strategy, you may follow the tenets of value investing to identify undervalued ASX shares. You could also focus on investments with high growth prospects to make a capital gain or those with a strong dividend track record to secure regular dividend payments. 

You may decide to invest according to environmental, social and corporate governance (ESG) principles, typically referred to as ESG investing. This involves taking social and environmental factors into account in your investment decisions. 

Different investment strategies can suit different investors and market conditions. Active strategies require more input from investors, while passive investing requires less. Regardless of which approach you use, there are some basic investment principles you can follow to optimise your journey: 

• Invest consistently: Try to make it a habit to set money aside to invest regularly. This creates momentum, which can supercharge long-term returns. 
• Diversify: Diversification is the practice of investing in different market sectors and asset classes. This can act as a hedge against volatility.
• Have a long-term time horizon: Investing is about setting yourself up for the future, not getting rich quickly. Holding on for the long haul will allow your returns to compound over time.
• Keep learning: Make sure you understand what you are invested in. You can't expect to know everything overnight, but you should work towards expanding your knowledge – and wealth – over time. 

4. Determine how much money you need to invest

First, let's talk about the money you shouldn't invest in ASX shares. The share market is no place for money you might need within the next five years.

While the stock market will almost certainly rise over the long run, there's simply too much uncertainty in share prices in the short term – a drop of 20% in any given year is not unheard of. A recent example is the COVID-19 pandemic in early 2020, which saw the ASX 200 plunge more than 30%. The market then recovered almost half of that loss within a few months.

The funds you invest in the share market need time to generate returns, whether through dividends or capital gains. So, if you need money to make mortgage repayments, pay tuition fees, or for a home deposit or a wedding, this is not the money to put into the stock market.

Assuming you have these bases covered, you'll need to think about how to allocate your excess funds. The share market is just one investment option. It is also possible to invest in fixed-income securities like bonds or property via real estate investment trusts (REITs). Balancing your money between different classes of assets, such as shares, bonds, and property, is known as asset allocation. 

5. Open a brokerage account

To buy and sell shares or ETFs, you'll need a brokerage account, which enables you to trade on the market.

These accounts are offered by companies such as CommSec, nabtrade, Selfwealth Ltd (ASX: SWF), CMC Markets PLC (LON: CMCX), Stake, and many others. Opening a brokerage account is typically a quick and painless process. You can easily fund your brokerage account via BPAY or bank transfer.

With a few forms of ID at the ready, you should consider a few things before choosing a particular broker:

Which type of account?

First, determine the type of trading account you need. For beginner investors, this means choosing between full-service and discount brokerage accounts. Both account types will allow you to buy ASX shares, ETFs, and some managed funds. 

The primary consideration here is how much additional support you want. If you want easy access to research on individual companies, tailored investment plans, or the opportunity to participate in initial public offerings (IPOs), a full-service brokerage account would be the way to go.

On the other hand, if your goal is to take control of your investing and build up your knowledge without relying on the support of a broker, a discount or online investment platform might suit you better.

Compare broker costs and features

Brokerage fees for buying and selling shares vary between the different types of brokers. Full-service brokers typically charge higher fees than discount or online brokers. Some online brokers have even started eliminating trading commissions but may charge fees for trading shares in different currencies.

There are other significant differences, too. For example, some brokers offer customers a range of educational tools and portfolio-tracking features that can be useful for newer investors. Others provide the ability to trade on overseas share markets.

Another consideration is the user-friendliness and functionality of the broker's trading platform. Some are more 'clunky' than others. Most brokers feature examples of their user platform on their websites. With brokers that offer a trading app, it's a good idea to check the user reviews in the relevant app store before signing up.

6. Research ASX shares

Now that you know how to choose a broker, it's time to start thinking about which shares to buy. Buying the hottest high-growth shares may seem like a great way to build wealth (and it certainly can be), but we, Motley Fools would caution you to hold off on these until you're a little more experienced. It's wiser to create a 'base' for your portfolio with rock-solid, established blue-chip ASX businesses first.

To invest in individual shares, you should familiarise yourself with some basic evaluation methods. Our guide to value investing is a great place to start. In that article, we help you find shares trading at attractive valuations. If you want to add some exciting long-term capital growth prospects to your portfolio, our guide to growth investing is a great first reference.

It's a good idea to learn the concept of diversification, which means you should have various types of companies in your portfolio. However, you don't need to go overboard. Stick with businesses you understand. If it turns out that you're good at (or comfortable with) evaluating a particular type of business, there's nothing wrong with one industry making up a relatively large segment of your portfolio.

7. Buy your ASX shares 

Enter your purchase order through your broker. Once your purchase has settled, you are a shareholder! But the journey doesn't end there. The most successful investors continue to learn and invest throughout their lives. To start you on this journey, here are some of the best investing lessons you can learn: 

• Long-term investing is the best way to go: The share market has historically generated total returns of about 10% annually. But over the short term, it is a different story. Even relatively stable companies can see their share prices fluctuate from day to day, which is why trying to time near-term movement is very difficult.
• Look at market crashes and corrections as opportunities: Nobody likes to watch the value of their investments plunge. Market crashes can be scary, but they are also the best long-term opportunities.
  If you're investing for the long run, the right way to look at share market corrections and crashes is like a sale at your favourite store. If you were shopping and suddenly heard an announcement that everything in the store was 25% off, would you panic and run away? Of course not! So, why would you avoid the share market when the same situation occurs?
• Don't be afraid to sell if something changes: Even though long-term investing is the best way to own shares, that doesn't mean you have to hold every share you buy for decades, no matter what. Stick with companies while they fit your investment strategy, but if circumstances change, be prepared to reevaluate. 
• Don't invest in a business you don't understand: It may be tempting to purchase shares of a hot, new company with good media buzz. But until you have some experience, you're much better off buying shares of companies you know and trust, including those you interact with daily. As a general rule, if you can't clearly explain what a company does, how it makes money, and how it could grow in a few sentences, you should think hard about whether to invest in it.
• Don't follow the crowd: As human beings, our emotions often get the better of us, and that's especially true with investing. When we see all of our friends making money on the latest 'it' stock, we want to throw our money in, too. Conversely, when we see commentators on TV panicking and share prices falling, that's when we're inclined to sell. It's common knowledge that the main idea of investing is to buy low and sell high, but our instincts compel us to do the exact opposite. In fact, most investors underperform the market over time, and being too reactionary to news and making emotional investing decisions are big reasons why.

Learning about investing is a lifelong process

How does Warren Buffett, one of the world's most successful investors, spend his time? He doesn't spend it in meetings or on calls. Instead, he uses the bulk of his time sitting alone in his office and reading. 

"Read 500 pages like this every day. That's how knowledge works. It builds up, like compound interest," Buffett says.

There is nobody on this planet who knows everything there is to know about share investing. But if you want to become the best share investor you can be, you must treat learning about investing as a lifelong process.

The post How to invest in shares: A beginner's guide appeared first on The Motley Fool Australia.