Thanks partly to our unique system of franking, as well as some good old fashioned love of country, it's fair to say that ASX investors have a strong local bias.

When we do branch out to invest beyond our shores, it is usually a direct flight to the US markets. As I've written here before, the US is, as it should be, the first port of call for ASX investors seeking international diversification. No one can deny that the US is home to the vast majority of the world's best and most dominant businesses. No other country's share market constituents can match the size, scope and scale of top US stocks like Amazon, Alphabet, Microsoft, Netflix, Mastercard, Procter & Gamble, Apple, and countless others.

However, that doesn't meaning investing in US stocks isn't without risk. The US-Iran war that has been raging all month proves that. As such, I think the prudent investor might wish to consider diversifying beyond just Australia and America. The easiest way to do this, by far, is by using exchange-traded funds (ETFs).

Let's go through some of the best options for stocks outside Australia and the US.

3 ASX ETFs that can help diversify a portfolio

First up, there's the Vanguard All-World ex-US Shares Index ETF (ASX: VEU). This ETF, as its name implies, throws a whole bunch of different countries' stock markets together, with the notable exception of the US. The largest contributors to VEU's portfolio include Japan, the United Kingdom, China, Canada, India, and Taiwan. A healthy mix of advanced and developing economies there. ASX do feature in this ETF as well, although they make up just 4.3% of the entire portfolio.

Another option to consider is the Vanguard FTSE Emerging Markets Shares ETF (ASX: VGE). VGE focuses exclusively on emerging economies, so you won't find European, British or Japanese stocks here. Instead, VGE's largest contributors are countries like China, Taiwan, Brazil, South Africa and Saudi Arabia.

Finally, investors can consider the iShares MSCI EAFE ETF (ASX: IVE). This fund covers markets from Europe, Asia and the Far East (EAFE). It offers exposure to countries ranging form Japan, Spain and the UK to Germany, Singapore and Israel. Again, Australia is included as well, but contributes just over 6% to IVE's holdings.

Foolish takeaway

All three of these ASX ETFs offer Australian investors an easy way to add exposure to stocks from Europe, Asia and Africa to their portfolios. These regions are under-represented in the vast majority of ASX portfolios, and can help insulate investors from adverse movements on the American or Australian markets.

The post These 3 ASX ETFs can help protect your portfolio in 2026 appeared first on The Motley Fool Australia.

Saying that, I am also an investor who loves to buy shares at the kind of steep discounts that we do tend to see during a stock market correction or crash. As such, I do tend to keep some money on the sidelines for that time that the inevitable market crash rolls around.

Now, I, along with everyone else on the planet, have no idea when the next market crash will arrive. For all I know, it could be in 2026 or in 2036.

But I do know the companies that I will attempt to load the boat with when that crash does come. 

My stock market crash buy list for 2026

When the market goes through a period defined by intense fear, I usually try to prioritise companies that tend to trade at lofty valuations. That's because it is often the only time you can buy shares of these companies at reasonable prices. 

As such, I would have my eye firmly on two ASX tech shares in the next crash. Those are TechnologyOne Ltd (ASX: TNE) and Pro Medicus Ltd (ASX: PME).

Both of these companies are growing at exceptional rates, with high levels of free cash flow and compelling growth runways. As a result, it is normal for both TechnologyOne and Pro Medicus to trade with expensive price tags. But if there is a buying window to snatch up these stocks at a bargain price, I'll be trying hard to climb through it.

I would also be looking to buy more shares of Washington H. SouL Pattinson and Co Ltd (ASX: SOL). As I've long documented, Soul Patts is one of my top ASX investments, and any chance to buy more shares of this market-beater at low prices would (at least in my view) do wonders for my long-term wealth.

I wouldn't stop at the ASX, though. These days, stock market crashes are global events. And I will be turning to the US markets when the next one happens as well. Some of the stocks I would be looking forward to loading up on include Costco Wholesale Corp (NASDAQ: COST), Mastercard Inc (NYSE: MA), McDonald's Corp (NYSE: MCD) and Meta Platforms Inc (NASDAQ: META). These are all top-quality companies that (with the possible exception of Meta) never seem to go on sale. If they did, I would be there with as much cash as I could muster.

The post Here's my buy list if the stock market crashes in 2026 appeared first on The Motley Fool Australia.

However, it's my view that these balanced options are not a great fit for everyone. As I've discussed before, Australians under the age of 40 might be better off investing in a more growth-oriented fund that forgoes the stability that cash and bonds provide for a higher potential return by going all in shares. As anyone under 40 probably isn't going to retire anytime soon, stability and capital protection arguably shouldn't be high priorities at this stage of life.

When it comes to my own superannuation, I've put my money where my mouth is. My superannuation provider offers the choice of selecting individual index funds that I can invest my super into. So today, let's talk about the three ASX ETFs that I use within my super fund to achieve the best returns possible. The funds themselves aren't publicly traded, but have ASX counterparts which are essentially the same offering.

Three ASX ETFs that I've built my super fund around

Australian and international stocks

First up, we have a good old-fashioned S&P/ASX 200 Index (ASX: XJO) fund. Roughly 40% of my super fund goes towards an ASX 200 index fund, one rather similar to the iShares Core S&P/ASX 200 ETF (ASX: IOZ) or the SPDR S&P/ASX 200 ETF (ASX: STW). This fund holds the largest 200 stocks on the ASX. That's everything from Westpac Banking Corp (ASX: WBC) and Woolworths Group Ltd (ASX: WOW) to JB Hi-Fi Ltd (ASX: JBH) and Suncorp Group Ltd (ASX: SUN).

This index fund represents the best of Australian business. As ASX shares have historically delivered meaningful growth and healthy dividend income, I am very happy for this fund to receive some of my retirement cash.

Next up, another 50% or so of my super capital goes towards an international shares ETF. This ETF holds hundreds of different stocks from dozens of advanced economies around the world. These include the United States of America, the United Kingdom, Japan, Germany and France, among many others. A listed equivalent might be the Vanguard MSCI Index International Shares ETF (ASX: VGS).

Australia is a wonderful place to invest, but its best companies simply don't have the firepower that international markets do. That's why I'm happy that this component of my super fund invests in world-dominating stocks like Apple, Amazon, NVIDIA, Mastercard, Alphabet, Toyota and Nestle.

Adding some diversity to my super fund

My super fund's final holding, making up that final 10% or so, provides even more diversification. It is an emerging markets fund, drawing thousands of holdings from emerging economies around the globe. An ASX equivalent might be the Vanguard FTSE Emerging Markets Shares ETF (ASX: VGE). It offers exposure to countries like China, India and Taiwan. I think these economies will offer a lot of growth over the next few decades, and, as such, I am happy to have part of my super fund invested there.

Foolish takeaway

As I am still a few decades away from the traditional retirement age, I am happy to have 100% of my super fund invested in shares. With the three ETFs mentioned above, I feel that I have adequate diversification across multiple markets and currencies, whilst still maintaining exposure to some of the world's best companies. Individually selecting these investments also keeps my super costs as low as possible, which is of vital importance for building wealth over decades.

The post Here are the 3 ASX ETFs I use for my super fund appeared first on The Motley Fool Australia.

With more than $8 billion in assets under management, QUAL is currently the fifth most popular ASX ETF on our markets. It comes in behind the Vanguard Australian Shares Index ETF (ASX: VAS), the Vanguard MSCI Index International Shares ETF (ASX: VGS), the iShares S&P 500 ETF (ASX: IVV) and the BetaShares Australia 200 ETF (ASX: A200).

Unlike those four ETFs, though, QUAL isn't a market-wide index fund that blindly invests in companies according to their market capitalisation, with few other considerations.

Instead, it tracks an index that actively screens companies to identify their quality. These screens include factors like a stock's return on equity, earnings stability and financial leverage.

After applying these screens to a range of internationally listed shares, the VanEck International Quality ETF settles on a portfolio of around 300 different stocks, hailing from more than a dozen different countries. These countries range from Switzerland, Japan and the United Kingdom to China, Denmark and Ireland.

However, the vast majority of QUAL's portfolio is drawn from the United States of America, which commands more than three-quarters of this ETF's weighted holdings.

So, let's get into what you're actually buying when purchasing QUAL units in 2026.

QUAL: What's in this ASX ETF's box?

Here are the current top ten holdings of the VanEck International Quality ETF, as well as their respective weightings in the QUAL portfolio:

1. Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) at 5.67% of the total QUAL portfolio
2. Meta Platforms Inc (NASDAQ: META) at 5.02%
3. NVIDIA Corporation (NASDAQ: NVDA) at 4.64%
4. Apple Inc (NASDAQ: AAPL) at 4.62%
5. Microsoft Corporation (NASDAQ: MSFT) at 4.46%
6. Eli Lilly & Co (NYSE: LLY) at 3.44%
7. Visa Inc (NYSE: V) at 2.92%
8. ASML Holding N.V. (AMS: ASML) at 2.52%
9. Johnson & Johnson (NYSE: JNJ) at 1.86%
10. Walmart Inc (NYSE: WMT) at 1.77%

Some other significant QUAL holdings include Mastercard Inc (NYSE: MA), Netflix Inc (NASDAQ: NFLX), Costco Wholesale Corp (NASDAQ: COST) and Caterpillar Inc (NYSE: CAT).

Not only does this list reveal how dominant the US is in this ASX ETF, but it shows how similar its holdings are to a broad-market US index fund like the iShares S&P 500 ETF. We discussed that ETF just the other day, so check out how its holdings compare to QUAL's here.

This methodology seems to have worked quite well for the VanEck International Quality ETF, though. As of 31 December, QUAL units have returned an average of 14.8% per annum over the past ten years, and 22.85% per annum over the past three. It will be interesting to see if this performance keeps up in 2026.

This ASX ETF charges a management fee of 0.4% per annum.

The post Investing in the VanEck International Quality ETF (QUAL)? Here's what you're really buying appeared first on The Motley Fool Australia.

So today, let's talk about five US stocks that I would love to buy, or buy more of, this year.

5 US stocks I'd love to buy in 2026

Amazon.com Inc (NASDAQ: AMZN)

First up, no one will be surprised to see Amazon. This e-commerce and cloud giant has been in my portfolio for many years. But I would love to add some more in 2026. I am still excited about this company's future growth. Amazon's online marketplace has never looked more dominant, given that it is entrenched in economies right around the world.

This company's AWS cloud platform also continues to grow at an astounding pace, and seems to be carving out a place as the clear market leader in cloud-based infrastructure.

Amazon stock had a fairly flat 2025, so I wouldn't be surprised if it is my first US stock purchase this year.

Duolingo Inc (NASDAQ: DUOL)

Duolingo is another US stock that I've owned for a while now, and one that has been particularly lucrative to my portfolio. I am delighted to see this language-learning company report seemingly evergreen growth year after year, both in active users and through the number of courses users can engage with (chess was a notable 2025 addition).

Despite its impressive growth rates, Duolingo is a stock that tends to be highly volatile. Over 2025, for instance, it got as high as US$544.93 and as low as US$166.27 a share. I'm hoping for more volatility this year, and a low price to pick up more shares at.

S&P Global Inc (NYSE: SPGI)

Now onto a stock that I don't yet own, but would like to by this time next year. S&P Global is a financial services company you might know best from its stewardship of many of the world's most important stock market indexes. These include both the S&P/ASX 200 Index (ASX: XJO) and the S&P 500 Index.

The rise of index investing over the past decade or two has been a boon for S&P Global. It has been able to compound revenues and profits at a remarkably consistent rate. This is evidenced by its 52-year streak of annual dividend increases, which have averaged an inflation-crushing rise of 7.46% per annum over the past five years. If there is a pullback opportunity to buy this company in 2026, I won't miss it.

Costco Wholesale Corp (NASDAQ: COST)

Costco is the US stock behind the eponymous supermarket chain. Costco's unique membership model and bulk-oriented grocery warehouses have helped the company stand out against fierce global competition, including in Australia. We can see this in action through Costco's 21-year streak of dividend increases, which have averaged an impressive 12.97% per annum over the past five years.

Costco stock also had an uncharacteristically poor year in 2025. If this trend continues in 2026, I will be happy to add some more shares to my existing position.

Mastercard Inc (NYSE: MA)

Our final US stock is a company we'd all be familiar with, and one that is probably in your wallet as we speak. Mastercard is the global payments giant that forms a near-duopoly with its fierce rival, Visa.

Mastercard has one of the most picture-perfect growth trajectories you can imagine, with more than a decade of double-digit growth in revenues, earnings, profits and dividends in the bank. Its annual dividend growth has averaged 13.7% over the past five years.

I've held Mastercard shares for many years, but have always regretted not loading the boat to the brim at the time of my first purchase. If I have the opportunity to rectify this mistake in 2026, I would be delighted to.

The post I want to buy Amazon and these 4 US stocks in 2026 appeared first on The Motley Fool Australia.

For one, there are simply more shares to choose from on the US markets. For another, the US is home to some of the best, and most globally dominant, businesses in the world. As such, it is a fertile hunting ground for long-term wealth builders.

So today, let's discuss three US stocks that I think have the potential to make ASX investors a lot of money.

3 US stocks that could help ASX investors build wealth

Meta Platforms Inc (NASDAQ: META)

It's easy to forget that the US stock behind the ubiquitous social media platforms of Instagram and Facebook is now known as Meta. Despite this company's investments in the 'metaverse' looking less than fruitful, its earnings engines are still firing with gusto. In its most recent quarterly report, Meta revealed that its revenues were up a staggering 26% year-on-year to US$51 billion.

This was thanks in part to more ad impressions, and higher revenue received from each ad. The company also enjoyed an 18% boost in income from operations to US$20.5 billion.

Despite this, Meta stock is currently in a bit of a slump, down almost 23% from where it was three months ago. This could be a good time to get in on this massive and highly influential company.

Mastercard Inc (NYSE: MA)

Next up, we have payments stock Mastercard. I've long been bullish on this payments network provider, given the global shift towards electronic payments. Although cashless transactions are the norm in Australia, it's easy to forget that that is not the case in many other countries. But that is changing, and Mastercard stands to be a prime beneficiary from what could be a decades-long tailwind.

This is evident in this US stock's most recent quarterly earnings from late last month. This showed Mastercard enjoying a 17% rise in revenues over the quarter to US$8.6 billion. Operating income was up 26% to US$5.1 billion, while earnings per share rose 23% to US$4.34.

With numbers like that, I think this US stock is an exciting long-term wealth builder.

Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B)

Warren Buffett's Berkshire Hathaway is one of the most famous companies in the world. It is a massive conglomerate consisting of entities underlying businesses (such as Dairy Queen and Duracell), as well as part-investments in other stocks (most famously, Apple and Coca-Cola).

Given Warren Buffett's impending retirement as CEO, investors have been, understandably, a little subdued on this company. Berkshire stock is up around 9.6% over the past 12 months. Whilst that's an objectively decent return, it significantly trails the S&P 500's 12.6%.

This might be a good time to buy this company, though. Although Buffett's leadership will be a significant loss, I think he has set up an admirable succession plan. Long-time deputy Greg Abel will take the reins in January, a man who has Buffett's unequivocal confidence. That says a lot, and thus, I am confident Berkshire will be a wonderful investment for years to come.

The post The 3 US stocks could make ASX investors very rich appeared first on The Motley Fool Australia.

That's understandable. After all, property investing is the great Australian obsession. And the franking credits that ASX shares pay out are particularly lucrative for retirees and anyone who has their superannuation fund in pension phase.

However, I think it is a mistake for anyone with an SMSF to ignore what is on offer over on the US stock market.

The United States houses some of, if not most of, the best companies in the world. Having a slice of that action working towards your retirement can only be a good thing. At least in my view. So today, let's talk about five US stocks that I think anyone with an SMSF needs in their portfolios.

5 US stocks to consider for an SMSF

Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL)

First up, we have the Google-owner Alphabet. Everyone knows the dominance of the Google Search engine, one of the most popular tools on the internet. This simple gateway underpins this company's globally-dominant advertising business, and underpins many of Alphabet's other products, including Google Maps and the Chrome browser.

Alphabet's investment in artificial intelligence (AI), including through its popular Gemini platform, is, in my view, setting the company up well for continued dominance.

Mastercard Inc (NYSE: MA)

Mastercard is another well-known name that I think will be a valuable addition to any SMSF. As almost all Australians would know, the world is transitioning away from cash payments and towards electronic funds transfers.

Mastercard is a direct beneficiary of this, with its shares delivering breakneck returns for years now. With many emerging markets still in the infancy of this trend, I think Mastercard is poised to enjoy several decades of strong growth.

Microsoft Corporation (NASDAQ: MSFT)

Back to another member of the 'Magnificent 7' now, Microsoft is another company that I think is primed for continued success. This technology giant's strength comes from its diversity.

For one, its popular Windows and Office platforms continue to see enduring success. But Microsoft is also emerging as an AI leader thanks to Copilot. Additionally, it is also a gaming heavyweight, thanks to its Xbox line and recent acquisition of Activision-Blizzard. In my view, Microsoft is an educated bet on the future, and worthy of a place in any SMSF.

Procter & Gamble Inc (NYSE: PG)

Turning to a slightly more 'boring' company, at least in the eyes of many, we have consumer staples titan Procter & Gamble. This stock is the name behind many famous household brands. These include Pantene, Old Spice, Gillette, Oral-B and Fairy.

The beauty of these products is that people tend to buy them in all economic conditions. That makes Procter & Gamble a very defensive US stock for an SMSF. Given that defensiveness is a trait valued by many retirees, this company is arguably a perfect fit for their retirement funds.

McDonald's Corporation (NYSE: MCD)

We could make a very similar argument for our final SMSF stock – the world-famous McDonald's. McDonald's has been a pioneer and market leader in fast food ever since its inception in the 1950s.

Today, it is one of the most recognised brands on the planet and owns what could arguably be described as the world's best property portfolio. Despite its relatively long history, this company continues to innovate and attract legions of customers, who tend to flock through the Golden Arches regardless of what the overall economy is doing.

The post 5 US stocks to consider for your SMSF appeared first on The Motley Fool Australia.

Exchange-traded funds (ETFs) provide a simple answer.

With one trade, you can gain exposure to a diversified basket of shares, reducing the risk of putting all your eggs in one basket.

But where to start? Here are three ASX ETFs that could be excellent building blocks for new investors in 2026 and beyond.

iShares S&P 500 ETF (ASX: IVV)

The iShares S&P 500 ETF is a popular option and for good reason. It gives investors exposure to 500 of the largest listed stocks in the United States. These include global giants like Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), and Walmart (NYSE: WMT).

The US market has been a long-term powerhouse for wealth creation, and many of the businesses in the iShares S&P 500 ETF are global leaders in their industries. For beginners, this ASX ETF provides a low-cost, convenient way to tap into US growth without needing to pick individual stocks.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

For investors wanting global reach beyond the US, the Vanguard MSCI Index International Shares ETF is a strong choice. This ASX ETF holds more than 1,200 stocks across developed markets, giving you exposure to European, Japanese, and Canadian stocks alongside US names.

Current holdings include Nestle (SWX: NESN), HSBC (LSE: HSBA), SAP SE (FRA: SAP), Toyota Motor Corporation (TYO: 7203), and Royal Bank of Canada (TSX: RY). By spreading your holdings across multiple regions, the Vanguard MSCI Index International Shares ETF helps smooth out the risks of being tied to any single market and offers instant global diversification.

Betashares Global Quality Leaders ETF (ASX: QLTY)

The Betashares Global Quality Leaders ETF could be another great option for beginners. It focuses on quality rather than quantity. It invests in around 150 global stocks that score highly on measures like profitability, strong balance sheets, and earnings stability.

Holdings include names like payments giant Mastercard (NYSE: MA), design leader Adobe (NASDAQ: ADBE), luxury products owner Hermes International, and sleep disorder treatment company ResMed Inc (ASX: RMD). These businesses tend to be more resilient through economic cycles, which can give new investors confidence that they are buying into companies with long-term staying power.

This fund was recently named as one to consider buying by the team at Betashares.

The post The best ASX ETFs for new investors in 2026 appeared first on The Motley Fool Australia.

The US is, quite simply and indisputably, home to most of the best companies in the world. Think about the goods and services we all use on a daily basis in the workplace. Whether it be Microsoft's Office, Teams or Windows, Adobe's Photoshop or Alphabet's Google Search or YouTube, these products are at the forefront of workplace productivity. And they are all owned by US stocks. It's a similar story at home. Chances are, most readers have some Colgate toothpaste, Gillette razors, Fairy dishwashing liquid or Coca-Cola sitting on a shelf somewhere as we speak.

ASX shares are great, but it is the US markets that really offer investors a chance to own a slice of the best businesses in the world. At least in my view.

So with that in mind, here are ten US stocks that I would buy for my self-managed superannuation fund (if I had one, that is) today.

10 US stocks I would pick for a superannuation fund today

Starting off, let's go for Microsoft Corporation (NASDAQ: MSFT), Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), and Amazon.com Inc (NASDAQ: AMZN). These three members of the 'Magnificent 7' are all dominant in their own spaces. Microsoft has an impressive array of workplace software, which we touched on above. Together with LinkedIn, they form an indispensable part of many workplaces today, which I don't see changing anytime soon. Additionally, it has a large presence in the gaming space with its Xbox brand.

We could say the same for Alphabet. It's hard to overstate how valuable Google Search is to everyday work and life. With a near monopoly on the global search market, Alphabet is a tried-and-true winner at this point. YouTube is also incredibly popular, as is the Gemini AI platform and Google Cloud.

E-commerce titan Amazon is also a sure bet for a superannuation fund in my view. Amazon is globally dominant, with its sprawling online marketplace offering an ever-increasing range of products. This company is also a leader in backend cloud services through its AWS platform, which makes up an increasingly large portion of the company's profits. Amazon is the only company on this list that doesn't pay a dividend. But I think it will start soon, which is enough to get it on this list.

Adding some more US tech stocks 

Continuing the 'Magnificent 7' tech theme, I think NVIDIA Corporation (NASDAQ: NVDA) is another stock worthy of inclusion in a super fund. Nvidia has the potential to grow at an impressive pace, despite its US$4 trillion size. Being the leader in chip and artificial intelligence hardware is a license to print money in 2025, and Nvidia has proven it can do so.

Moving outside the Magnificent 7 now, let's talk about Mastercard Inc (NYSE: MA). Mastercard is one of those companies that doesn't make headlines too often, but has still been growing at a healthy pace for many years now. The global shift to cashless payments continues to march on, and Mastercard is a prime beneficiary of this. This is a phenomenal 'set-and-forget' stock to buy for a super fund.

Some consumer staples stocks for a super fund

As is our next company, the famous Coca-Cola Co (NYSE: KO). Coke is one of the most successful companies of all time, and given the sheer volume of drinks that it continues to sell, it looks set to remain so. People simply love Coca-Cola, as well as Sprite, Fanta, Mother and the myriad of other drinks in this company's stable. 

One of Coca-Cola's most famous backers is the legendary Warren Buffett, whose company, Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B) is our next stock. Although Berkshire is famous for its massive historical returns, there is an elephant in the room – Buffett's impending retirement. Although the 95-year-old will step down from Berkshire at the end of this year, I think Buffett has set the company up for generations of success, thanks to Berkshire's massive portfolio of high-quality businesses.

Another company that Buffett has invested in before is Procter & Gamble Inc (NYSE: PG), which is our next US stock worth discussing.

Brand power

This company is the business behind the Gillette and Fairy names we discussed earlier, as well as other popular household brands like Oral-B, Tide, Pantene, Old Spice and Vicks. These products are all life essentials, and their brands command a lot of goodwill and trust right around the world. I can't think of better attributes that a US stock can offer a superannuation fund.

Continuing with the consumer staples theme, Walmart Inc (NYSE: WMT) is another US stock that would do well in a super fund. Walmart is a dominant supermarket chain in the United States, with a growing international presence, too. It has enduring popularity amongst consumers thanks to its highly competitive prices. 

In my opinion, it is highly likely that Walmart will continue to be the first choice of many Americans when it comes to stocking their households. As such, it's a company that I regard as a rock-solid, buy-and-hold investment.

Finally, let's talk about a company we all know and may or may not love. McDonald's Corp (NYSE: MCD) is one of the most famous brands in the world, and is available almost anywhere in the world. Its logo and products have become part of popular culture, and remain enormously popular wherever you go. That makes this US stock a great buy for investors worried about inflation, recessions or other kinds of economic problems.

The post 10 US dividend stocks I'd buy for a superannuation fund today appeared first on The Motley Fool Australia.

In general, Warren Buffett has stayed away from tech companies in Berkshire Hathaway's investment portfolio. But one big tech trend has expanded well beyond tech companies: artificial intelligence (AI). AI is everywhere, and if a business isn't using it to improve productivity and reduce costs, it's going to fall behind.

In fact, some of Berkshire's biggest investments are looking to advance AI research, with clear business benefits if they can improve their algorithms and effectively implement new use cases for generative AI. As such, about 40% of Berkshire's $293 billion portfolio is invested in five companies pushing AI forward.

1. Apple (21.8% of portfolio value)

Apple (NASDAQ: AAPL) has been slow to develop generative AI capabilities. After showing off plans for its Apple Intelligence system over a year ago, the company made very slow progress. Meanwhile, other big tech names continue to push new models and capabilities to their platforms, leaving Apple in the dust.

Apple's biggest challenge is maintaining security and privacy for its users. As a result, it's focused on on-device AI. Practically every other AI system relies on remote servers with powerful GPUs loaded with tons of high-bandwidth memory. That makes them much more powerful, but far less private. As a result, Apple's handicapped itself by focusing on capabilities it can run on an iPhone or Mac.

There's still a lot of time for Apple to catch up though. Its ecosystem of products still has very high retention rates, and with an expanding services segment, more and more users are unlikely to give up their iPhone. In fact, that observation is what led Buffett to make his initial investment in Apple. Its strong brand and customer loyalty give it a massive competitive advantage.

Apple is reportedly exploring potential acquisitions that could expand its AI capabilities, including the potential purchase of Perplexity, an AI-powered search engine. With $133 billion in cash and marketable securities on its balance sheet, Apple can afford to make a big acquisition if it needs to.

Apple stock isn't exactly cheap right now, though. The stock currently trades for about 30 times forward earnings expectations. That high price may be why Buffett sold off about two-thirds of Berkshire's stake in the company last year.

2. Amazon (0.8%)

Amazon (NASDAQ: AMZN) was also slow to catch onto the AI trend relative to its peers in cloud computing. It worked quickly to catch up, though, developing Amazon Bedrock and acquiring a significant stake in Anthropic, ensuring access to leading edge models and a massive customer for Amazon Web Services.

Since mid-2023, Amazon's cloud computing segment, AWS, has reaccelerated its growth, driving strong demand for AI services on its platform. In fact, management says it remains supply constrained and committed to spending about $100 billion on capital expenditures this year, mostly going toward building new data centers.

Meanwhile, Amazon's integrated AI capabilities into its logistics network to ensure inventory is well positioned across its warehouses in the United States. That's enabled it to offer more items with one-day shipping for Prime members and reduce its shipping expenses per unit. As a result, Amazon's retail business has seen strong operating margin improvement over the last few years.

Amazon's decision to sink tons of cash into building new data centers to meet the insatiable demand for AI-related compute has weighed on its free cash flow. As a result, the stock looks expensive relative to its free cash flow over the trailing 12 months. But if and when Amazon takes its foot off the gas with capital spending, it should prove a good value at its current price with strong future free cash flows.

3. American Express (15.8%)

Even a company that's 175 years old can still prove an innovator in AI. American Express (NYSE: AXP) looked to incorporate AI across its business, and it's helping improve its operations.

American Express uses AI to help identify and prevent fraud for its customers. Its algorithms can analyze real-time data and help make a decision whether a transaction is suspicious and needs further confirmation or not.

Amex also uses AI to target offers for potential and existing customers. These help improve its marketing efforts, optimizing customer acquisition costs and retention rates.

Internally, Amex integrated AI into its IT support system, which dramatically reduced the number of tickets requiring human intervention. Its travel concierge team also uses generative AI tools to curate travel recommendations personalized for each customer based on their purchasing habits with Amex.

One of the fastest growing sources of revenue for Amex over the past few years has been the annual fees on its cards. Its ability to continue raising the fees on its products speaks to the strength of its brand and its ability to provide better customer experience and create more enticing offers for its customers.

With the stock trading at 20 times earnings, shares still look relatively attractive. The company is pushing its revenue growth higher led by higher annual fees without losing customers, and that's pushing its margins higher as well. As such, the company's expected to produce double-digit earnings-per-share growth.

4. & 5. Visa (1%) and Mastercard (0.8%)

Visa (NYSE: V) and Mastercard (NYSE: MA) are both using AI in similar ways to improve their payments networks. Like Amex, they've each developed their own machine learning algorithms to help prevent fraudulent transactions. But they're also developing tools for AI that could increase the number of transactions on their payments networks.

Visa and Mastercard are developing systems that will enable AI agents to use credit card credentials to make transactions on behalf of individuals or businesses. By working with AI systems to ensure security, both payments networks are positioning themselves to be at the center of advancements in agentic AI capabilities. For example, you could have AI restock office supplies and cater next week's lunch, and it will simply do it without any further input.

Both payments networks are well positioned, winning the vast majority of electronic payments partnerships with credit card issuing banks. As the two largest payments networks, they exhibit strong economies of scale and produce very high margins. And if AI can push more transactions onto their networks, it could see improved revenue and profits over the next few years.

The two stocks trade for much higher valuations than American Express, at 31 times earnings for Visa and 35 times earnings for the smaller, but faster-growing Mastercard. Those valuations may be a bit high for both companies, as they're expected to grow revenue at a high-single-digit to low-double-digit rate with modest operating margin expansion. While both companies have strong competitive moats thanks to their scale, it might be worth holding off for a better price.

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

The post Warren Buffett has 40% of Berkshire Hathaway's $293 billion portfolio invested in 5 artificial intelligence (AI) stocks appeared first on The Motley Fool Australia.

But even so, I still own quite a few shares that pay meaningful dividend income every year. As it happens, most of these investments have also delivered meaningful capital growth. Today, let's discuss the biggest dividend payers in my personal portfolio.

The three biggest dividend payers in my ASX share portfolio

MFF Capital Investments Ltd (ASX: MFF)

First up is the listed investment company (LIC), MFF Capital. MFF, like most LICs, invests in an underlying portfolio of shares. In this case, it is mostly American stocks. This LIC is run by Magellan Financial Group Ltd (ASX: MFG) co-founder Chris McKay. I like Mackay's Buffett-esque habit of buying high-quality companies at decent prices, and holding them for as long as possible.

Some of MFF's entrenched tenants include Mastercard, Visa, Amazon and Bank of America.

What's great about MFF is that it pays a strong, fully franked and rising dividend, despite its low-yield portfolio. Between 2021 and 2024, the company raised its annual (fully franked) payouts from 6.5 cents to 13 cents per share. Today, the company trades with a dividend yield of just under 3.4%, although I am lucky to have a yield-on-cost far higher than that. As such, MFF is one of the largest dividend payers in my ASX portfolio today.

Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

Next up, we have an entrant in this exchange-traded fund (ETF) from popular provider Vanguard. The Vanguard Australian Small Companies ETF. This index fund tracks around 170 shares from the smaller end of the ASX spectrum. I find it complements a classic index fund like the Vanguard Australian Shares Index ETF (ASX: VAS) that I also hold rather well.

It might not seem like it, but this ETF has paid me some massive dividends in recent years. When this ETF pays out its next dividend distribution on 16 July later this month, investors will have enjoyed a total of $5.37 in dividend distributions per unit. At the current VSO price of $68.40, this equates to a monstrous yield of 7.85%.

Schwab US Dividend Equity ETF (NYSE: SCHD)

Finally, a US-based ETF rounds out my portfolio's most lucrative dividend stocks. The Schwab US Dividend Equity ETF is a fund that holds a large portfolio of US stocks that all demonstrate reliable and rising dividend income potential. It holds a range of shares in this endeavour, including Texas Instruments, Chevron, PepsiCo, Altria and Coca-Cola.

Since SCHD ETF tends to hold only stocks that raise their dividends like clockwork, it can offer the same to its investors. I've only owned this ETF for a year or so, but already, my dividend income has risen meaningfully. Today, thanks in part to its dividends coming in US dollars, it is a major, and welcome, income payer in my portfolio.

The post Here are the 3 biggest dividend payers in my ASX stock portfolio today appeared first on The Motley Fool Australia.

In the course of tallying up all of the dividends and franking credits I've received over the year, it dawned on me that, as a proportion of my total portfolio's value, the dividends that I've brought in over the past 12 months or so give my portfolio a dividend yield of just 1.78%.

This came as quite a surprise, as I expected something in the 3% ballpark. After all, I own quite a few dividend-paying shares, which are no slouches in paying out big, fully franked yields. For instance, I count the likes of Telstra Corporation Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES), and National Australia Bank Ltd (ASX: NAB) amongst my many holdings.

In addition, some of my favourite stocks, such as MFF Capital Ltd (ASX: MFF), Plato Income Maximiser Ltd (ASX: PL8), and Endeavour Group Ltd (ASX: EDV), all sport substantial yields.

But, upon deeper analysis, this rather low yield isn't too surprising.

Dividends and yields in my ASX share portfolio

Although the dividend shares above make up a decent chunk of my portfolio, they are still outweighed by the investments that don't pay much of an income. For instance, four of my largest positions are Google-owner Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), Meta Platforms Inc (NASDAQ: META), Mastercard Inc (NYSE: MA), and Visa Inc (NYSE: V). None of these stocks is currently trading on a dividend yield greater than 1%.

Other positions pay no income at all. I have a legacy position in Tesla Inc (NASDAQ: TSLA), as well as substantial investments in Duolingo Inc (NASDAQ: DUOL), Amazon.com Inc (NASDAQ: AMZN), Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B), and even Bitcoin (CRYPTO: BTC). None of these investments pays any kind of yield.

Now, I love receiving a dividend as much as anyone. Yet, my ASX share portfolio's rather pitiful dividend yield doesn't bother me at all.

There are two reasons why.

A low dividend yield can be a wonderful thing

Firstly, most of my holdings that either pay very low dividends or none at all have the capacity to. They just choose to reinvest the money that could be spent on dividends back into their respective businesses. Usually, they can do this at a very high rate of return, one that I probably wouldn't be able to replicate if I received the cash instead.

As such, I'm happy to see the money go back into these companies, with the expectation that they will generate even greater returns (and probably dividends) down the road.

None other than legendary investor Warren Buffett has said that this is a great thing to witness. Here's his response when asked about this matter back in 2008:

The post My ASX share portfolio's yield is 1.8%. Here's why I'm ok with that appeared first on The Motley Fool Australia.

According to CNBC's Berkshire portfolio tracker, Buffett, as of 31 March, has US$347.7 billion in cash and cash-equivalent investments ready to go at Berkshire. That cash pile is worth more than the combined public stock portfolio of Berkshire right now (although not if combined with its private, unlisted investments). It's also the highest cash position Berkshire has ever had. Not a bad problem to have, all things considered.

But let's move from the factual to the hypothetical. If I had a cash pile as large as Warren Buffett's, what would I spend it on?

Well, apart from a nice house and perhaps a vintage Aston Martin DB5, I would, of course, buy stocks.

The ASX shares I would buy with Buffett's cash pile

I would be happy to spend a large chunk of the pile on a simple index fund tracking ASX shares, probably the Vanguard Australian Shares Index ETF (ASX: VAS). This exchange-traded fund (ETF) offers investors exposure to the largest 300 shares listed on the ASX, weighted by market capitalisation.

This is a great hands-off investment that will likely grow in line with the broader Australian economy over time, which I find appealing as a cornerstone investment.

Following VAS, I would then opt for some additional ASX shares that balance a supply of reliable dividends with some of the ASX's most exciting growth stocks.

For dividends, I would choose a mixture of Washington H. Soul Pattinson and Co Ltd (ASX: SOL), Coles Group Ltd (ASX: COL), Telstra Group Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES), and National Australia Bank Ltd (ASX: NAB). These companies all have a strong history of providing hefty and steadily rising dividends, which is a trait Buffett himself often looks for.

I would add investments in TechnologyOne Ltd (ASX: TNE), REA Group Ltd (ASX: REA), and Xero Ltd (ASX: XRO) for some growth exposure too.

Never bet against America

But I wouldn't just stick with ASX shares. Warren Buffett himself has expressed his belief that the US markets, and the companies that reside on them, are the world's best. As such, I would probably invest more of that enormous cash pile into US stocks than those on the ASX.

My top priorities would be the companies that are leaders in their fields and have a long history of delivering for shareholders. I would start with the magnificent seven stalwarts Amazon.com Inc (NASDAQ: AMZN), Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), and Microsoft Corporation (NASDAQ: MSFT). I think these names are the best that the US currently has to offer, and have long growth runways still ahead of them.

Then, I would add quality names like Mastercard Inc (NYSE: MA), Netflix Inc (NASDAQ: NFLX), American Express Inc (NYSE: AXP), and Costco Wholesale Corp (NASDAQ: COST).

Perhaps I would also consider Caterpillar Inc (NYSE: CAT), McDonald's Corporation (NYSE: MCD), and Procter & Gamble Inc (NYSE: PG).

With these stocks, which range from growth engine companies like Mastercard to consumer staples fortresses like Procter & Gamble, I think I would have a portfolio that could look after my family's financial interests for the rest of my days.

Shame about the lack of a Buffett-style cash pile, though.

.

The post If I had a big cash pile like Warren Buffett, here's how I'd spend it in 2025 appeared first on The Motley Fool Australia.

The ASX is certainly home to many quality stocks, including famous blue-chip investments like Commonwealth Bank of Australia (ASX: CBA), Telstra Group Ltd (ASX: TLS), and Woolworths Group Ltd (ASX: WOW). But these businesses, while great, just don't offer the size, scale, and global dominance that many prominent US stocks, such as Apple, Amazon, and Colgate-Palmolive, do.

As such, it's my firm belief that most ASX investors should look to add some quality US shares to their portfolios.

But which US shares to buy? Here are three that I personally own and think would suit the needs of most ASX investors today.

3 US shares to consider buying today

Microsoft Corporation (NASDAQ: MSFT)

First up, we have the technology giant Microsoft. You probably know Microsoft from its flagship Windows operating system and popular Office productivity software suite. But Microsoft offers far more than just those products.

I consider this company to be a 'tech ETF' of sorts, as it has its fingers in so many pies. In addition to Windows and Office, these pies include its Azure cloud platform (and associated data centre infrastructure), its gaming division, spearheaded by the Xbox brand and the acquisition of Activision Blizzard a few years ago, and its Copilot AI platform. Not to mention its LinkedIn social media network.

Despite its gargantuan size (US$1.9 trillion at last count), Microsoft is still growing at a rapid pace. Back in February, the company reported quarterly revenue growth of 12% (year on year) to US$69.6 billion, earnings per share (EPS) growth of 10% to US$3.23, and a 10% spike in net income to US$24.1 billion.

Costco Wholesale Corp (NASDAQ: COST)

Next up, we have another US stock that you may have heard of in supermarket operator Costco Wholesale.

Costco is famous for its massive warehouses, where customers can buy goods in bulk. The company is also renowned for its unusual membership model, where shoppers have to pay an annual fee to enjoy the privilege of even entering a Costco.

This model has brought the company an unprecedented level of global success. But unlike most established supermarket operators, Costco is still growing at a healthy clip. It recently reported a 9% rise in quarterly net revenues to US$63.72 billion, alongside a 2.6% increase in net income.

Given Costco's defensive nature as a supermarket business and its unique and compelling business model, I think this US stock would be a happy home in most ASX investors' portfolios today.

Mastercard Inc (NYSE: MA)

Finally, we have a US stock that is probably in most readers' wallets as we speak. Mastercard is a global payments giant. Along with its archrival Visa, Mastercard forms a near-global duopoly on the infrastructure that supports electronic payments, credit cards, and bank cards.

I believe that the global shift to electronic payments will only continue to accelerate in the years ahead. If that is the case, Mastercard will be a major beneficiary of this trend.

This US stock has been a growth beast over the past decade and continues to expand at a rapid pace. In January, the company posted year-on-year revenue growth of 14% to US$7.5 billion, with earnings per share rocketing 20.1% to US$3.82.

Given this growth and the tailwinds still blowing behind it, I think Mastercard is another top US stock pick for any long-term ASX investor today.

The post Are these the best US stocks to consider buying right now? appeared first on The Motley Fool Australia.

But exactly how does one position a portfolio for downside protection? That's what we'll be diving into today.

There are two underlying ways that one can protect one's portfolio against downside risk in the market.

Is cash king?

The first way is by holding 'defensive' asset classes outside the share market, such as government bonds and cash.

Government bonds and cash are both asset classes that provide income certainty and capital protection to investors. These assets usually don't respond to investor fear like shares do. The value of cash does not change at all, at least in the short term. Meanwhile, government bonds can often rise in value as share markets fall.

The more one allocates to cash and bonds, the less exposed their portfolios will be to downside risk on the stock market.

This might suit defensive investors like retirees who rely on their portfolios for income and can least afford to risk permanent capital loss.

However, this approach comes with a big caveat. There is a price to pay for 'safety' on the markets. Cash and bonds do not offer anything close to the long-term returns that shares do. So, if an investor is more than a few years away from retirement, using these assets instead of shares in an investing portfolio is probably not the best use of one's capital.

The second way to protect a portfolio from downside protection involves investing in shares. But only in companies that have a high-quality, resilient earnings base.

Using quality ASX shares to protect your portfolio

I'll use three of my own personal portfolio holdings to demonstrate: Telstra Group Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES) and Mastercard Inc (NYSE: MA).

All three of these stocks have, at least in my opinion, high-quality, resilient earnings bases. This doesn't mean their share prices won't go down in a market crash. Remember, those events are driven by fear, not logic. But it does mean that if there is a recession, period of high inflation or some other kind of economic malady, these companies won't see a potentially fatal drop in revenues or earnings.

If there is a recession or other economic storm, how many people will stop using their Telstra data plans or home internet connection? How many will forgo buying clothes and appliances at Kmart or pot plants at Bunnings? Or be put off from tapping their Mastercard-powered cards or phones?

I'd wager not too many. If a company's profits and earnings are resilient and continue to grow over time, its share price should remain a prudent investment over long-term horizons. As famed investor (and Warren Buffett mentor) Benjamin Graham once said, "In the short run, the market is a voting machine, but in the long run, it is a weighing machine".

Investing in these types of companies is how I protect my own portfolio from downside risk. It doesn't mean that your portfolio won't suffer a severe correction every once in a while. But it does mean that the pain will usually be short-lived.

The post How I position my portfolio for downside protection appeared first on The Motley Fool Australia.

Even if you're not seeking to maximise your dividend income today, chances are you are hoping that your ASX share portfolio will one day let you retire comfortably by providing you with a stream of (preferably fully franked) passive dividend income.

That's certainly the case with my own stock portfolio.

I've been investing in ASX shares for many years now, and have been fortunate enough to build up a decent portfolio. I do receive some dividends from this portfolio, but not a meaningful stream.

Many of my largest investments are in companies that produce limited or no income. That includes Tesla, Amazon, Apple and Duolingo.

In fact, a recent analysis of my share portfolio informed me that its dividend yield is sitting at an unimpressive 1.9% or so.

This doesn't bother me. I would love to be in a position to retire tomorrow, but the reality is that I'm a long way from being there (sorry, you'll have to keep reading my articles for a while yet). As such, I am comfortable that my portfolio is (hopefully) structured to maximise overall returns rather than just a hefty stream of dividend income.

However, that doesn't mean I'm not trying to grow my dividend income meaningfully. As long as an investment offers a healthy growth runway, I will happily accept any dividend income it pays me.

In fact, I hope to earn $20,000 in annual dividend income from my ASX shares within the next few years.

Getting to $20,000 in annual passive income

If I wished, I could sell all of my investments, put the proceeds into bank stocks and other big dividend payers, and probably get close to $20k a year in dividend income today. However, I think I'll be far better off in the long run by sticking to my current strategy of investing in companies that offer growth as well as income.

To hit this $20k goal, I am investing in a handful of ASX shares that have demonstrated an ability to rapidly raise their dividend payments every year and look likely to be able to continue to do so.

Continued investment and reinvestment of dividends, alongside regular dividend increases from the companies themselves, is how I'll (eventually) get there.

The investments I've prioritised for this endeavour include Washington H. Soul Pattinson and Co Ltd (ASX: SOL), Mastercard, Visa, Microsoft, Meta Platforms and Alphabet.

Let's use Soul Patts as an example. For one, this company has increased its annual dividend every year for almost 25 years. But over the past three financial years (FY22-24), its dividend has increased at an average compounded annual rate of 15.3%.

If this growth continues for the next three years and beyond, it will do a lot of the legwork in boosting my portfolio's income.

I have also recently established positions in American exchange-traded funds (ETFs) that prioritise selecting companies that have shown healthy dividend growth in the past. These include the Schwab US Dividend Equity ETF (NYSE: SCHD) and the iShares Core Dividend Growth ETF (NYSE: DGRO).

By continuously investing in these top-tier investments, I am hoping that my annual dividend income will continue to snowball and hit $20,000 per year in the next few years. I'll let you know how it goes.

The post Here's how I'm trying to build up my ASX share portfolio to earn $20,000 passive income each year appeared first on The Motley Fool Australia.

The ASX has many fantastic companies to be sure. But world-dominating behemoths? Not so much. That's why many investors, myself included, also like to buy US stocks.

The American markets are home to companies that offer size and scale that ASX stocks can barely dream of. Think of the likes of Apple or Amazon. As such, they make for a fertile hunting ground for top companies to add to our ASX portfolios.

One top US stock that I personally own and would recommend to any ASX investor is Mastercard Inc (NYSE: MA).

You've probably heard of Mastercard and probably even have its logo, or that of its arch-rival Visa Inc (NYSE: V), on a card in your wallet right now.

Mastercard is an interesting company in that it functions almost like an infrastructure company. The infrastructure in question is Mastercard's global payments network. This company acts as a middleman between customers, their bank accounts, and merchants.

Want to pay for something using a card or phone? Mastercard makes it happen quickly and securely, charging a small fee for the trouble of course.

But what makes this payments stock a great buy for ASX investors?

Why ASX investors should buy this US stock

Well, to kick things off, Mastercard is at the forefront of a very powerful and very global tailwind right now – the transition away from cash payments. Here in Australia, this transition is in an advanced state, with the vast majority of everyday transactions now cashless.

But in other parts of the world, even in advanced economies like the United States, cash is still king. Yet, I think the increasing prevalence of electronic payments in most countries will inevitably continue. As such, Mastercard stands to benefit from this trend more than almost any other company, aside from Visa of course.

But enough of the vibe talk; let's get to some numbers. As our Fool colleagues in the States recently reported, Mastercard grew its annual revenues by 22% in 2021, 23% in 2022, and 13% in 2023. The company is on track to hit roughly 16% growth in 2024.

The company's earnings per share (EPS) have been growing even faster, with 34% growth in 2022, 15% in 2023 and 20% over the first nine months of 2024.

With numbers like that, it's hard to argue this company isn't a growth beast.

But don't take my word for it. Take legendary investor Warren Buffett's. Buffett has owned Mastercard stock through his company, Berkshire Hathaway, for years.

To play us out, here's a clip of Buffett stating that he wished he had bought more back in 2018:

The post A top-performing US stock that Australian investors really should own appeared first on The Motley Fool Australia.

Berkshire Hathaway owns dozens of businesses in its public equities portfolio, with well-known names like Apple, Coca-Cola, and Chevron commanding sizable allocations.

But the Oracle of Omaha also likes to own financial services companies. There's one in particular, which the conglomerate has owned since 2011, that might fly under the radar. Is this Warren Buffett stock a smart buying opportunity right now?

Tremendous gains

Bank of America and American Express receive a lot of attention because they are two of the top Buffett stocks in the financial sector. However, investors can't forget about Mastercard (NYSE: MA), one of the leading global card payment businesses.

It has a massive market cap of $482 billion. This huge value has come from impressive shareholder gains. Since Mastercard's initial public offering in 2006, the company has generated a total return of 12,470%. This means that a $1,000 investment made back then would be worth $126,000 today.

Favourable attributes

Buffett's philosophy centres on owning high-quality businesses for as long as possible. Viewed in this light, there is no shortage of reasons to appreciate Mastercard as a wonderful company.

For starters, the business registers durable growth, thanks to the worldwide transition from cash and paper-based forms of payment to digital and card-based transactions. This ongoing secular trend has propelled revenue from $2.2 billion a decade ago in the third quarter of 2014 to $7.4 billion in the latest quarter.

That top-line growth has been driven by rising transaction dollars being processed and more cards in circulation. Today, the business is behind only Visa in the United States in total payment volume.

Mastercard is incredibly profitable, turning a significant portion of sales into earnings. In the past five years, the company's operating margin has averaged a superb 56.1%. And in the last nine months, the business raked in over $9.9 billion in cash flow from operations, using the proceeds to pay dividends and repurchase shares. The company's pristine financial condition is likely something that Buffett and his team hold in high regard.

Companies that possess an economic moat are able to defend their industry positions. Mastercard benefits from powerful network effects. Its card base of 3.1 billion, coupled with the 130 million or so merchant locations that accept Mastercard, make the entire platform extremely valuable to new and existing stakeholders as it gets bigger.

Besides network effects, another qualitative factor that investors can't ignore is that Mastercard is somewhat protected from the threat of disruption. The rise of fintech platforms and cryptocurrencies hasn't prevented the business from continuing to grow at a healthy pace because it is so entrenched in our economy.

Card networks seem to always be under scrutiny by regulators precisely because they have such dominant positions and generate outsize profits. But this points to just how successful these companies have become.

And with the new presidential administration leaning toward a more laid-back approach in terms of regulatory pressure, I'm not too concerned about Mastercard in this situation.

Mastercard's valuation

Mastercard is a great business in terms of quality. But before you rush to buy this Buffett stock, it's crucial to look at the valuation as well. Investors must make sure they aren't overpaying, no matter how wonderful a company is.

As of this writing, shares of Mastercard trade at a price-to-earnings ratio (P/E) of 40. That's more expensive than its trailing-10-year average. But it's not hard to argue that it deserves a premium valuation given the favorable traits discussed above.

However, investors might also lean toward practicing patience, waiting for any pullbacks to start buying shares. I believe this is the right move.

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

The post Is this Warren Buffett stock a smart buying opportunity? appeared first on The Motley Fool Australia.

When Warren Buffett gets something right, he really gets it right. The legendary investor's stock picks through the years have helped him become one of the wealthiest people on the planet.

But much of Buffett's success has stemmed from decisions he made a long time ago. What are examples of his best picks more recently? Here are Buffett's biggest winners over the past five years -- and whether or not they can keep winning in the future.

1. Apple

In his 2021 letter to Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) shareholders, Buffett wrote that the conglomerate had "four giants." Three of them were Berkshire subsidiaries: the company's insurance businesses (including Geico and General Re), railroad operator BNSF, and energy provider Berkshire Hathaway Energy. But Berkshire doesn't control one of those giants -- Apple (NASDAQ: AAPL).

Currently, Berkshire owns only a 5.8% stake in Apple. However, the tech stock ranks as Berkshire's top holding by far, representing 38.8% of the total portfolio. Buying such a huge position in Apple has proven to be one of Buffett's smartest moves ever. The stock has skyrocketed around 240% over the past five years.

It's no secret why Apple has delivered such a tremendous gain. The company's iPhone remains highly popular, especially with the shift to high-speed 5G networks. Apple's services business has also become a much bigger revenue driver in recent years.

2. Mastercard

Buffett has been a longtime fan of credit card stocks. Berkshire's portfolio includes American Express and Visa. The former ranks as Berkshire's No. 5 holding. But the biggest winner over the past five years has been Mastercard (NYSE: MA).

Mastercard's gain of more than 125% is due in part to a broad-based shift away from cash. A sharp increase in e-commerce also provided a nice boost.

Despite Mastercard's status as one of Buffett's biggest winners in recent years, it's still not one of his favorite stocks. Berkshire reduced its position in Mastercard in the fourth quarter of 2021. Mastercard now makes up only 0.4% of Berkshire's total portfolio.

3. Moody's

Buffett technically didn't decide to invest in Moody's (NYSE: MCO). Berkshire owned shares of Dun & Bradstreet in the past. It received shares of Moody's when D&B spun off the credit rating business in 2000.

While Berkshire later sold its stake in D&B, it retained a position in Moody's. That turned out to be a wise move. The stock more than doubled over the past five years and has delivered more than a 20x gain since the spin-off from D&B.

However, Buffett could have made even more money from his investment in Moody's. He sold some of the stock in 2009. The Oracle of Omaha referred to this as a "billion-dollar mistake" less than two years later.

Can they win in the future?

None of these three stocks are performing very well so far in 2022. Only Mastercard is beating the S&P 500. But can these stocks win in the future? I think so.

Apple remains a great stock to buy for the same reasons it's made Buffett so much money in the past. Demand should continue to be strong for iPhones for a long time to come. Apple has opportunities to extend its smartphone dominance by introducing augmented reality applications. 

Mastercard should benefit as digital payments replace cash in many cases. The company could especially profit as open banking (expanding interoperability between financial service providers) picks up momentum.

Moody's has a strong moat with its credit rating business. It also has significant growth potential for its analytics unit.

My view is that Apple, Mastercard, and Moody's should be big winners for Buffett over the next five years. And I think all three are good picks for investors who aren't worth close to $100 billion, too. Warren Buffett doesn't have to be the only person to really get it right.

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

The post These 3 US stocks were Warren Buffett's biggest winners over the past 5 years appeared first on The Motley Fool Australia.

For example, a retiree may appreciate the high dividends that an ASX bank share like Westpac Banking Corp (ASX: WBC) doles out. But a younger investor might wish to go for something with a bit more of a growth profile.

There's no right way to invest when it comes to shares (although there are many wrong ways).

With all this in mind, let's discuss how I allocate my own share market portfolio. As discussed above, this is what works for me, and my own strengths and weaknesses.

Now, I have many many different holdings across my portfolio. So I won't discuss all of them. But I will touch on some theses and strategies that I tend to follow, and explain why.

ASX shares, dividends and franking credits

So to start with, I own a mix of ASX and US shares. This is for many reasons. I love the franking credits and local knowledge that makes ASX investing so rewarding.

But I also love the currency, geographic and economic diversity that comes from investing in the United States. What's more, most of the best companies in the world call the US home.

My selection process is a rather simple one: I look for quality companies, usually with a strong brand, that have demonstrated competency and resiliency over a long period of time.

Let's start with the ASX shares. So I do like a share that pays dividends, preferably those of the fully franked variety. One of my oldest holdings is Telstra Corporation Ltd (ASX: TLS).

I bought Telstra back in 2018 when it was trading for under $2.80 a share. The market hated it then, but I saw a company with a dominant brand providing an essential service. I continue to hold it today for those same reasons.

Another ASX share that is a long-term favourite of mine is National Australia Bank Ltd (ASX: NAB). NAB doesn't have the pricing premium that Commonwealth Bank of Australia (ASX: CBA) does. But I still think it is one of the best-run ASX banks.

My favourite ASX share, though, is Washington H. Soul Pattinson and Co Ltd (ASX: SOL). I've discussed my love of Soul Patts before. But quite simply, it is a diversified market beater with an unmatched dividend record.

Looking across the pacific for my portfolio

Turning to US shares, and again my preference is strong brands and a proven track record. That's why my US shares include names like Apple, Microsoft, Mastercard, Alphabet, Nike and Amazon.

Tesla Inc (NASDAQ: TSLA) is another company that I own. When I first invested in the electric car maker, it was one of my riskier shares. But I have been delighted to see the company grow in size and scale (not to mention value).

Most of my other US shares are within the consumer staples sector. I love the resilience and stability that these kinds of shares can add to a portfolio, as well as the dividends, of course. Among my favourites are Coca-Cola, Pepsi, Starbucks and McDonald's.

Many of these companies have made a habit of raising their dividend every single year, so I have enjoyed watching my dividend income inch up steadily over the years.

So that's my ASX share portfolio in a nutshell and why I own the companies that I do. As I said, it may not be for everyone. But it works for me and my goals. And I sleep soundly every night. What more could one ask for?

The post Here's how I allocate my ASX share portfolio and why appeared first on The Motley Fool Australia.