How to Navigate the ASX: Uncovering Hidden Gems and Building Long-Term Wealth in 2024

Introduction:

"Hey everyone, welcome back to 'Beers with Rich.' I'm Rich, founder and head of investments at Under the Radar Report. Today, let's dive into the highlights of January and explore the exciting opportunities in the ASX share market." The beginning of the year is a great opportunity to take stock and asses where you are in your Building Wealth journey.


ASX Share Market Overview:

"January continued the momentum from late 2023, but with a few exceptions. We saw some unexpected shifts, like the significant selling in Google's Alphabet and unexpected rate cut scenarios in the US. However, what caught our attention at Under the Radar Report was the impressive 30% rise in the uranium price and the resilience of the iron ore market."


Investment Philosophy:

"The big point I want to make is that building wealth in the stock market is a long-term game. It's not about surfing in and out of shares but staying invested over multiple years. Regardless of where you are in your wealth-building journey, the key is not paying too much for shares.

No matter where you are in your journey, if you’re not paying much for stocks, you’ll profit. Those profits will grow exponentially over time.”


Opportunities in Overlooked Stocks:

"We've recently experienced strong returns from stocks like Ainsworth Game Technology (ASX: AGI), which we only covered a few months ago. The key here is to focus on stocks that aren't making headlines, trading at attractive cheap levels. That's what you want in your portfolio—profitable, sometimes dividend-paying shares that aren't in the spotlight."


Balancing Act - Value and Momentum:

"On the flip side, you also want to explore stocks that offer good value but might be a bit on the nose. Take Kogan (ASX KGN) as an example—a quick 30% return. The lesson here is clear: don't pay too much, and your downside is limited. This applies to every phase of your wealth-building journey.


Diversification and Resilience:

"We're recommending a diversified approach, especially holding 14 or more stocks in different sectors. It's like the resilience we see in Blue Chip stocks like Fortescue Metals, facing challenges but navigating through them because of their scale."

We’re finding with loads of stocks in Blue Chips and Small Caps that fit this criteria. You need to look at your portfolio and work out whether they are a good fit.

 


Upcoming Opportunities:

"Stay tuned for our next stock recommendation coming up next week. Over the past few years, our average return on new stocks has been around 30%. That's something you don't want to miss out on."


Global Market Insights:

"A quick fun fact: China is now the world's biggest car manufacturer, with exports growing 60% in 2023, driven by an 80% growth in electric vehicles. If you’re driving a Tesla, it was made in China. Keep an eye on the global market trends—they can significantly impact your ASX investments."


Investment Wisdom:

"Finally, let's talk about the shift in the market landscape. The days of riding on market momentum are over. Stock picking is the key. Alphabet's 7.5% loss highlights the dangers of paying solely for growth. Contrarian investing is the way to go now, looking for stocks with high expected returns that have been overlooked."

Diversification

" I can never stress this enough: you need to build your portfolio up to be able to withstand the stresses.  A good example in Blue Chip is Fortescue Metals. The iron ore miner is having big problems with its Iron Bridge project, I’m talking cost blowouts to the tune of $100m. But because it has scale, this is a bump in the road for FMG. In the same way, you need to be owning 14 or more stocks in different sectors. We cover this in Building Wealth From Scratch, which I highly recommend for those of you who need to kick-start your portfolio. Check it out!


Conclusion:

"Investing is about consistency, resilience, and strategic choices. I loved talking to seven of Australia’s top fund managers at the start of the year. As Chris Prunty wisely said, the best investment strategy is the one you can stick to. So, let's focus on building wealth through informed and strategic investments. Don't forget to hit that subscribe button for more insights, and I'll catch you in the next 'Beers with Rich.' Cheers to your wealth-building journey!"


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ABOUT THE AUTHOR

Richard Hemming

Richard Hemming

Follow Richard on linkedin

Richard is a leading market commentator and expert on ASX Small Caps

www.undertheradarreport.com.au provides investment opportunities in Small Caps that you won’t get anywhere else.

Under the Radar Report is licensed to give general financial advice only (ASFL: 409518). The author does not own shares in any of the stocks mentioned.

Under the Radar Report is licensed to give general financial advice only (ASFL: 409518). The author does not own shares in any of the stocks mentioned.

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