You don’t need to be Nostradamus to know that the stock market will crash. When? Who knows. But while history tells us that markets frequently fall more than 20% from recent highs, it also provides plenty of evidence to suggest that they are likely to recover to pre-crash levels.

However, could things be different now with the emergence of artificial intelligence (AI)?

Those of a nervous disposition look away now

Citrini Research recently outlined a scenario (not a prediction) in which more and more jobs are replaced by machines, leading to a fall in wages and a severe recession brought about by a collapse in the mortgage market.

It paints a picture of the S&P 500 falling 57% from its October 2026 peak.

As investors, we still have time to assess how much of our portfolios are built upon assumptions that won’t survive the decade. As a society, we still have time to be proactive.

Citrini Research

Although I’m aware of the risks, I’m not too concerned. Are we going to be stupid enough to let AI ruin our lives in such a way?

However, regardless of whether a crash is going to be caused by AI or not, here’s what I’m doing to try to protect myself should the worst happen.

My strategy centres on a three-pronged approach:

• Holding more cash than normal.
• Maintaining a diversified portfolio.
• Taking a long-term view.

Get ready…

Having some uninvested cash means I can react quickly should any opportunities arise to bag myself a few bargains. And being diversified is important because defensive stocks tend to be less affected by the business cycle.

It’s also important to try and ignore any short-term disruption. During Warren Buffett’s six decades at Berkshire Hathaway there were plenty of slumps, crashes, and corrections. Yet astonishingly, $1 invested in the company in 1964, would have been worth $60,993 at the end of 2025.

The biggest and best?

One stock that I think could be a long-term winner is Nvidia (NASDAQ:NVDA).

Remarkably, of 70 Wall Street analysts covering the stock, 64 give it a Buy rating. Only one is advising its clients to Sell.

Of course, these 64 could be wrong.

It’s likely that a rival chip will emerge. Many well-funded companies, including some household names, are working on their own versions.

And Bloomberg reported in April that up to half of all US data centres planned for 2026 are likely to be delayed. A lack of access to suitable energy infrastructure and equipment shortages are the biggest problems.

However, it’s always worth sitting up and taking notice when there’s near-unanimity of opinion among brokers.

Personally, I think the potential for Nvidia is huge. If the company can achieve (or even get close to) some of the earnings forecasts that I’ve seen, its stock looks remarkably cheap to me. Its new Vera Rubin chip is massively more powerful than its current Blackwell version. And the group’s venture capital arm is investing heavily in “technology visionaries solving complex problems”.

Inevitably, Nvidia would be caught in the fallout from a stock market crash. But over the long term, I’m sure the demand for semi-conductors will rise massively. The company’s been described as the least replaceable in the industry. I agree. That’s why I think it’s a stock to consider.

The post Could the stock market really crash by 57%? appeared first on The Twelfth Magpie.

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James Beard has no position in any of the shares mentioned. The Motley Fool UK has recommended Nvidia. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

With the war in Iran causing huge problems for the global aviation industry, it’s not surprising that the Rolls-Royce Holdings (LSE:RR.) share price has been falling. As recently as March, the group’s shares were changing hands for over £14. Now (5 May), one could be bought for around a fifth less.

Clearly, the rising cost of jet fuel resulting from a lack of supply is taking its toll on airlines. Lufthansa has announced that it will cut 20,000 European short-haul flights over the summer. Others have made similar decisions. Rolls-Royce generates revenue every time one of its engines is used. Fewer flights will likely reduce earnings. But are investors being overly cautious?

Nothing to see here

Based on the group’s 30 April trading update, it appears they may be.

Ahead of its annual general meeting, the group said it expected to “fully mitigate” the current financial impact of the disruption. Perhaps surprisingly, there was no mention of what might happen if the conflict continued. The update was very bullish.

Indeed, large engine flying hours increased by 5% during the first quarter of 2026. And while Lufthansa’s decision to cancel flights sounds dramatic, it has to be remembered that the German airline currently operates around 3,000 a day.

Some of Rolls-Royce’s ability to cope with the fallout from the war can be attributed to the fact that it’s not a one-trick pony.

As well as its aerospace division, it has significant exposure to the defence and power systems sectors. Both of these had a “strong start to the year”. The latter reported a record month for orders in March. Data centres and government were the biggest contributors.

Business as usual

Looking further ahead, its small modular reactor (SMR) programme remains on schedule. Rolls-Royce boasts that it’s “the only company with multiple contractual commitments to deliver SMR units in Europe and is well placed to become a market leader globally.”

Overall, the group reiterated its 2026 guidance of £4bn–£4.2bn of underlying operating profit and £3.6bn–£3.8bn of free cash flow. For comparison, in 2025, these were £3.5bn and £3.3bn, respectively.

We have had a strong start to the year driven by our transformation and self-help, as we continue to further expand the earnings, cash, and growth potential of the business. Operational performance has also been strong across the Group, benefiting our customers.

Tufan Erginbilgic, Chief Executive, Rolls-Royce Holdings

My view

In my opinion, the group’s shares are well worth considering by those investors with a long-term outlook.

Of course, there could be some bumps along the way. Despite the group’s optimism, there’s bound to be some impact on its civil aerospace business if the blockade of the Strait of Hormuz continues. And even after the recent pullback, I don’t think the group’s shares can be described as cheap.

However, it has exposure to markets that are all performing strongly for different reasons. This helps spread operational risk. But if all three grow at the same time — as they are at the moment – there’s a good chance that Rolls-Royce will be in a position to upgrade its earnings and cash flow forecasts yet again.

I think last week’s trading update demonstrates the resilience of the business and should reassure investors that it’s well positioned to cope with any short-term disruption that comes its way.

The post Could the Rolls-Royce share price be on the turn? appeared first on The Twelfth Magpie.

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James Beard has positions in Rolls-Royce Plc. The Motley Fool UK has recommended Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Given the hugely impressive post-pandemic rally of Rolls-Royce Holdings (LSE:RR.) shares, it’s easy for someone to think they’ve missed out.

But as a reminder that you don’t have to be an early-stage investor to be a winner, Warren Buffett’s Berkshire Hathaway didn’t invest in Apple until after iPhone 6 was launched. Since then, it’s estimated that the investment vehicle has realised gains of over $160bn from the stock.

With this in mind, could recent wobbles in the Rolls-Royce share price be an ideal opportunity for those who’ve missed out previously (and others) to consider the stock?

What’s going on?

Understandably, investors have concerns that Rolls-Royce could be affected by events in the Middle East, particularly if the current stand-off continues.

With soaring jet fuel prices and flight cancellations, the group’s civil aerospace division could see a material drop in the number of hours that its engines are flown, which is the basis on which it generates the majority of its revenue.

Positively, a trading update on Thursday (30 April) reported: “We expect to fully mitigate the current financial impact of the disruption to our business.”

Personally, I’m not too concerned at this stage. I’m sure the war will end soon (something we all hope for). And the group’s post-pandemic recovery is a reminder of how resilient the aviation industry can be.

Indeed, it’s the long term that really counts when it comes to investing. That’s why the recent fall in the group’s share price could be an opportunity. Remember, not so long ago — March, in fact — its shares were changing hands for 17% more than they are today (4 May).

Why?

Personally, I think there’s huge potential for the group from its small modular reactor (SMR) programme. These factory-built mini nuclear power stations have a number of competitive advantages:

• Low cost – many large-scale plants run hugely over-budget.
• Deliverable – built using proven and commercially available technology.
• Global – the technology can be deployed anywhere in the world.
• Scalable – standardised off-the-shelf components.

The key is modularisation, which involves doing as much as possible inside a factory. Not only does this help maintain quality but it also reduces the opportunity for on-site disruption.

And with the growth in data centres putting a strain on existing energy infrastructure, SMRs could prove to be highly lucrative. Indeed, the group’s boss thinks it could help make Rolls-Royce the UK’s most valuable company.

Rolls-Royce SMR is the only company with multiple contractual commitments to deliver SMR units in Europe and is well placed to become a market leader globally

Tufan Erginbilgic

Of course, there are no guarantees that the technology will work. And its commercial viability is unproven. There’s also a risk that investors have already priced in some of the potential gains. And even if everything goes to plan, it’s unlikely that any significant revenue will be generated from SMRs until 2030 at the earliest. That’s why I believe it’s important to take a long-term view.

Personally, I think the SMR programme adds another string to the group’s bow. Importantly, it reduces its reliance on the aviation and defence sectors, which helps spread risk.

The group’s already signed agreements in Estonia, Türkiye, and the Czech Republic. And it’s working with Great British Energy to design and deliver the UK’s first reactors.

The post 17% below their 52-week high, is now an opportunity to consider Rolls-Royce shares? appeared first on The Twelfth Magpie.

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• How much passive income could 333 Rolls-Royce shares pay out in 3 years?
• Investors need to face the truth about booming Rolls-Royce shares 
• Is £15 the next stop for the Rolls-Royce share price?

James Beard has positions in Rolls-Royce Plc. The Motley Fool UK has recommended Apple and Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

J Sainsbury (LSE:SBRY) was one of the original members of the FTSE 100 when it was launched in January 1984. And while the retailer may no longer be the UK’s largest grocer – it lost its crown to Tesco in 1995 – it comfortably remains in second place. 

However, after the group announced (23 April) its results for the 52 weeks ended 28 February (FY26), investors appeared disappointed and sent its share price 3.7% lower. It also led to a number of City brokers reassessing their price targets and revisiting their ratings for the stock.

As is often the case, opinion’s divided but, generally speaking, the brokers were less favourable to the stock after crunching their way through the numbers.

For shareholders like me, this is obviously disappointing. However, I’m not selling. Here’s why.

What’s going on?

At first glance, the reaction of investors and brokers is a little puzzling. After all, the headlines from the results were as follows:

• Retail revenue increased 4.3% year-on-year to £30bn.
• Grocery sales rose 5.2%.
• Retail underlying operating profit fell 1.1% to £1bn (a deliberate decision was made not to pass on cost increases to customers).
• Retail free cash flow improved by 8.1% to £600m.
• Net debt fell £100m to £5.8bn.
• Annual dividend hiked by 0.7% to 13.7p.
• £300m share buyback programme announced.

But what appeared to spook the City was the grocer’s outlook. Why?

Increased uncertainty

Although the group reported a “positive” start to the new financial year with grocery volume growth ahead of the market, it said the “conflict in the Middle East will impact both our customers and our business”.

Describing the consequences as “very uncertain”, it’s expecting to deliver underlying operating profit of £975m-£1.075bn in FY27. It’s a wide range so it’s hard to know what to make of the numbers.

The group’s expecting retail free cash flow of “more than” £500m. Given what’s going on in the world at the moment, this doesn’t seem too bad to me. But I’m aware of the challenges facing the group.

As well as events in the Gulf, the performance of its Argos arm remains a concern. It continues to under-perform the wider group and could be something of a distraction for management.

Also, the UK grocery market remains one of the most competitive around with tight margins and heavy discounting.

But the recent pull back in the retailer’s share price and the modest increase in its dividend has pushed its yield higher. New investors could avail of a 4.2% return (no guarantees, of course).

What am I doing?

The publication of results is often a time when shareholders reflect. I’m no different. And after doing this, I’ve decided to keep hold of my shares. Why?

Importantly, the group’s shown that it’s able to cope with the threat of the German discounters Aldi and Lidl, better than some of its rivals. And then there’s its impressive dividend.

Admittedly, its share price is unlikely to go gangbusters but the stock’s defensive properties could be ideal for the uncertain times in which we live.

Personally, I’m going to keep Sainsbury’s in my Stocks and Shares ISA and I believe investors could consider adding it to their own portfolios.

The post 2 analysts have changed their minds about this FTSE 100 founding member. But I don’t care! appeared first on The Twelfth Magpie.

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Citigroup is an advertising partner of Motley Fool Money. James Beard has positions in J Sainsbury Plc. The Motley Fool UK has recommended J Sainsbury Plc and Tesco Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Like so many, the Lloyds Banking Group (LSE:LLOY) share price has suffered as a result of the war in the Middle East. But the truth of the matter is that it was drifting lower before the first missiles were launched.

The bank’s shares are now (2 May) changing hands for 15% less than they were at the start of the February. And analysts have a 12-month price target that’s over 20% higher. Could this be a buying opportunity to consider? Let’s see if the bank’s latest results provide any clues.

What’s the bottom line?

On Wednesday (29 April), Lloyds published its results for the first quarter of 2026. And what stood out to me was its earnings per share (EPS) of 2.4p. This was 0.2p better than for the previous quarter and a 0.7p improvement on a year earlier.

Importantly, it was 0.3p above analysts’ expectations. Before the results were released, they were anticipating EPS for the full year of 9.9p. I wonder if their forecasts will now be upgraded?

Some of the earnings improvement can be explained by a reduction in the number of shares in issue, brought about by the bank’s huge share repurchase programme. But the bank’s also been working hard to reduce its overheads. During the quarter, its cost/income ratio was 52.7%. For 2025, it was 58.6%.

In the first quarter of 2026, the Group delivered sustained strength in financial performance, growing our income, maintaining our cost discipline and delivering strong profitability. Our differentiated business model remains resilient in the context of the current economic uncertainties.

Charlie Nunn, Group Chief Executive, Lloyds Banking Group

Undervalued?

When it comes to assessing valuations, EPS is a key metric. At the moment, Lloyds’ shares are changing hands for around 10 times forecast 2026 earnings. Generally speaking, retail banks trade on a multiple of nine, so this isn’t too far out of kilter.

Looking ahead to 2028, analysts are predicting EPS of 13.7p. With a forward price-to-earnings (P/E) ratio of just over 7, the bank’s shares appear cheap. On this basis, I can see why analysts’ consensus is that they’re worth 120p. At this level, the bank has a forward (2028) P/E ratio of 8.8. This seems very reasonable to me.

But…

However, despite this week’s impressive results, these forecasts seem like a bit of a stretch. Although there’s much to admire about the bank — including its brand and its management team — virtually all of its income is earned in the UK.

Here, growth forecasts have recently been downgraded by both the OECD and International Monetary Fund. Unemployment’s rising and inflation’s starting to pick up again. Also, business confidence is low, which is holding back investment.

I don’t wish to sound negative but I think this is a fair assessment of the state of the domestic economy. Against this backdrop, surely Lloyds can’t double its EPS over the next three years, as analysts are predicting?

That’s why, in my opinion, there are more exciting opportunities to consider elsewhere. Indeed, there are loads of high-quality, rapidly-growing UK companies that generate the majority of their earnings overseas. I believe these are worthy of further investigation.

The post Analysts reckon the Lloyds share price should be 21% higher! appeared first on The Twelfth Magpie.

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James Beard has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

According to experts, those wanting a have a basic retirement need £852 more than the current (2026-2027 tax year) State Pension pays. For a moderate lifestyle, an extra £19,252 is required. And those seeking more financial freedom with a few added luxuries will require a total annual income of £43,900. That’s £31,352 more than the UK government pays to pensioners.

To help try and cover this shortfall, I think it’s worth considering investing in the stock market via a Stocks and Shares ISA. And with a successful stock-picking strategy, I reckon it’s possible to produce a healthy income stream for later in life. Let me explain.

How could an ISA grow?

If someone built an ISA worth £627,040 and then used it to buy a collection of dividend shares paying 5%, it would be sufficient to produce the £31,352 needed every year which, when combined with the State Pension, would help provide a financially comfortable old age.

Admittedly, this is a sizeable investment pot.But someone investing £266.20 a month for 25 years, achieving an annual return of 13.2%, could get very close (£627,032). However, is a return of 13.2% realistic?

Biggest and best?

As the table below shows, the average annual increase in the share prices of the FTSE 100’s five largest companies since May 2021 is 13.2%. I’ve deliberately excluded Rolls-Royce Holdings as its post-pandemic recovery has been nothing short of remarkable and heavily distorts the average.

Had the dividends received been reinvested, the return would have been even higher.

Of course, history might not be repeated but for those who are prepared to take a long-term view, I think the stock market is the best way to try and accumulate significant wealth.

Going up in smoke?

One of the stocks in the table is of particularly interest because, over the past five years, not only has it delivered over 9% annual share price growth but it’s also paid a healthy dividend.

Thanks to its huge margin and strong cash flows, British American Tobacco (LSE:BATS) is presently (3 May) yielding an impressive 5.7%.

This would produce an annual income of £35,741 on an ISA worth £627,032. Of course, it wouldn’t be sensible to own just one stock, especially given that dividends are never guaranteed, but this example highlights the potential returns available from high-yielding UK shares.

Although I’m impressed by British American Tobacco’s dividend history – it’s raised its payout every year for over a quarter of a century – I’m not convinced it will be able to continue doing this.

Traditional cigarettes are slowly on their way out and I doubt whether the new generation of alternatives will be as profitable as their predecessors. The group’s also borrowed heavily to help fund its move away from conventional tobacco products.

I should explain that I’m looking several years ahead here. In 2025, the group reported year-on-year revenue growth of 2.1% (excluding currency movements) and a 0.7% increase in adjusted earnings per share. On this basis, I don’t see any immediate threat to its payout.

But I’m a long-term investor, which is why I believe there are plenty of better income opportunities to consider elsewhere. Indeed, seven of the FTSE 100 members are currently yielding 6% or more. This could be a good starting point for further research.

The post State Pension of £12,548 not enough? Here’s how to aim to add another £31,352 to your retirement income appeared first on The Twelfth Magpie.

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HSBC Holdings is an advertising partner of Motley Fool Money. James Beard has positions in Rolls-Royce Plc. The Motley Fool UK has recommended AstraZeneca Plc, British American Tobacco P.l.c., HSBC Holdings, London Stock Exchange Group Plc, Rolls-Royce Plc, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

A Self-Invested Personal Pension (SIPP) is a flexible investment vehicle for those wanting to boost their retirement income. And with many experts suggesting that the State Pension isn’t sufficient to provide for a comfortable old age, it’s probably a good idea for most of us to start investing more.

Indeed, those currently (3 May) receiving the full UK State Pension of £12,548 might look abroad with envy. Many European countries pay more. The most generous is Iceland where pensioners can receive up to £30,251 per annum!  

However, with its attractive tax advantages I think a SIPP could help those who don’t want to move overseas. Let me explain.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

How do the numbers stack up?

One popular retirement strategy is to invest regularly in a SIPP and buy some growth shares. In theory, these are more likely to beat the returns of the wider market.

The average annual return of the FTSE 100 from 2006-2026 was 6.4%. This assumes all dividends were reinvested buying more shares.

However, by adopting a successful stock-picking strategy, I believe it’s possible to do better. Of course, with the benefit of hindsight it’s easy to find stocks that have out-performed the Footsie over various periods. But I don’t know anyone clever enough to always pick the best.

Instead, to be more realistic, let’s look at the stock ranked 50th in the league table of FTSE 100 performers over the past five years. How did it do?

Who?

Well, RELX (LSE:REL), the global provider of information-based analytics and decision tools, has delivered an average annual return of 8.9%. Again, this assumes all payouts were used to buy more shares.

Someone investing £425 a month in a SIPP returning 8.9% will see it grow to £468,617 after 25 years. If this is then used to buy a portfolio of dividend shares paying 6.6%, the average of the top 10 FTSE 100 yielders at the moment, it would produce an annual income of £30,928, a little more than Iceland’s full State Pension.

I think it’s fair to say that RELX isn’t a household name. But it’s delivered impressive earnings per share (EPS) growth in recent years.

Looking back over its 2021-2025 financial performance:

• Revenue’s increased 32%.
• EPS’s now 47% higher.
• Adjusted operating margin’s improved 4.3 percentage points.

However, its share price has taken a bit of a knock lately. There are fears that artificial intelligence (AI) could disrupt its business model, making it easier for cheaper alternatives to gain market share.

It also remains vulnerable to a cyber attack.

My view

But the group sees AI as an opportunity rather than a threat. The continued evolution of artificial intelligence is enabling us to add more value to our customers, as we embed additional functionality in our products, and to develop and launch products at a faster pace, while continuing to manage cost growth below revenue growth

And with its blue-chip customer base and huge global presence, it has enormous pricing power. Also, its shares are trading well below their five-year earnings multiple.

That’s why I reckon investors looking for a reliable performer to tuck away in a SIPP (and those not wanting to move to Iceland) could consider RELX as part of a diversified portfolio.

The post How much would be needed in a SIPP to target the £30,251 State Pension paid in Iceland? appeared first on The Twelfth Magpie.

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James Beard has positions in RELX. The Motley Fool UK has recommended RELX. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Investing a regular amount in a Stocks and Shares ISA is one way of aiming to boost an individual’s income in retirement. According to government figures, the average pension for a single person is £14,664 a year. This includes pensions paid by both the state and privately. Unfortunately, this will only provide for a basic standard of living.

For added financial security, more is needed. With this in mind, let’s see how someone could aim to earn an identical sum from an ISA.

How do the numbers look?

Investing £257 a month at 8% would grow to £244,400 after 25 years.

Historical returns from the UK stock market suggest that 8% is achievable. But by picking some high-performing growth shares, I believe it’s possible to do better.

A 10% return would reduce the required monthly investment to £194. At 12%, it falls to £142.

Once an ISA has reached target, a portfolio of dividend shares could be bought. With a yield of 6%, this would be sufficient to provide an annual passive income of £14,664, or £1,222 a month.

Is this realistic? Well, the average yield of the top 10 on the FTSE 100 is currently 6.6%.

Something to consider

One company that helps people save for retirement is Legal & General (LSE:LGEN). But with its generous dividend – the stock’s currently (2 May) yielding 8.6% — it could also help boost someone’s income in a different way.

For example, to earn £14,664 in dividends, £170,512 of the group’s shares would be needed.

Given that dividends can be erratic, it pays to be wary of high-yielding shares. Indeed, Legal & General’s is the highest on the FTSE 100 at the moment.

But in this case, I think the payout looks secure for now. My opinion is partly based on the stock’s history – it last cut its dividend during the global financial crisis in 2009 – but also its future prospects.

The UK retirement and savings market is expected to double in size over the next 10 years. Of course, this could also pose a threat leading to increased competition for some of the more established players like Legal & General.

One area to keep an eye on is the group’s Solvency II ratio. It fell sharply during the course of 2025. However, given that it remains over twice the regulatory minimum and higher than many of its rivals, I don’t think it’s much of a red flag at this stage.

Indeed, the company’s growing strongly at the moment. Highlights from its 2025 results include:

• A core operating profit of £1.62bn, 6% higher than in 2024.
• A 9% year-on-year increase in core operating earnings per share.
• An estimated store of future profit of £13.3bn.

Much of this was driven by successfully converting many high-value opportunities from its pipeline of new pension schemes that it’s looking to take over and manage. The higher interest rate environment is also helping its annuities business.

What does this tell us?

In my view, Legal & General is one of many excellent high-yielding income stocks. On this basis, I think it’s one that could be considered by those looking to open up another revenue stream or supplement their pension. But only as part of a diversified portfolio.

Also, growth investors are likely to find other opportunities more attractive.

The post How much is needed in an ISA to target a £1,222 monthly passive income in retirement? appeared first on The Twelfth Magpie.

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James Beard has positions in Legal & General Group Plc. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Helium One Global‘s (LSE:HE1) a penny stock that’s attracted a lot of attention lately. Earlier this year, a steady stream of announcements about positive developments at the Galactica-Pegasus project in Colorado, in which it has a 50% interest, helped drive the helium group’s share price higher.

Its most recent press release confirmed that the facility was “transitioning to continuous 24/7 operations following completion of automation and system upgrades”. It also revealed that the group’s first helium sales had been agreed.

This is an important milestone. The group’s now moved from being an explorer to a producer. And with helium prices high at the moment, its timing has been impeccable. Demand continues to rise due to the unique cooling properties of the gas.

Bigger and better?

However, its US operation is relatively small. Helium One’s joint venture partner, Blue Star Helium, which is listed on the Australian stock market, is valued at £23m.

However, the British company’s market-cap is £62m. This means investors are currently (2 May) placing a value of £39m on its other project, the Southern Rukwa mine in Tanzania.

Here, in February, it was confirmed that electrical submersible pump testing had been successfully completed. Flow rates exceeded expectations and helium concentrations were in line with previous estimates. The next stage in the development process is “to progress discussions with potential industry partners and seek external investment to advance the project towards development”.

Off the back of this good news, the company raised more money from both institutional and private investors in March. Since then, things have gone quiet. It’s sometimes said that no news is good news, but in the world of investing a void’s often filled with speculation.

Indeed, I’ve seen some online comments suggesting that the group’s licences could be terminated. This gloomy prediction is based on reports that the Tanzanian government has revoked 40 in the country principally due to a lack of development. Other reasons for the cancellations include a failure to pay the required fees. Non-compliance with corporate and social responsibility obligations has also been mentioned.

This seems very wide of the mark to me. The testing phase continues at pace and with a 17% stake in the Southern Rukwa project, the government has a vested interest in the mine’s full potential being realised.

What next?

I suspect shareholders will be hoping that the next announcement will be that the group’s found a suitable partner to help commercialise its project in Africa. To me, this is pivotal to the investment case. At this point, everything should become clearer.

Investors will know the terms of any partnership including the amount of equity required. And given that any funding arrangement is probably going to include some debt, shareholders will be able to judge how much of a burden this will be. Finally, a likely timescale for bringing the first helium to the surface in Tanzania is likely to be made clearer.

Because I have no clarity on these issues, I don’t want to invest. It would be too speculative for me at this stage. However, when a partner’s found, I’ll come back and revisit the position. Until then, I’ll be watching with interest.

The post Everything’s gone quiet at Helium One. What’s next for the penny stock? appeared first on The Twelfth Magpie.

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James Beard has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Earning a lifelong passive income is the key to financial freedom. As American billionaire investor Warren Buffett once said: “If you don’t find a way to make money while you sleep, you will work until you die.”

So how might someone go about doing this, even with a relatively modest level of savings?

Some numbers

According to a survey by Finder, the average person has £19,214 saved. But this hides a wide disparity in figures. The research found that 16% of all UK adults have no savings at all and 39% have less than £1,000 tucked away.

Historically, many people have invested in bricks and mortar as a means of generating a passive income. However, rising borrowing costs and the need for a large deposit means £19,214 is unlikely to go very far in today’s market.

Another approach is to buy dividend shares. For example, the top 10 yielders on the FTSE 100 are currently offering a return of 6.6%.

And savvy investors know that bigger gains can be made by reinvesting these payouts. Doing this could increase the yield on the initial lump sum to 6.5% in year two and 7% in year three, and so on, all other things being equal.

Based on a return of 6.6%, a portfolio of £19,214 would – if all goes to plan — earn £1,268 in dividends over the next 12 months. Some companies pay quarterly dividends whereas others make interim and final payments each year. Either way, there’s likely to be a steady flow of cash.

Can this be true?

Earning money from doing nothing is what income investing is all about. However, there are risks.

Dividends are never guaranteed. They are a distribution of profit and can therefore fluctuate in line with earnings, which are heavily dependent on the business cycle and macroeconomic conditions. Also, there’s little point earning a healthy income stream if your capital’s being eroded due to a falling share price.

Despite these challenges, there are plenty of people that have made good money from investing in UK dividend shares.

Any examples?

One of the highest-yielding FTSE 100 stocks is Land Securities Group (LSE:LAND). It owns a £9.8bn portfolio of offices, shopping centres, and retail parks, which could appeal to those that like the idea of investing in commercial property without wanting to get into debt or deal with tenants.

Based on amounts paid over the past 12 months, it’s presently returning 6.9%. This means a £19,214 investment could yield £1,326 in dividends.

Importantly, the stock has a good track record of raising its dividend – it was last cut during the pandemic – and it’s looking to boost it further by moving into residential property.

Despite this, it’s not immune from the cyclical nature of the UK property market. And its relatively high level of borrowings makes it vulnerable to interest rates staying higher for longer.

But as a real estate investment trust, tax rules require the group to return at least 90% of its rental profit to shareholders via dividends each year.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Also, the quality of its portfolio means it has an occupancy rate of around 95%. At its retail parks, it’s 99%.

Personally, I believe Land Securities Group is one of many UK shares that could be considered by those attracted to the idea of earning passive income.

The post £19,214 in savings? Here’s how to aim to unlock £1,268 in passive income straight away appeared first on The Twelfth Magpie.

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James Beard has no position in any of the shares mentioned. The Motley Fool UK has recommended Land Securities Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.