Very red days like this rarely coming along. Some people panic and hit the sell button, but is it actually worth buying on days like this?
The ASX 200 (ASX: XJO) is down around 2.5% at the time of writing, which is quite a large drop for one day.
You can look at the ASX’s worst declines and see much heavier falls such as WiseTech Global Ltd (ASX: WTC) which has fallen 8%, the SEEK Limited (ASX: SEK) share price is down 6.7%, the Xero Limited (ASX: XRO) share price is down 6.4% and the Appen Ltd (ASX: APX) share price is down another 4%.
With the way everyone is talking about the market, you would think the market is in a terrible place, but the ASX 200 is still up 16.5% since the start of the year, and many of the popular growth shares are still up significantly since the start of the year.
So it’s not as though everything is suddenly great value.
I think we should always ask ourselves the question of whether it’s a good price to buy shares of the business we’re interested in.
Has the recent sell-down caused your investment targets to reach a good price? If the answer is yes then it might be a good idea to put some money to work because there’s a chance that shares could have recovered by next week. Or maybe not.
The point is that we don’t know what’s going to happen next and you should put in as much money as you’re okay with in regards to the significant volatility that can happen from time to time. It’s days like this that test whether investors have the necessary mindset to stay in shares for the long-term.
I’m going to be putting some money to work very soon, perhaps as early as tomorrow into one or two of my long-term favourites.
Some ideas to consider are these top ASX shares with compelling growth potential.
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of WiseTech Global. The Motley Fool Australia owns shares of Appen Ltd and Xero. The Motley Fool Australia has recommended SEEK Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.