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How investors should think about the ASX 200 crash over the weekend

The share market is being pummelled week after week by the ongoing outbreak of the coronavirus. The S&P/ASX 200 Index (ASX: XJO) is down another 8% today.

These are interesting times. Extraordinary times.

We haven’t seen such a loss of confidence in over a decade. Share prices across the board are getting smashed. Where are we going to next? No-one can say because of how rapidly the coronavirus is changing the situation.

Things to think about this weekend

No matter what happens, most ASX businesses will get through this comfortably, a few may need to do a capital raising. It’s only the ones with dangerously high debt levels that could be in trouble in the next few months.

There are plenty of shares that have good levels of cash on their balance sheet, so shares like A2 Milk Company Ltd (ASX: A2M) and Altium Limited (ASX: ALU) have the financial strength to get through.

This week has seen painful falls for the ASX and globally. It could take a month or even up to a year for share prices to start a strong recovery. But at some point they will recover, just like they do after every global event like the Spanish Flu, the world wars and the GFC.

The ASX fell for around 15 months during the GFC, then it started going upwards again as investors realised the worst was over.

Share prices could keep falling next week or even next month. But don’t forget that interest rates are now incredibly low. Property and bond prices are still very high. Gold prices are high. When the falls stop I think there’s only one asset that makes sense: shares.

For a long-term investment I think shares look too good to not do some investing at today’s prices. It may be wise idea to go diversified investments at this stage, it’s hard to tell what the economic fallout will be at this point.

I think shares like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and Magellan High Conviction Trust (ASX: MHH) could be great options for investors to consider as they are trading at discounts to their underlying asset value, yet have great management and strong portfolios.

What I’m doing

I am investing through this. I haven’t been able to buy anything yet today because my broker is having problems because of all the trading volumes! I’ll buy something today when I can.

I haven’t invested all the possible cash I could yet, but I’m tapping into it because I think 2020 may be a once-in-a-generation opportunity, particularly compared to other asset classes.

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Motley Fool contributor Tristan Harrison owns shares of Altium and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of A2 Milk and Altium. 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.