The S&P/ASX 200 Index (ASX: XJO) has been volatile again this week, which makes buying ASX 200 shares a difficult choice. But the reality is that in this bear market there are still good ASX 200 shares to buy right now, just as there were at the start of the year.
Sure, valuations have changed. And yes, market conditions have changed. But if you’re in a position to buy, I still think there are Aussie companies with long-term stability that are worth a closer look today.
How to find ASX 200 shares with long-term stability
Not all ASX 200 shares are created equal and the coronavirus pandemic will affect them differently. While ASX travel shares have been hammered by the global shutdowns, other sectors are less directly impacted. Given these restrictions could drag on for months, I think the Aussie supermarkets could be a buy. I like Coles Group Ltd (ASX: COL) shares, given they provide more pure exposure to supermarket retail. While supply chains might be strained, I think Coles could be a good buy for long-term stability.
It’s not just about being defensive right now. If you’re willing to take risks, there is definitely money to be made on the ASX. I like to do a mix of bottom-up and top-down analysis for my own share purchases, which would mean thinking about where markets are headed in the next 10 years. While oil and gas shares could be hit hard by falling oil prices, there could be an opportunity for more renewables investment. I’m a fan of Origin Energy Ltd (ASX: ORG) and think it will have steady revenues in a downturn with significant upside in the long run.
I think recessions, assuming one is on the way, are a bit of a reality check. For me, I’ve been thinking more about what could happen once we emerge from the pandemic. I think NEXTDC Ltd (ASX: NXT) shares could be worth a look, given the data centre operator’s unique place in the market. NEXTDC is one of those ASX 200 shares that could benefit from more remote working and data security infrastructure investment. Given the NEXTDC share price is down just 1.90% in March, I think it offers both short-term and long-term stability.
These are just a few ASX 200 shares that can offer long-term stability. Importantly, I think it’s a good start for a diversified portfolio of high-quality companies. Capital stability is important, but if you’re too defensive you might miss out on potential gains.
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As of 17/3/2020
Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.