May could see the start of another crash for ASX shares.
It remains to be seen whether investors can remain confident. There were some pretty dire economic numbers out of the US overnight. The latest week of additional unemployment applications meant the total was now over 30 million people. There was also a big drop in consumer demand in March, which was obviously going to happen.
Who knows what the ASX is going to do next? No-one could have predicted the dramatic ASX share market drop nor the swift recovery. Volatility could see the share market fall back again. 2008 saw a recovery from March to May and then a further decline over the rest of the year, but the GFC doesn't actually have any bearing on what happens this year.
Here are three shares to buy if the ASX crashes again:
Altium Limited (ASX: ALU)
I think Altium is one of the highest-quality shares on the ASX. It's one of the few companies to have a solid cash pile and no debt on the balance sheet. This is one of the key points to ensure businesses easily survive and don't need to do a dilutive capital raising.
There may be a bit of disruption to the electronic PCB software market this year, but it's going to do fairly well compared to most other industries like travel, retail, banks and so on.
The company is aiming for global market leadership in five years and its new cloud Altium 365 product could help it to get there quicker.
If Altium can keep growing its profit margins over the long-term then it will be able to grow its profit at a very nice pace. Which hopefully leads to strong shareholder returns.
Magellan High Conviction Trust (ASX: MHH)
Many of the best shares in the world aren't listed on the ASX, they're listed overseas. We can't directly invest in them, but we can invest in them indirectly through an exchange-traded fund (ETF) or a fund manager.
This is a listed investment trust (LIT) which invests in some of the world's highest-quality businesses like Alibaba, Alphabet, Microsoft, Visa and Facebook. These business models aren't going to be affected that much by the coronavirus and they have strong balance sheets.
I like that sometimes we can buy investment trusts like this at a nice discount to their underlying net asset value (NAV). If another crash happens that discount could go to more than 5%.
Australian Ethical Investment Limited (ASX: AEF)
This fund manager is one of the most promising businesses. Indeed it could be one of the best ASX shares overall. Before the coronavirus hit it was growing its funds under management (FUM) at a fast pace. The concept of ethical investing was attracting a good amount of interest.
The regular contributions from superannuation was helping deliver attractive quarterly growth. The fund manager has no debt with a growing cash balance. And in normal times it has a growing dividend.
It's one of the most volatile shares at the moment, but I think it's worth a long-term hold.
Foolish takeaway
I think these three shares are some of the highest-quality ideas that you can buy on the ASX. I'm very happy and willing to buy quality at cheaper prices if they come, so those are three of the shares I'll have my eyes on if the market drops in May.
