I often ask myself, "how would Warren Buffett invest in ASX 200 shares right now?"
The Oracle of Omaha is arguably the most successful investor ever. He has built his fortune by combining long-term thinking with short-term tactical buying. His investment strategy has clearly paid dividends (even if Berkshire Hathaway doesn't!) and I think the current market is ripe with opportunities for value investing.
Many ASX 200 shares have been smashed in the recent downturn. But a large proportion of these will emerge from the coronavirus pandemic with their businesses intact. They, therefore, could represent super cheap buying right now. Furthermore, with markets remaining volatile amid COVID-19 related updates, large daily swings are offering up plenty of chances to snap up some bargain buys.
So, amongst all the noise, how can you invest $1,000 in ASX shares like Warren Buffett himself?
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How to invest $1,000 in ASX 200 shares like Warren Buffett
The key to value investing is looking for undervalued companies. This means those that have experienced heavy share price falls are prime buying candidates.
However, share prices don't often fall for no reason. Investors are usually pricing in actual or expected decreases in earnings and/or future growth. The trick to investing like Warren Buffett is finding those that have been unfairly oversold.
I've got my eye on a couple of such ASX 200 shares. I think some of the real estate investment trusts (REITs) could be oversold right now. Take, for instance, National Storage REIT (ASX: NSR).
National Storage specialises in self-storage units and its share price has fallen 5.98% lower in 2020. However, if the economy and residential housing market nosedive this year, I think National Storage REIT earnings could benefit. Increasing numbers of people would be looking to store their possessions while they search for housing and/or temporarily downsize to save costs. The ASX 200 REIT was also a potential takeover target amongst several contenders prior to the pandemic. As such, it could be back on the acquisition radar when the market settles.
I also like the look of Macquarie Group Ltd (ASX: MQG). The ASX 200 financial group's shares are down 23.21% in 2020 and could represent a great vehicle for investing $1,000 today. All of the ASX bank shares have been smashed this year, but I think Macquarie's diversified investments and earnings streams could see it pull through the market downturn in good shape.
