One thing that all ASX investors should know is that market crashes are inevitable. The very nature of capital markets encourages fear and greed at every turn. These duelling emotions cause market volatility, corrections and sometimes crashes.
We’ve recently had one of the most severe and simultaneously short market crashes in history back in March, so many investors will be hoping that we won’t see another crash for a while. But the next crash, whether it’s 1 month or 10 years’ away – is still inevitable. So with this sobering reality in mind, here are the 3 ASX shares that I won’t be hesitating to buy if and when the next crash comes around.
Washington H. Soul Pattinson & Co Ltd (ASX: SOL)
‘Soul Patts’ as its easily known, is one of the best dividend-paying shares on the ASX, in my opinion. It has increased its dividend every year since the year 2000 and paid a dividend every year going back to 1903. That’s a record that cannot be rivalled by any other ASX company.
Today, Soul Patts is more of a conglomerate than a real company. It owns massive stakes in several quality ASX companies, including Brickworks Ltd (ASX: BKW) and TPG Telecom Ltd (ASX: TPG). I already own shares in Soul Patts, but I would love to load the boat when the next market crash does come around.
VanEck Vectors Wide Moat ETF (ASX: MOAT)
This exchange-traded fund (ETF) is one of my favourite passive ASX investments. It aims to hold a mid-sized portfolio of US shares that display characteristics of possessing a wide economic moat. A ‘moat’ is a Warren Buffett term that refers to a company’s intrinsic competitive advantage. This might be a strong brand, intellectual property assets, or stickiness of a product. Some of MOAT’s holdings include credit card company American Express, cereal maker Kellogg and Buffett’s own Berkshire Hathaway. MOAT will be in my sights if there’s a good pricing opportunity down the road, to be sure.
Macquarie Group Ltd (ASX: MQG)
Macquarie is sometimes called the ASX’s ‘fifth bank’, but this characterisation is slightly misleading. This financial company does offer banking services much like the big four banks like Commonwealth Bank of Australia (ASX: CBA). But most of Macquarie’s operations are in the asset management and investment banking arenas, which I think are far better placed for shareholder wealth creation than the traditional banking services these days.
Macquarie is a rather cyclical share that tends to drop heavily in market crashes and enthusiastically recover afterwards. As such, I’m looking forward to starting a position in this company when the next buying opportunity exposes itself.
Market crashes are a scary time to have money in shares. But they are also usually the best time to be buying shares for your portfolio. I’m not hoping for another crash, but I sure will be ready to buy these ASX shares when it does come around.
These 3 stocks could be the next big movers in 2020
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Motley Fool contributor Sebastian Bowen owns shares of VanEck Vectors Morningstar Wide Moat ETF and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, Macquarie Group Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF. 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.