Is it time to save more or invest more in ASX shares?

It's a scary time to invest in ASX shares. But here's why I won't be sitting on cash and waiting for the next market crash instead of buying.

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Even for seasoned investors, right now is a tough time to invest more in ASX shares.聽

We saw the market freefall in the March bear market as concerns over the coronavirus pandemic took hold. However, the market has rebounded strongly and some shares like聽Afterpay Ltd聽(ASX: APT) have gone bananas.

It's tempting to sit on the sidelines and accumulate more cash, but is it really a good strategy right now?

Why it's time to invest more in ASX shares

I will preface this by saying that it is assumed that the choice is between saving cash to invest later, or investing more today.

Most investors know that market timing, trying to pick the bottom of the market, is not a good strategy. However, even many of those who know this can't help but sit on cash right now.

It's definitely a scary time to invest, with the economy being propped up by government stimulus and cheap central bank money. There are concerns about recessions and unemployment hampering future growth.

But the thing is, even the world's worst market timer who consistently buys before a crash still generally outperforms those that try to time the market bottom.

I think buying high-quality ASX shares is a long-term game. If you look at a 30-year share price chart, March 2020 will just be a small blip on the radar.

The real question for market timers is when do you jump back in. It's easy to wait, but the reality is that it's even scarier to buy ASX shares in the depths of market declines like we saw in March.

That's why I think buying today is almost always a better strategy provided there is some sense to it. That means staying diversified across a number of companies and maybe even tilting portfolios towards downside protection.

Investments in non-cyclical companies like聽Coles Group Ltd聽(ASX: COL) or defensive shares like聽Newcrest Mining Limited (ASX: NCM) are the sort of things I'm looking for at the moment.

Foolish takeaway

It's easy to sit on the sidelines accumulating cash to "invest when the market corrects". No one knows when the next crash will be, and as the saying goes, "time in the market beats timing the market".

That's why I think a consistent buying strategy across a number of high-quality ASX shares can help build long-term wealth.

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and COLESGROUP DEF SET. 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.

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