If you’re new to investing, it can be hard to know when it’s the right time to buy ASX shares.
The S&P/ASX 200 Index (ASX: XJO) has fallen 11.2% lower this year to 5,941.60 points. That might be enough to keep some beginners from buying into the market with fears of further declines.
Here are a few reasons why I think right now is a great time to buy more ASX shares.
Not all ASX shares are falling lower
For all of the struggling parts of the economy, some sectors are doing very well. Technology, gold and online retail shares are all booming right now due to various factors.
That means that you can still be tactical about how and where you invest in ASX shares. For instance, the Afterpay Ltd (ASX: APT) share price has rocketed 159.6% higher in 2020 thanks to booming sales and successful international expansion.
Of course, you still want diversification in your portfolio. The key is to be able to ’tilt’ your portfolio in various directions depending on what you think will outperform in the medium-term.
Keep a long-term mindset
I think it pays to have a strategic asset allocation in mind for the long-term with the flexibility to change your investments in the short-term.
It’s easy when you’re starting out to focus on the daily fluctuations. I used to do exactly the same – watch the market each day to see how much my investments had changed.
This isn’t a great habit for most investors. I find that it just made me stress about the losses without adding anything of any benefit.
It’s best to keep in mind why you are investing in ASX shares for the first place. Over a 10+ year timeframe, the movements today or tomorrow shouldn’t worry you.
The best time to start investing in ASX shares was March, the second best time is today. It’s easy to get spooked by online commentators and ‘experts’ who are predicting a doomsday scenario.
However, I think it’s best to trust my own investment strategy and investing for my retirement in the decades ahead.