Motley Fool Australia

Is it time to go all in on ASX shares?

credit corp share price represented by red alarm clock against bright orange background
Image source: Getty Images

Is it time to go all in on ASX shares right now? There are a lot of things that are going right at the moment in Australia.

Australia is in a really good position with regards to COVID-19. NSW is hardly seeing any new cases. Victoria is currently seeing single digit increases in daily cases with an outline of when retail and other sectors can finally start reopening.

This is in stark contrast to other areas around the world like the UK and Europe which are seeing rising numbers and tightening restrictions. The US is also seeing rising numbers again.

Getting in complete control of the virus will hopefully allow the Australian economy to operate much closer to normal than if Australia looked closer to the situation that’s happening in the northern hemisphere.

So where does that leave ASX shares?

Not every business is going to thrive (or even survive) in this environment because of COVID-19 impacts. Just look at what’s happening with businesses like Qantas Airways Limited (ASX: QAN) and Sydney Airport Holdings Pty Ltd (ASX: SYD), they have needed to raise capital to ensure stability.

But remember that ASX shares are among the best businesses in the country. Bapcor Ltd (ASX: BAP) isn’t just any car parts business, it’s the best auto parts company in Australia. JB Hi-Fi Limited (ASX: JBH) isn’t just a computer shop, it’s one of the best retailers in the country.

I think the share price strength of many leading ASX shares has been justified because of their resounding revenue and profit growth.

But there could be more strength to come. It could be worth going ‘all in’ with ASX shares for at least three reasons:

  • Low interest rates Australia’s official rate is now extremely low at just 0.25%. It may be about to go even lower. Lower interest rates are here to stay for a few years. This is one of the key reasons why it’s worth considering going ‘all in’ on ASX shares. There isn’t really another option. 
  • Government support – The Australian government is doing a lot to financially support the economy. Jobkeeper and other measures has kept things ticking over. Jobkeeper is still being paid for businesses that are still struggling and the government recently revealed backdated tax cuts. This could provide another period of good support for the economy.
  • US election – The upcoming US election has caused a lot of uncertainty. If the result is challenged then that could have caused a lot of volatility. If Joe Biden wins, as the polls are suggesting, then the Democrats may win enough power to pass the larger stimulus package which could be a real boost for the US and global economy, which I think would help ASX shares.

Time to go all in?

There’s always something to worry about with the share market. So you shouldn’t let one particular issue stop you from completely investing.

I think the finalisation of the US election will be the moment for me to buy into ASX shares, though I have continued buying throughout the last few months. Aside from COVID-19 impacts, there are a lot of positives for the Australian share market for the next 12 months as I mentioned above.

There are quite a few ASX shares that I’d be happy to buy in the coming weeks (or months) if they stay around this value including: MFF Capital Investments Ltd (ASX: MFF), Australian Ethical Investment Limited (ASX: AEF), City Chic Collective Ltd (ASX:CCX), BWX Ltd (ASX:BWX), EML Payments Ltd (ASX: EML) and Brickworks Limited (ASX: BKW).

There are plenty of other ASX shares that I’ve also got my eyes on. 

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Tristan Harrison owns shares of Magellan Flagship Fund Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Australian Ethical Investment Ltd. The Motley Fool Australia owns shares of and has recommended Bapcor, Brickworks, BWX Limited, and EML Payments. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. 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.

Related Articles…

Latest posts by Tristan Harrison (see all)