Markets have been in turmoil this year, as central banks take decisive action in an attempt to stomp out inflation. Yet, some are still concerned it could get worse for ASX shares amid calls for further rate hikes.
I don't think it is wise to try and predict where the share market will go from here in the short term. Although, if a bear market is a concern, it can be worthwhile positioning a portfolio in a way that gives you confidence in your investments through a challenging time.
If the goal is to invest in companies that are well-positioned for economic uncertainty, this is worth a read.
Here are five ASX shares I believe are worth holding through a rocky market.
Healthy foundations
Exposure to quality healthcare shares can be worthwhile during a stagnant or declining economy. Unlike other areas of the market, the healthcare industry is considered to be non-discretionary. People generally prioritise health and regard it as essential.
In this category, Pro Medicus Limited (ASX: PME) and Cochlear Limited (ASX: COH) stand out as rock-solid opportunities.
Both of these companies operate in industries — medical imaging and hearing devices — that will likely continue to see demand irrespective of prevailing conditions.
In addition, Pro Medicus and Cochlear are well capitalised with $90.6 million and $586.7 million in net cash as of 30 June 2022.
One ASX share keeping you covered
Another relatively defensive industry to invest in during turbulent times is insurance. Although, ASX-listed companies providing the insurance policies usually run on thin margins — around 5% or less. In contrast, insurance brokering and underwriting tend to print profits at a thicker margin.
I would consider AUB Group Ltd (ASX: AUB) an attractive way of investing in this relatively inelastic industry. Since its founding in 1985, AUB has demonstrated its ability to consistently compound revenue and earnings over long periods of time.
Furthermore, as a broker, AUB stands to benefit from a more price-conscious consumer. The team at Ophir Asset Management recently named this ASX share as one with potential upside.
A dash of defensive innovation
Some might ditch exposure to innovation to protect the portfolio against a stock market crash. However, I believe there are some highly-innovative, fast-growing ASX shares that are also extremely robust.
Taking out the final two spots of my five rock-solid buys are PWR Holdings Ltd (ASX: PWH) and Altium Limited (ASX: ALU). A cooling solutions company and a PCB design software provider may not appear to be rock-solid, but here's my take.
These companies are operating within industries boasted by strong tailwinds. Demand for advanced cooling solutions is growing with the adoption of electric vehicles. Likewise, circuit boards are finding their way into everything as digital devices consume analog hardware.
Importantly, PWR and Altium are both exceptionally well-run businesses. Zero debt, above 20% earnings margin, and high returns on capital. I struggle to envisage a future where these ASX shares provide below-market returns over the long term.
