The S&P/ASX 200 Index (ASX: XJO) has had a productive start to 2023, despite a notable slump amid turmoil in the banking space last month.
The index is up 5.8% year to date, trading at 7,346.4 points at the time of writing – less than 300 points off its all-time highest close of 7,628.9 points.
If history is anything to go by (and I think it is) the index will likely hit fresh heights when the next bull market occurs.
That's why I'm keen to snap up cheap ASX 200 shares now and profit when the market next takes off.
I'm long-term bullish on the ASX
Economist Benjamin Graham is widely quoted as having said:
In the short run, the market is a voting machine but in the long run it is a weighing machine.
In other words, day-to-day, the market runs on popular sentiment. But in the long run, it will weigh a company largely on its earnings.
Right now, sentiment and (commonly) earnings are lower than they've been in recent memory amid high inflation and the resulting 10 consecutive rate hikes handed down by the Reserve Bank of Australia (RBA) in the lead-up to April.
And Australia is far from unique. Indeed, many experts are tipping us to dodge a recession likely to be felt by other economies around the globe.
Still, one common assumption is when the dust settles, inflation is tamed, and rates begin to fall, markets – including the ASX – will bounce back with newfound strength.
I don't know if that's what will happen, or when the next bull market might occur. However, I'm sure history will repeat itself and the ASX will soar into bull territory in the future.
Until then, I plan to snap up cheap ASX 200 shares now to cash in on the ASX's eventual surge. Thankfully, there are heaps to choose from.
3 ASX 200 stocks that could be trading cheap right now
ASX 200 electronics retailer JB Hi-Fi Ltd (ASX: JBH) is on my radar at the moment. The stock has tumbled 11% over the last 12 months, potentially due to cost-of-living concerns. Broker Citi is among its proponents – tipping the JB Hi-Fi share price to lift around 22% to $55. I personally like the look of the retailer's 10.5 price-to-earnings (P/E) ratio, courtesy of CommSec, and 7.7% dividend yield.
Also offering an attractive P/E ratio of around 9.6 and a dividend yield of approximately 6.3% are Stockland Corporation Ltd (ASX: SGP) shares. The company deals in real estate development and commercial property. I agree with Citi analysts, again. I think the market has likely been too tough on the stock amid rising rates. The broker forecasts the stock to rise 9.1% to $4.60.
Finally, I've got my eye on ASX 200 travel share Corporate Travel Management Ltd (ASX: CTD). The company understandably suffered through the COVID-19 pandemic. However, I think it used its time well, acquiring Travel & Transport and Helloworld Travel Ltd (ASX: HLO)'s Australian and New Zealand corporate and entertainment leg. It expects to recover fully in financial year 2024.
Of course, I have a good amount of due diligence to complete before I decide if these ASX 200 stocks make sense in my portfolio – just because a share appears cheap doesn't mean it's worth buying. As billionaire investor Warren Buffett says:
It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
But I think the trio all have the potential to record gains when the market takes off. Though, nothing in the investing world is guaranteed.
