The ASX share market has seen plenty of volatility and uncertainty following all of the interest rate rises as the Reserve Bank of Australia (RBA) tries to bring inflation in Australia under control.
As investors, we want to try to get the best price possible for our investment, but it's impossible to know what's going to happen next unless we have a working crystal ball. Mine isn't working at the moment.
One of Warren Buffett's most famous quotes is "be fearful when others are greedy and greedy when others are fearful."
But what about times like right now when the market seems to be neither overly greedy nor overly fearful?
Don't need to swing at every pitch with ASX shares
Warren Buffett once described (and is quoted by CNBC) why we don't need to go for every single investment opportunity, just the good ones. The baseball analogy comes from a book by a former star called Ted Williams – that book is called The Science of Hitting. It's about swinging at deliveries that are in your sweet spot.
If he waited for the pitch that was really in his sweet spot, he would bat .400. If he had to swing at something on the lower corner, he would probably bat .235.
The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot. And if people are yelling, 'Swing, you bum!,' ignore them.
We don't need to invest just because something is making headlines or has just announced something exciting.
More importantly, we need to ask does the share price of the ASX share make sense to invest in.
More opportunities will come along
The longer that we watch the stock market, the more experienced we become and can identify that investors do become frequently less pessimistic. Opportunities will come.
With the nature of different sectors, it's possible to find opportunities at different points in the cycle. For example, there could be a time when the domestic economy is looking weak, making it a good time to consider sold-off names like ASX retail shares.
At another point, there could be attractive prices for ASX mining shares, whether that's ASX lithium shares, ASX copper shares, ASX iron ore shares or something else. There could also be times when it seems like ASX tech shares are the best opportunity, such as at the end of 2022.
Warren Buffett usually just avoids trying to predict the macroeconomic – the wider economy – picture. If we can find wonderful companies at fair prices, then we should be able to do quite well with our portfolios.
