I don't do 'timing the market'. I believe that since none of us can predict the future, it makes sense to be fully invested in ASX shares whenever you can, because leaving money out of the market has an opportunity cost. Especially when you consider that the markets go up more often than they go down.
But I have a confession. I do keep some cash around (to be clear a small percentage of my overall portfolio) in case there is a stock market crash.
I simply love buying ASX shares at firesale prices too much to forsake these opportunities. And when fear dominates the investing landscape, as it tends to do during a crash, fear-induced irrational selling can serve up some mighty-fine opportunities.
So today, let's talk about five ASX shares that would be at the top of my buy list if the market crashed tomorrow and offered up a firesale on ASX shares.
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5 ASX shares I would buy if there is a stock market firesale
MFF Capital Investments Ltd (ASX: MFF)
MFF Capital is a listed investment company (LIC) that I already own in my portfolio. It is run by veteran investor Chris Mackay and invests in a portfolio of quality US shares. These include names like American Express, Visa and Alphabet.
MFF already trades at a discount to its net tangible assets today, so if there was a stock market crash or share firesale, this discount would probably turn into a 'buying dollars for 50 cents' scenario.
Lottery Corporation Ltd (ASX: TLC)
Lottery Corp is a newcomer to the ASX. But it is, in my view, one of the stock market's strongest companies. It has exclusive licenses to sell lottery and Keno services in almost all states and territories in the country.
That makes Lottery Corp a rare monopolistic business, which is great news for shareholders. However, to compensate for this strength, Lottery Corp shares trade at a fairly expensive level today, with a price-to-earnings (P/E) ratio above 30.
If investors ever decided to throw this company out with the bathwater in a crash and beat down its share price meaningfully, I would happily be on the other side of that trade.
Washington H. Soul Pattinson and Co Ltd (ASX: SOL)
Soul Patts is another ASX share that I already own. However, I'd like to own far more shares. But the company has gained a whopping 25% or so over the past year, so I haven't been able to pick up more at a compelling price.
There's nothing about Soul Patts that isn't to like. This is an investing house that owns a diversified portfolio of other ASX shares and assets. It has delivered massive, market-beating returns to its shareholders for decades. And, best of all, Soul Patts currently has the best dividend increase streak on the share market, with 22 years and counting of annual dividend increases.
So if Soul Patts got back to around $25, I would be loading up the truck.
Woolworths Group Ltd (ASX: WOW)
Woolworths is a company that needs little introduction, being the most dominant supermarket operator in the country. However, despite having a superior business to that of its arch-rival Coles Group Ltd (ASX: COL), I would choose Coles at today's prices. That's because Woolworths shares trade at a rather large premium to Coles shares at a P/E ratio of almost 30, which also pulls its dividend yield down.
But if the markets have a firesale, and Woolworth gets down to Coles' level with a P/E of around 21 or 22. I would happily add Woolies to my portfolio.
Vanguard Australian Shares Index ETF (ASX: VAS)
To finish up, this exchange-traded fund (ETF) is a final buy for me if the stock market gives us a firesale. When the market goes through a crash, there is a lot of noise out there, and a lot of panic. As such, it can be hard to stay focused on which companies to focus on.
Buying this ETF would remove that barrier, as it represents an investment in 300 of the largest ASX shares on the stock market. That's everything from Commonweath Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP) to JB Hi-Fi Ltd (ASX: JBH) and Telstra Group Ltd (ASX: TLS).
This ETF represents an investment in every major company in Australia. As such, it's a no-brainer to buy it at the cheapest price we can.
