The S&P/ASX 200 Index (ASX: XJO) and ASX 200 shares have spent this Tuesday going from bad to worse so far. Yesterday, the ASX 200 opened the trading week on a negative note, slipping by 0.2%. But today thus far, ASX investors have stepped down on the selling pedal.
At the time of writing, the ASX 200 has tanked by a horrid 1.38%, dragging the index to below 7,000 points at 6,936.3 points at present. This is the first time in six months that the ASX 200 has fallen below 7,000 points. Yep, you'd have to go back to late March to find the last time the ASX 200 was at these kinds of levels.
It also means the index has tanked by more than 7% since it climbed over 7,400 points in early August. See that yourself below:
It's not hard to see why investors are getting nervous. There hasn't been a lot of good economic news of late. Oil prices have been surging, adding to inflation. That is prompting predictions that interest rates might have to keep on rising, which will continue to weigh on economic growth.
We can tell that investors are getting nervous because at the same time markets are falling, global bond yields are rising sharply.
Indeed, we'll see how our own Reserve Bank of Australia (RBA) reacts to these economic pressures this afternoon with its October interest rates decision.
So with the ASX and ASX 200 shares at this six-month low, many investors might be wondering whether it's time to start buying. After all, the legendary Warren Buffett famously once said, "Be greedy when others are fearful." And it's pretty clear that there's a lot of fear going around right now.
Is it time to buy ASX 200 shares yet?
I think investors should heed Buffett's advice and indeed start buying shares if they are able. ASX 200 shares, as a whole, are now 7% cheaper than what they were only back in July.
That's not to say they can't fall even further. For all I (or anyone else knows), we could see another 7% drop over the coming two months. But I'll be buying ASX shares then, and now, if I could.
The fact is there is always something to worry about on the stock market. So when investors take these worries to heart, it's often a great time to buy our favourite shares at a discounted price.
But don't take it from me; take it from our chief investment officer Scott Phillips. Here's some of what Scott told investors late last month:
If you could be a student of history for just a little while. If you could chart the steady, upward, and (stonkingly incredible) compound returns of the stock market over the last century- and-a-quarter.
No, not every day. Or week. Or month. Or year.
But over the long term.
We haven't passed capitalism's peak, I suggested, and so it was reasonable to expect better returns in future.
There were no shortage of times in the past when people wondered if it was all over. World Wars. Oil Shocks. Countless recessions. Market crashes. Terrorism. And the ceaseless, breathless, negative headlines, perhaps bettered only by the ceaseless, baseless, predictions of market doom.
Instead, markets have continued to flourish, over the long term, despite all of those things.
And you think that the music will finally, somehow, stop… this time?
I don't. And I don't think you should either.
