Chances are you've come to the Motley Fool (excellent choice, by the way) because you either already own ASX shares, or you're thinking about owning shares. Whenever you've bought shares, if indeed you have, I'd be willing to bet that you've asked yourself whether making that decision on that day was the best choice.
This is totally understandable, and part of human nature. Entrusting your hard-earned cash to the whims of the markets is no easy undertaking. There's always going to be a voice in the back of your mind telling you that if you buy ASX shares today, they are just going to fall tomorrow.
So it's clear that, while normal, asking ourselves this question has no benefit. None of us know what the markets are going to do tomorrow, next week, or next month.
Thus, if you find yourself holding back from buying your next share due to fears over what the markets might do next, do yourself a favour and ask some better questions.
Am I trying to time the markets?
Chances are that we've all made a timing-the-mark mistake before. When I started on my investing journey, I would always try to wait for an ASX share to dip back towards its most recent 52-week low before making a buy. Whilst this worked a few times, most of the time it didn't.
If a company is of a high calibre, it is usually growing its revenues, earnings, and dividends over time. Thus, over time, it becomes less and less likely that said company's shares will fall in value because investors are willing to pay more for a company that is growing.
I've learnt to not look at a company's past share price performances now, and instead assess what kind of price a company is trading at today, and whether that is an accurate reflection of what I think those shares are truly worth.
We don't want to overpay when buying an ASX share, of course. But we also don't want to wait forever for the perfect buying price. As they say, time in the market beats timing the market.
Am I buying the right ASX shares?
As we established above, it's normal to have some doubts about what price you are paying for your shares. But if you are asking yourself whether it's safe to buy a share, you might want to ask, 'Am I buying the right company?' instead.
When it comes to my portfolio, I'm not too fussy anymore about what price I pay for new shares of my favourite ASX companies. Sure, I'm careful not to overpay for them. But I believe that if you are invested in a top-quality company, the share price will look after itself over time.
Whenever I buy a new ASX share, I always ask myself this question, 'Is this company going to be bigger and more profitable in ten years than it is today?' If you're not sure, then no wonder you're wondering if the shares are safe to buy today. But if you are sure that this is going to be the case, then chances are you'll feel better about picking up those shares.