I'm buying cheap ASX shares to build my wealth in 2024 and beyond

Finding cheap shares can be difficult, but here's how I do it.

A woman peers through a bunch of recycled clothes on hangers and looks amazed.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Knowing when, and how much, to invest in ASX shares can be a tricky process. On one hand, we're told to invest in cheap ASX shares by 'buying low' and 'selling high'. But on the other, we're told not to 'time the markets' and that 'time in the market beats timing the market'.

So how does one reconcile these two seemingly opposed pieces of advice?

Well, to hopefully shed some light on this question, let's discuss how I'm planning on investing in 2024.

I'm an investor who loves getting quality ASX shares for cheap, bargain basement prices. It was Warren Buffett who told us that price and value aren't the same thing on the stock market. His exact quote was "price is what you pay, value is what you get". So if you do manage to snag a cheap ASX share below what it's actually worth, you're doing something right.

His late, great business partner, Charlie Munger, expanded on this by stating that, "No matter how wonderful a business is, it's not worth an infinite price". So these two great men are clearly telling us that successful investing involves looking out for quality businesses that are also cheap shares.

However, there are periods when the market is booming and cheap ASX shares become harder and harder to find. Investors like Buffett typically stop buying shares altogether during these periods.

How to build wealth by buying cheap ASX shares

Saying that, I think that most of us mere mortals shouldn't do this because it is a form of market timing. Buffett is an investing master, so he can afford to do as he sees fit. But market timing doesn't work well for the vast majority of other investors.

So here's what I do. I have a list of quality ASX shares that I'd be happy to load up on at the right price. Often, at least one of these ASX shares is cheap, or at least going for a reasonable value, at any given moment. So if I have funds to spare for my investing portfolio, that's where I'll put them.

Some of my favourite names include Washington H. Soul Pattinson and Co Ltd (ASX: SOL), National Australia Bank Ltd (ASX: NAB), Wesfarmers Ltd (ASX: WES) and CSL Limited (ASX: CSL). I might also consider some US shares too, such as Apple Inc (NASDAQ: AAPL), Adobe Inc (NASDAQ: ADBE) or Airbnb Inc (NASDAQ: ABNB). Perhaps even Buffett's own Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B)

However, if there are no cheap ASX shares that take my fancy, I invest the money in index funds instead. I think putting extra cash in an index fund like the Vanguard Australian Shares Index ETF (ASX: VAS) or the Vanguard MSCI Australian Small Companies ETF (ASX: VSO) is a better long-term bet than leaving it in the bank.

This is how I'll continue to invest in 2024. I'll look for cheap ASX shares, and if that fails, I'll turn to some trusty index funds. In my view, this investing strategy is a good bet for building long-term wealth.

Motley Fool contributor Sebastian Bowen has positions in Adobe, Airbnb, Apple, Berkshire Hathaway, CSL, National Australia Bank, Vanguard Australian Shares Index ETF, Vanguard Msci Australian Small Companies Index ETF, Wesfarmers, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Adobe, Airbnb, Apple, Berkshire Hathaway, CSL, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers. The Motley Fool Australia has recommended Adobe, Airbnb, Apple, Berkshire Hathaway, and CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Opinions

Shocked office worker staring at computer screen with colleagues working in the background.
Opinions

2 ASX shares with earnings results that shocked me this week

These two results really surprised me.

Read more »

Emotional euphoric young woman giving high five to male partner, celebrating family achievement, getting bank loan approval, or financial or investing success.
Opinions

1 ASX dividend stock up 40% in 12 months that I'd buy

I’m backing this company to deliver pleasing dividends.

Read more »

A smiling man take a big bite out of a burrito
Opinions

Is it worth me buying Guzman Y Gomez shares for $40 after a 33% rise?

Is the valuation too spicy or is this a good time to invest?

Read more »

Businessman smiles with arms outstretched after receiving good news.
Best Shares

Here are 3 of my most profitable investments in ASX shares ever (and which one I'd buy more of right now)

I reckon only one of these shares is worthy of a buy today.

Read more »

An ASX investor relaxes on her couch as the Harvey Norman share price drops due to the shares trading ex-dividend from today.
Opinions

This ASX 300 stock soared 15% after reporting. Time to buy?

This business is a great operator. Is it time to buy?

Read more »

Boys making faces and flexing.
Opinions

3 ASX shares for Australian investors worried about Trump tariffs

These stocks could offer defensive characteristics.

Read more »

A man leans forward over his phone in his hands with a satisfied smirk on his face although he has just learned something pleasing or received some satisfying news.
Technology Shares

Life360 shares: A generational opportunity to get rich?

I think the Life360 share price could more than double again in the year ahead.

Read more »

A woman makes the task of vacuuming fun, leaping while she pretends it is an air guitar.
Opinions

Opinion: This is one of the best ASX growth shares to own for the next 5 years

This stock is rapidly growing, and I’m excited about it.

Read more »