I'm buying these quality ASX shares to capitalise on the decline

These are the shares I'd buy if the markets get any worse.

Woman looking at a phone with stock market bars in the background.

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

As most ASX investors would be painfully aware, the Australian share market, and most ASX shares, have had a pretty rough week or two. Since last Wednesday, the S&P/ASX 200 Index (ASX: XJO) has dropped by a nasty 4%. That's including today's horrid drop of 1.38% so far.

None of us really enjoy seeing our ASX share portfolios take a hit during a tough time like what we are currently seeing. Losing money is never fun, particularly when it's out of our control.

However, these share market swings and roundabouts are an inescapable part of investing. As such, there are three paths forward we can choose to go down.

The first is selling shares out of fear that you will lose even more money. Whilst understandably appealing, this path is almost always a mistake, and will eventually lead to financial ruin.

The second is to do nothing. If you're too nervous about the current market situation to muster up the courage to buy more shares, there's nothing wrong with sitting on your hands. It's a lot better than selling out, that's for sure.

But I'm going to be taking a third path if the markets keep on dropping – buying up even more of my favourite ASX shares.

The legendary investor Warren Buffett once said this:

Widespread fear is your friend as an investor because it serves up bargain purchases.

This has been proved time and time again to be true. The stock market may be a volatile place. But it tends to go up far more often than it goes down. Remember, it was only a few weeks ago that the ASX 200 was cracking fresh new all-time highs.

So I'm taking this chance, when there's clearly a bit of fear in the markets, to take a look at buying some more of my favourite ASX shares.

Which ASX shares am I looking to buy in this market dip?

Which shares, you may ask? Well, I've already talked a bit about Telstra Group Ltd (ASX: TLS) this month. I continue to view Telstra as undervalued and a bargain at its current share price.

But I'd also consider three or four more of my favourite investments.

One is the VanEck Morningstar Wide Moat ETF (ASX: MOAT). This actively managed exchange-traded fund (ETF) has a long history of delivering market-beating returns.

But this ETF has retreated by around 5% since the start of April. It's starting to look mightily attractive from my viewpoint.

Ditto with Washington H. Soul Pattinson and Co Ltd (ASX: SOL). Soul Patts shares have also been a huge winner for me over many years. Since last Wednesday, this company has given up more than 6% of its value. It still isn't in 'screaming bargain' territory for me. But it's looking a whole lot finer than it was at the start of last week.

Finally, I'm a big fan of index investing. Index funds are a great investment to employ a dollar-cost averaging strategy.

So if the markets continue to drop next week, I'll be seriously considering adding to the likes of the BetaShares Nasdaq 100 Currency Hedged ETF (ASX: HNDQ) and the Vanguard Australian Shares Index ETF (ASX: VAS) positions in my portfolio.

Share market dips are scary. But they don't happen too often, and, as such, I'm looking to grab this current one's buying opportunities with both hands.

Motley Fool contributor Sebastian Bowen has positions in Betashares Nasdaq 100 ETF - Currency Hedged, Telstra Group, VanEck Morningstar Wide Moat ETF, Vanguard Australian Shares Index ETF, 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 Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Telstra Group and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Betashares Nasdaq 100 ETF - Currency Hedged and VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Opinions

Two excited woman pointing out a bargain opportunity on a laptop.
Opinions

2 great value ASX shares I want to buy

These stocks are high on my watchlist.

Read more »

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop
Opinions

1 ASX 200 dividend stock down 20% to buy right now

This beaten-up ASX share could be a top pick for dividends and stability.

Read more »

Man sitting in a plane looking through a window and working on a laptop.
Opinions

2 cheap ASX 200 shares I'd buy in May

I think these stocks are too cheap to ignore.

Read more »

Invest written on a notepad with Australian dollar notes and piggybank.
Opinions

I'd invest $10,000 into these excellent ASX shares for the long term

I’m bullish about these top stocks.

Read more »

Young woman using computer laptop with hand on chin thinking about question, pensive expression.
Opinions

Should you buy Telstra stock on a pullback?

Is this telco a buy for value hunters?

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Opinions

1 overlooked ASX growth stock I'm chasing for multibagger potential

I believe this stock can create strong returns in the years ahead.

Read more »

a man sits back from his laptop computer with both hands behind his head feeling happy to see the Brambles share price moving significantly higher today
Opinions

How I plan to invest my tax cuts

I have big plans for my tax cut cash this year.

Read more »

a man's hand places a white egg into a basket of similar white eggs.
Opinions

With its 8% yield, I think this undervalued ASX 200 stock is an opportunity not to miss

The value and passive income of this stock looks very eggciting to me.

Read more »