There's always a tradeoff when we invest in ASX shares. If you invest in the ASX 200 shares on your watchlist today, a time when the market is still fairly close to all-time highs, you won't have as much cash around if the market crashes next week.
On the other hand, if you start hoarding cash in anticipation of that inevitable market crash, you might miss out on even more all-time highs, not to mention those handy dividend payments.
This problem has been vexing investors for as long as there's been a stock market.
I personally believe that the best course of action for most people is to invest as much as we can into ASX shares as soon as we can. After all, the market goes up far more often than it goes down. By that logic, it makes sense not to wait for those rare share market crashes, even if they do offer up the chance to buy some of the shares on our ASX 200 watchlists for a bargain.
But I can't help myself. The thrill of buying my favourite stocks in a market downturn is too great for me to invest all of my available cash into the markets at any one time. As such, I tend to keep a small portion of my portfolio in cash for that rainy day when the markets do crash. At least we get more bang for our bucks staying in cash these days, thanks to high interest rates.
So today, let's go through a couple of the shares on my ASX 200 watchlist that I can't wait to buy more of if and when the market goes through its next downturn.
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My current ASX 200 share watchlist
First up is a company that I've written about extensively here at the Fool, Washington H. Soul Pattinson and Co Ltd (ASX: SOL). This diversified investment house has several notable achievements that would make it the number one stock on my ASX shopping list in the event of a market crash.
The company's stellar long-term returns, for one, are impressive. Soul Patts shares have beaten the market for decades, returning an average of 12% per annum over the 20 years to 30 June 2024. That includes share price growth and dividends. Speaking of dividends, Soul Patts also has the longest streak of raising its annual dividend on the ASX 200, delivering a shareholder pay rise every single year since 2000.
Perhaps reflecting this quality, Soul Patts shares have gained a hefty 75% or so over the past five years alone. So if there were a stock market crash, I would load the boat with this one.
Next up on my ASX 200 share watchlist is Wesfarmers Ltd (ASX: WES). Wesfarmers is the massive conglomerate behind brands like Kmart, OfficeWorks, Target and its crown jewel, Bunnings. But this sprawling business also has interests in industries ranging from lithium and gas to clothing and chemical manufacturing.
I would love to own more Wesfarmers shares, thanks to this diverse range of high-performing businesses. However, this company has exploded in value recently, rising by almost 47% over the past 12 months. As such, the Wesfarmers share price is looking a little too expensive for my taste right now. But if it fell in a market crash, I would be racing to add to my rather inadequate current position.
