After a market selloff, many investors feel uneasy about diving back in.
But history has shown that periods of market weakness often present some of the best buying opportunities. Rather than fearing the red, smart investors see it as a chance to pick up quality ASX shares at discounted prices.
Here are five reasons why now could be the time to invest—and three ASX shares that analysts rate as buys after the recent market pullback.
Reason 1: Markets recover over time
While selloffs can be painful in the short term, markets tend to bounce back. Historically, the ASX has recovered from every correction and bear market, rewarding patient investors who stayed the course. Buying during a downturn means locking in lower prices before the inevitable rebound.
Reason 2: High-quality companies don't stay cheap for long
Market downturns often hit all stocks, regardless of quality. But strong businesses with durable competitive advantages tend to regain lost ground and keep growing. Picking up high-quality ASX shares when they are down can lead to outsized long-term gains.
Reason 3: Earnings power remains intact
A falling share price doesn't always mean a company's fundamentals have deteriorated. Often, external factors like interest rates, macroeconomic uncertainty, or short-term sentiment drive the market lower. For companies with strong earnings growth and resilient business models, these temporary setbacks can be buying opportunities.
Reason 4: Dividend yields become more attractive
When share prices drop, dividend yields go up. Investors who buy income-generating stocks during a selloff can lock in higher yields and enjoy a growing stream of passive income as dividends increase over time.
Reason 5: The power of compounding
Long-term investors know all too well that the key to wealth creation is time in the market, not timing the market. Buying shares after a selloff gives investors a head start, allowing compounding to work its magic over the years.
Now, let's look at three ASX shares that could be worth buying while they're trading at discounted levels.
ResMed Inc. (ASX: RMD)
The first ASX share that could be a buy is sleep disorder treatment leader ResMed. Its shares have been dragged lower despite the company's long-term outlook remaining very strong. Demand for sleep apnoea treatment is growing, as is awareness of the condition, and ResMed's dominance in the CPAP device market is unlikely to be disrupted anytime soon.
Goldman Sachs has a conviction buy rating and $49.00 price target on its shares.
WiseTech Global Ltd (ASX: WTC)
WiseTech is a global leader in logistics software, helping freight companies streamline operations through its flagship CargoWise platform. It is another ASX share to have been dragged notably lower this year. This has been driven by a combination of market weakness and concerns over the behaviour of its founder.
Goldman Sachs also sees this as a buying opportunity. It thinks the high-quality tech stock is a buy with a $128.00 price target.
Endeavour Group Ltd (ASX: EDV)
Finally, if you're after a more defensive play, then Endeavour Group could be worth a look. The company owns Australia's largest network of liquor stores (including Dan Murphy's and BWS) and a portfolio of pubs and hotels. Alcohol sales tend to be resilient even in tough economic conditions, making Endeavour a solid defensive ASX share.
Morgan Stanley is bullish on Endeavour. Earlier this month, it put an overweight rating and $5.30 price target on its shares. It also expects a 4.7% dividend yield in FY 2025.
