The ASX share market has seen plenty of declines in the last few weeks, and the global stock market is experiencing an even rougher time. The S&P 500 Index (SP: .INX) has fallen close to 20% since 19 February 2025.
Investors are responding to the news that the US has applied tariffs on almost all countries and virtually all of the products from those countries. Trump has decided to add additional tariffs on Chinese goods after China responded with additional tariffs to the initial US tariff announcement.
This has created uncertainty in investors' minds about what will happen and how things could play out next.
Plenty of investors have been pushing the sell button amid this bout of fear. Is this the time to be fearful or greedy with ASX shares?
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An uncertain future
I'm not going to try to predict what's going to happen next with any confidence.
There is a wide range of scenarios that could play out from here.
The US could make numerous tariff agreements in the next few days and weeks, reducing a lot of the uncertainty and risk.
It seems likely that inflation could increase in the US and perhaps internationally. If international goods go up in price in the US because of tariffs and price rises, then that's inflationary. We've already seen that from Ansell Ltd (ASX: ANN).
It's possible that hardly any countries will agree to tariffs, and these tariffs could stick around for the rest of Trump's term.
Is this the end of globalisation, as the UK Prime Minister recently said?
Even if the US is successful at bringing back some manufacturing, it could take a long time for plans to be drawn up and manufacturing plants to be built. Will US-made products cost more than Chinese-made ones? I'd guess so.
With all of that happening, it's understandable why some investors are selling and feeling fearful. It is possible that share prices could fall further from here.
Time to be greedy?
Without a crystal ball, it's hard to know how this will play out. Is your crystal ball working right now? I'd love to borrow it.
One of the most quoted pieces of advice, which is actually very simple, is from Warren Buffett when he said:
Be fearful when others are greedy and be greedy when others are fearful.
There certainly seems to be fear around right now in the ASX share market.
If I could choose when to invest, I'd choose when share prices are lower. Well, here they are. But share prices don't fall for no reason – something has to cause that fear.
It takes a certain type of bravery to invest during periods like this. Our instinct may be urging us to avoid risk.
But, if we look over the past twenty years, some of the best times to invest were during the GFC, the COVID-19 crash, and the high inflation fears of 2022. Hindsight makes it easy, of course. The ASX share market eventually recovered each time, even if it took a while.
I think we're living through another time when, if we're able, it's a good time to put money to work in cheaper stocks. We don't know what the worst point of the decline will be or how long share prices will stay depressed. But, in the long term (say five years), I think we'll look back at this sell-off as an opportunity to buy ASX shares at cheap prices.
This can be a time of being both fearful and greedy.
