The market has been incredibly volatile this year, with many shares making heavy declines.
This can scare many investors off. But there are signs that now could actually be the best time to buy ASX shares.
Optimism crept back into the market this week, with the S&P/ASX 200 Index rising 2.2% on Wednesday amid hopes that the war in the Middle East could soon come to an end.
While one strong session does not confirm a trend, it can signal a change in tone.
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ASX share valuations still look compelling
What makes the current setup particularly interesting is that many high-quality ASX 200 shares are still trading well below their previous highs.
This includes names like CSL Ltd (ASX: CSL), ResMed Inc. (ASX: RMD), Cochlear Ltd (ASX: COH), Pro Medicus Ltd (ASX: PME), Xero Ltd (ASX: XRO), and WiseTech Global Ltd (ASX: WTC).
These are not speculative businesses. They are established companies with strong competitive positions, global exposure, and long-term growth drivers. Yet despite this, their share prices have pulled back materially in recent periods.
That disconnect between business quality and share price performance is often where opportunity begins to emerge.
Markets move before confidence returns
One of the challenges with investing is that markets are forward-looking.
By the time the outlook feels clear and positive, share prices have usually already moved higher. In contrast, when uncertainty is still present but conditions are beginning to stabilise, valuations can remain relatively attractive.
This creates a window where the risk-reward balance for ASX shares may be more favourable.
It is not about picking the exact bottom. That is almost impossible to do consistently. Instead, it is about recognising when sentiment is shifting while prices still reflect a degree of caution.
Why long-term investors pay attention to these moments
For long-term investors, these periods can be particularly important.
Buying high-quality ASX shares when they are out of favour but still executing well has historically been one of the more reliable ways to build wealth over time.
Of course, risks remain. Economic conditions are still mixed and geopolitical uncertainty has not disappeared. But markets do not wait for perfect clarity before moving. They tend to turn when expectations are low and begin to improve.
That is why now could be the time to consider buying ASX shares. Sentiment may be shifting, but many opportunities are still on the table.
