I firmly believe some of the best long-term buying opportunities can appear when investors are still feeling unsure.
But I am not looking for perfect conditions. I am looking for strong businesses where the market's confidence has weakened, but the long-term opportunity still looks attractive.
Three ASX shares I think fit that idea are named in this article.
Image source: Getty Images
CSL Ltd (ASX: CSL)
CSL has been a difficult share to own in recent years and is down 60% over the past 12 months.
For a long time, it was treated as one of the ASX's simplest long-term compounders. The business had a strong record, global scale, and exposure to healthcare markets that could grow over time.
That story has become more complicated. The market has lost confidence, the outlook has been challenged, and investors are no longer willing to give CSL the same benefit of the doubt.
I think that is why the stock is worth watching. CSL is still a global healthcare business with leading positions across plasma therapies, vaccines, and specialist medicines. Its problems do not look like the end of the company's competitive position to me. They look more like a difficult period where margins, growth expectations, and investor trust all need to be rebuilt.
That rebuild may take years, so I do not think investors should expect a quick turnaround.
But I like the risk/reward more now than I did when expectations were much higher. The dividend yield has also become more appealing, which can help patient investors wait while management works through the next stage of the business.
REA Group Ltd (ASX: REA)
REA Group is another ASX share I would be happy to buy during a period of weaker sentiment. Its shares are down over 40% from their high.
The company owns Australia's dominant digital property platform, realestate.com.au. That is a very valuable position.
Property buyers want to go where the listings are. Agents want to advertise where the buyers are. Sellers want their homes seen by the largest possible audience. That creates a powerful network effect.
I think REA has several ways to keep growing over time. Premium listings can become more valuable, agents can use more data and digital tools, and consumers can be served across more parts of the property journey.
The business can also benefit from artificial intelligence over time. Better search, more useful property insights, improved valuation tools, and smarter agent products could all make the platform more valuable.
Netwealth Group Ltd (ASX: NWL)
Down over 40% from its high, Netwealth is one of my preferred wealth platform shares.
The business benefits from a long-term change in financial advice. Advisers need better technology, more efficient administration, managed accounts, portfolio reporting, and tools that help them serve clients at scale.
Netwealth has built a strong reputation with advisers, and that can be hard to replicate.
What I like most is the scalability of the model. Once funds are on the platform, additional growth can support margins over time, provided the business continues to invest wisely and maintains service quality.
Competition is the risk. Hub24 Ltd (ASX: HUB), large institutions, and other platforms are all fighting for adviser flows. Valuation can also be demanding when the market is excited about platform growth.
But I think Netwealth remains a high-quality business in a sector with strong long-term tailwinds.
Foolish Takeaway
Market caution can be frustrating, but it can also be useful.
It gives investors time to look beyond the next result and ask a better question: Which businesses could still be stronger in five or 10 years?
I do not think any of these ASX shares will be smooth performers. But I like buying quality when the market is still debating the outlook. That is often where patient investors can find their edge.
