I don’t think there is enough ASX share market volatility, which is why I want more of it.
When I say volatility, I mean more days and periods where the stock market falls. Perhaps quite a decent fall.
The ASX share market is meant to be riskier than other assets like cash, bonds and so on. I’m not saying that shares should fall by 10% at least once a month, but I think investors are missing out on better priced opportunities.
Volatility can be our friend
Investing in ASX shares comes down to two important factors in my opinion. Finding an investment that can grow and paying a price for it that seems reasonable.
It doesn’t matter whether that investment is an individual company like Washington H Soul Pattinson and Co Ltd (ASX: SOL), an exchange-traded fund (ETF) like Betashares Global Quality Leaders ETF (ASX: QLTY) or a listed investment company (LIC) like WCM Global Growth Ltd (ASX: WQG).
It’s just about finding ASX shares that make sense to invest in.
The stock market can provide investors with opportunities to be brave when others are fearful. But it’s harder to find opportunities when nearly everything keeps rising, and currently the only sizeable falls are where a business may be struggling, which could be like trying to catch a falling knife.
When will it return to the ASX share market?
It’s a good question, but it’s like asking when it’s going to rain next.
I’m sure there will be noticeable volatility but it could be tomorrow or weeks away.
The ASX share market doesn’t usually just drop for no reason. It takes something to cause it to drop. I don’t know what that will be or when it will happen.
The world is improving and getting closer to normal, mostly, when it comes to the COVID-19 pandemic. Borders are opening and most restrictions are lifting.
Rising interest rates could cause some volatility. Maybe there will be a geopolitical event that makes investors nervous. Perhaps the difficulty of beating HY21 results last year will make some ASX shares fall after February 2022.
Whatever it is, I hope a bit more volatility returns so that investors like you and me have more of an opportunity to buy ASX shares at a cheaper price.
