There could be a lot more uncertainty ahead with rising interest rates and plenty of valuations higher than a few months ago. March could be a smart time to invest in quality ASX shares.
It is difficult to say whether there is going to be another market dip or not. But, share prices don’t seem as attractive as they were during 2022.
In this situation, I think it makes sense to look at investments that might be able to keep performing even if there is another drop or an economic downturn. I like these two options.
Wesfarmers Ltd (ASX: WES)
Wesfarmers may be best known for two of its biggest businesses – Bunnings and Kmart – but it runs plenty of other businesses like Priceline, Officeworks, Target, and various industrial, energy, fertiliser and chemical businesses.
Inflation and higher interest rates do make things trickier for the Australian economy. However, arguably, names like Bunnings and Kmart are well-suited to offer shoppers the best value. So, Wesfarmers may do relatively well compared to its retail competitors.
I appreciate the ASX share’s moves into health and lithium because it could enable the business to diversify and grow its profit sources. WesCEF is already doing a stellar job.
Plus, I like the dividend income that the company sends to shareholders every year.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
This exchange-traded fund (ETF) may sound like a strange one, but I think it’s got a great investment strategy. It only invests in businesses that have strong competitive advantages which could endure for many years to come.
Then, businesses are only invested in for the portfolio they they’re trading at a good price compared to how much analysts actually think those shares are worth.
It ends up meaning that, in my opinion, the portfolio is full of high-quality names at good prices.
The future may be uncertain, but I don’t think the ASX 200 will outperform this ETF over the next three to five years.
