The ASX share market has seen plenty of volatility over the past year. But, for investors waiting for another low, it might be time to start investing.
There isn't a bell that rings that tell us when the bear market low has been reached. There were two moments of lows for the S&P/ASX 200 Index (ASX: XJO) in 2022 – in June and the end of September/start of October. Volatility is likely to continue but we may have already seen the bottom.
I think the market tends to hit its lowest when things are looking the most unknown. When it seems uncertain how things are going to go, I believe that's when share prices decline the most. However, when the bad factors are known and predicted, that seems to be when investors are more comfortable with the situation and share prices start rising.
For example, interest rates are even higher in the US and Australia than a few months ago. That's meant to put even more pressure on valuations, in theory. Yet, the ASX 200 is up by around 14% since 20 June 2022.
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Why I think it's time to invest in ASX shares
I want to buy ASX shares as cheaply as possible. But, history tells me the low prices, as we've seen over the past several months, are likely to stick around only for so long. The share market and earnings have risen over time and I think that can continue in the coming years.
If we can buy investments at a cheaper price then it will help long-term returns, including a better dividend yield. As well, US inflation may be starting to come down.
We don't know what share prices are going to do in the future, but I can see a wide range of opportunities on the ASX today.
By the time economic conditions start improving, the share market could already have gone through a recovery. We'll just have to see how large the recovery is, considering interest rates are likely to stay higher than they have been over the last few years.
We've already seen a number of ASX shares rebound to get close to 52-week highs such as Webjet Limited (ASX: WEB), Lovisa Holdings Ltd (ASX: LOV), and TechnologyOne Ltd (ASX: TNE).
Which ideas could still be good value?
I regularly write articles about ASX shares that could make good investments. The Motley Fool website is a great place to find ideas.
In my opinion, heavily-hit names like Xero Limited (ASX: XRO), Pinnacle Investment Management Group Ltd (ASX: PNI), and Temple & Webster Group Ltd (ASX: TPW) are still long-term opportunities.
I also like the long-term tailwinds for companies such as Adore Beauty Group Ltd (ASX: ABY) and Estia Health Ltd (ASX: EHE).
This could also be a great time to consider an investment like a leading exchange-traded fund (ETF) such as Betashares Nasdaq 100 ETF (ASX: NDQ) that has fallen heavily.
