It’s hard to know whether to buy or sell ASX 200 shares right now. The S&P/ASX 200 Index (ASX: XJO) has been volatile in recent days as investors worry about the recent bull run.
But despite the share market heating up, now is not the time to panic.
Here are a few things that I think are worth considering if you’re nervous about buying right now.
3 reasons to buy ASX 200 shares right now
The first thing to remember is why you’re investing in the first place. While it could be to make a quick buck, it’s most likely to build long-term wealth and enjoy a nice retirement.
That means that stepping out of the market while ASX 200 shares are volatile may not be the best strategy.
For instance, many investors missed out on huge winners like Afterpay Ltd (ASX: APT) because they cashed out of the market.
There are many Aussie companies that have shed billions in value this year. That could present some great buying opportunities right now.
The coronavirus pandemic hit global markets hard and ASX 200 shares like Woodside Petroleum Limited (ASX: WPL) have crashed lower in 2020.
That leads me to my second point: market timing.
In the long-run, it’s just not possible to time the market correctly. It’s easy to say that but not follow through, especially in a bear market. However, if you’re investing for the long-term, you should drown out the noise.
Consistently investing in ASX 200 shares is the best way to achieve long-term returns. That means you can invest for your time horizon in the decades ahead and not worry about current movements.
Transaction costs and taxes are two factors that can deplete your after-tax returns which investors often forget.
A final reason to invest in ASX 200 shares right now is that there aren’t many other good options available.
Interest rates are at record lows which means savings accounts and bonds don’t offer much yield.
Aussie property tends to be very expensive which means shares are really one of the few high-yield options available right now.
Foolish takeaway
These are just a few reasons to buy ASX 200 shares in the current market rather than not investing at all and holding cash.
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More reading
- Is $1,000 invested in AGL Energy shares a smart investment?
- Will the Afterpay share price hit $100 in 2020?
- Why Afterpay and these ASX shares just stormed to new highs
- 5 things to watch on the ASX 200 on Wednesday
- ASX 200 jumps almost 4%, Webjet share price soars
Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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