The best time to buy shares? It might be right now

The market has been incredibly volatile this year, with many shares making heavy declines.

This can scare many investors off. But there are signs that now could actually be the best time to buy ASX shares.

Optimism crept back into the market this week, with the S&P/ASX 200 Index rising 2.2% on Wednesday amid hopes that the war in the Middle East could soon come to an end.

While one strong session does not confirm a trend, it can signal a change in tone.

ASX share valuations still look compelling

What makes the current setup particularly interesting is that many high-quality ASX 200 shares are still trading well below their previous highs.

This includes names like CSL Ltd (ASX: CSL), ResMed Inc. (ASX: RMD), Cochlear Ltd (ASX: COH), Pro Medicus Ltd (ASX: PME), Xero Ltd (ASX: XRO), and WiseTech Global Ltd (ASX: WTC).

These are not speculative businesses. They are established companies with strong competitive positions, global exposure, and long-term growth drivers. Yet despite this, their share prices have pulled back materially in recent periods.

That disconnect between business quality and share price performance is often where opportunity begins to emerge.

Markets move before confidence returns

One of the challenges with investing is that markets are forward-looking.

By the time the outlook feels clear and positive, share prices have usually already moved higher. In contrast, when uncertainty is still present but conditions are beginning to stabilise, valuations can remain relatively attractive.

This creates a window where the risk-reward balance for ASX shares may be more favourable.

It is not about picking the exact bottom. That is almost impossible to do consistently. Instead, it is about recognising when sentiment is shifting while prices still reflect a degree of caution.

Why long-term investors pay attention to these moments

For long-term investors, these periods can be particularly important.

Buying high-quality ASX shares when they are out of favour but still executing well has historically been one of the more reliable ways to build wealth over time.

Of course, risks remain. Economic conditions are still mixed and geopolitical uncertainty has not disappeared. But markets do not wait for perfect clarity before moving. They tend to turn when expectations are low and begin to improve.

That is why now could be the time to consider buying ASX shares. Sentiment may be shifting, but many opportunities are still on the table.

The post The best time to buy shares? It might be right now appeared first on The Motley Fool Australia.

More reading

• Are investors running scared of WiseTech shares?
• 2 ASX stocks that could help turn $10,000 into $1 million
• Why Arafura Rare Earths, Eagers Automotive, Life360, and Pro Medicus shares are racing higher today
• Why are ASX 200 tech stocks like WiseTech and Life360 going gangbusters on Wednesday?
• How to invest during an ASX share bear market when you’re worried about prices falling more

Motley Fool contributor James Mickleboro has positions in CSL, Cochlear, Pro Medicus, ResMed, WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Cochlear, ResMed, WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended ResMed, WiseTech Global, and Xero. The Motley Fool Australia has recommended CSL, Cochlear, and Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.